<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: September 26, 1997
(Date of earliest event reported)
Morgan Stanley Capital I Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-26667 13-3291626
- -------------------------------------------------------------------------------
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation
1585 Broadway, New York, N.Y. 10036
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 296-7000
<PAGE>
ITEM 5. OTHER EVENTS.
Attached as exhibits to this Current Report are (i) the
consent of Cushman & Wakefield, Inc. ("Cushman & Wakefield") furnished to the
Registrant by Cushman & Wakefield in respect of the Registrant's proposed
offering of Commercial Mortgage Pass-Through Certificates, Series
1997-XL-1 (the "Certificates"); (ii) the consent of Hospitality
Valuation Services International ("Hospitality Valuation") furnished to the
Registrant by Hospitality Valuation in respect of the Registrant's proposed
offering of the Certificates; (iii) the consent of O. Marshall Dodds Company,
Inc. ("Marshall Dodds") furnished to the Registrant by Marshall Dodds in
respect of the Registrant's proposed offering of the Certificates; (iv) the
consent of Regional Appraisal Associates ("Regional") furnished to the
Registrant by Regional in respect of the Registrant's proposed offering of the
Certificates; (v) the consent of Landauer Associates, Inc. ("Landauer")
furnished to the Registrant by Landauer in respect of the Registrant's
proposed offering of the Certificates; (vi) the consent of CB Commercial Real
Estate Group, Inc., ("CB") furnished to the Registrant by CB in respect of the
Registrant's proposed offering of the Certificates; and (vii) certain property
appraisals (the "Property Appraisals") furnished to the Registrant by Cushman
& Wakefield, Hospitality Valuation, Marshall Dodds, Regional, Landauer, and CB
(the "Appraisers") in respect of the Registrant's proposed offering of the
Certificates.
The Certificates will be offered pursuant to a Prospectus
and related Prospectus Supplement (together, the "Prospectus"), which will be
filed with the Commission pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Act"). The offer and sale contemplated by the
Prospectus of the Certificates will be registered pursuant to the Act under
the Registrant's Registration Statement on Form S-3 (No. 333-26667) (the
"Registration Statement"). The Registrant hereby incorporates the Appraisers
Consent and the Property Appraisals by reference in the Prospectus and the
Registration Statement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
<TABLE>
<CAPTION>
Item 601(a) of Regulation
S-K Exhibit No. Description
------------------------- -----------
<S> <C>
23.1 Consent of Cushman & Wakefield, Inc. dated Sept. 17, 1997
23.2 Consent of Hospitality Valuation Services International,
dated August 26, 1997
23.3 Consent of O. Marshall Dodds Company, Inc., dated
August 27, 1997
2
<PAGE>
23.4 Consent of Hospitality Valuation Services International,
dated August 25, 1997
23.5 Consent of Regional Appraisal Associates,
dated August 25, 1997
23.6 Consent of Landauer Associates, Inc., dated Sept. 3, 1997
23.7 Consent of CB Commercial Real Estate Group, Inc.,
dated Sept. 10, 1997
99 Property Appriasals
Appraisal for St. Petersburg Bayfront Hilton
Appraisal for Radisson Plaza, Fort Worth
Appraisal for Howard Johnson, Middletown
Appraisal for Howard Johnson, Westbury
Market Study for Raeford - Hoke Village
Market Study for Edgecombe Square
Market Study for Northside Plaza - Henderson, N.C.
Market Study for Raleigh Boulevard Shopping Center
Market Study for Belvedere Plaza
Market Study for Lakeside Square and Lakeside Plaza
Shopping Center
Market Study for South Square Shopping Center
Market Study for Clover Plaza
Market Study for Tri-County Plaza
Market Study for Stephens Plaza
Market Study for Northside Plaza - Clinton, N.C.
Appraisal for Holiday Inn Select, Beverly Hills
Appraisal for Holiday Inn Select, Clark
Appraisal for Ramada Plaza, Woburn
3
<PAGE>
Appraisal for Howard Johnson Plaza, Saddle Brook
Appraisal for Westshore Mall
Appraisal for Howard Johnson, Commack
Appraisal for Howard Johnson, Woburn
Appraisal for Grand Kempinski
Appraisal for Ramada Plaza Pentagon
Appraisal for 605 Third Avenue
Market Study for Three Fountains Plaza
Market Study for Barnwell Plaza
Market Study for Capitol Square
Market Study for Clusters of Whitehall
Market Study for Cumberland Plaza
Market Study for Hampton Plaza
Market Study for Ravenel Towne Centre
Market Study for Shoppers Port
Market Study for Triangle Village
Market Study for Westland Square
Market Study for Widewater Square
Market Study for Woodberry Plaza
Market Study for Bay Village Shopping Center
Market Study for Blowing Rock Square
Market Study for Catawba Village
Market Study for Crossroads Shopping Center
Market Study for Cunningham Place
4
<PAGE>
Market Study for Jackson Plaza -
Goody's store
Market Study for Kalmia Plaza
Appraisal for Lawndale Village
Market Study for Waterway Plaza
Market Study for Waynesville Plaza
Market Study for NBSC Building
Market Study for 1634 Main Street
Market Study for Bainbridge Mall
Market Study for Edisto Village
Market Study for Fairfield Square
Market Study for Florence Mall
Market Study for Friarsgate Plaza
Market Study for Mauldin Square
Market Study for Shotwell Square
Market Study for St. George Plaza
Market Study for Taco Cid
Market Study for Blockbuster - Warner Robbins
Market Study for Edens KW Winnsboro
Market Study for Blockbuster - Broad River
Market Study for Blockbuster - Decker
Market Study for Dreher Plaza
Market Study for Forest Drive Shopping Center
Market Study for Gateway Plaza
Market Study for Goldrush Shopping Center
5
<PAGE>
Market Study for Lexington Village
Market Study for Mitchell Plaza
Market Study for Northway Plaza
Market Study for Palmetto Plaza
Market Study for Rosewood Extension
Market Study for Saluda Town Center
Market Study for Blockbuster - Irmo
Market Study for Blockbuster/Taco Bell -
Lexington
Market Study for Trenholm Plaza
Market Study for Western Square
Appraisal for Keystone at the Crossing Fashion Mall
Appraisal for Ramada Hotel, Omaha
Appraisal for Embassy Suites Palm Beach Gardens/Admiralty Office
Building
Appraisal for Newark/Freemont Hilton
Appraisal for Mansion Grove
Appraisal for Monroe Plaza
Appraisal for 25th Street Plaza
Appraisal for Northside Mall
Appraisal for Birney's Plaza
Appraisal for Mountainville Plaza
Appraisal for Martintown Plaza
Appraisal for Shillington Plaza
Appraisal for Cloud Spring Plaza Shopping Center
Appraisal for Midway Plaza
6
<PAGE>
Appraisal for Troy Plaza
Appraisal for Kingston Plaza
Appraisal for Plaza 15
Appraisal for New Smyrna Beach
Appraisal for K-Mart/ Shamokin Dam
Appraisal for Dunmore Plaza
Appraisal for Ames Plaza
Appraisal for Kings Fairground Shopping Center
Appraisal for Westgate Mall
Appraisal for Yorktown
Appraisal for Arrowhead Towne Center
Market Study for North Shore Towers
</TABLE>
7
<PAGE>
Pursuant to the requirements of the
Securities Exchange Act of 1934, the
Registrant has duly caused this report
to be signed on behalf of the
Registrant by the undersigned thereunto
duly authorized.
MORGAN STANLEY CAPITAL I INC.
By: /s/ Russell Rahbany
------------------------------
Name: Russell Rahbany
Title: Vice President
Date: September 26, 1997
8
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Item 601(a) of Regulation
S-K Exhibit No. Description Page
------------------------- ----------- ----
<S> <C> <C>
23.1 Consent of Cushman & Wakefield, Inc. dated Sept. 17, 1997
23.2 Consent of Hospitality Valuation Services International,
dated August 26, 1997
23.3 Consent of O. Marshall Dodds Company, Inc., dated
August 27, 1997
23.4 Consent of Hospitality Valuation Services International,
dated August 25, 1997
23.5 Consent of Regional Appraisal Associates,
dated August 25, 1997
23.6 Consent of Landauer Associates, Inc., dated Sept. 3, 1997
23.7 Consent of CB Commercial Real Estate Group, Inc.,
dated Sept. 10, 1997
99 Property Appraisals
Appraisal for St. Petersburg Bayfront Hilton
Appraisal for Radisson Plaza, Fort Worth
Appraisal for Howard Johnson, Middletown
Appraisal for Howard Johnson, Westbury
Market Study for Raeford - Hoke Village
Market Study for Edgecombe Square
Market Study for Northside Plaza - Henderson, N.C.
Market Study for Raleigh Boulevard Shopping Center
9
<PAGE>
Market Study for Belvedere Plaza
Market Study for Lakeside Square and
Lakeside Plaza Shopping Center
Market Study for South Square Shopping Center
Market Study for Clover Plaza
Market Study for Tri-County Plaza
Market Study for Stephens Plaza
Market Study for Northside Plaza - Clinton, N.C.
Appraisal for Holiday Inn Select, Beverly Hills
Appraisal for Holiday Inn Select, Clark
Appraisal for Ramada Plaza, Woburn
Appraisal for Howard Johnson Plaza, Saddle Brook
Appraisal for Westshore Mall
Appraisal for Howard Johnson, Commack
Appraisal for Howard Johnson, Woburn
Appraisal for Grand Kempinski
Appraisal for Ramada Plaza Pentagon
Appraisal for 605 Third Avenue
Market Study for Three Fountains Plaza
Market Study for Barnwell Plaza
Market Study for Capitol Square
Market Study for Clusters of Whitehall
Market Study for Cumberland Plaza
Market Study for Hampton Plaza
10
<PAGE>
Market Study for Ravenele Towne Centre
Market Study for Shoppers Port
Market Study for Triangle Village
Market Study for Westland Square
Market Study for Widewater Square
Market Study for Woodberry Plaza
Market Study for Bay Village Shopping Center
Market Study for Blowing Rock Square
Market Study for Catawba Village
Market Study for Crossroads Shopping Center
Market Study for Cunningham Place
Market Study for Jackson Plaza - Goody's store
Market Study for Kalmia Plaza
Market Study for Lawndale Village
Market Study for Waterway Plaza
Market Study for Waynesville Plaza
Market Study for NBSC Building
Market Study for 1634 Main Street
Market Study for Bainbridge Mall
Market Study for Edisto Village
Market Study for Fairfield Square
Market Study for Florence Mall
Market Study for Friarsgate Plaza
Market Study for Mauldin Square
11
<PAGE>
Market Study for Shotwell Square
Market Study for St. George Plaza
Market Study for Taco Cid
Market Study for Blockbuster - Warner Robbins
Market Study for Edens KW Winnsboro
Market Study for Blockbuster - Broad River
Market Study for Blockbuster - Decker
Market Study for Dreher Plaza
Market Study for Forest Drive Shopping Center
Market Study for Gateway Plaza
Market Study for Goldrush Shopping Center
Market Study for Lexington Village
Market Study for Mitchell Plaza
Market Study for Northway Plaza
Market Study for Palmetto Plaza
Market Study for Rosewood Extension
Market Study for Saluda Towne Centre
Market Study for Blockbuster - Irmo
Market Study for Blockbuster/Taco Bell - Lexington
Market Study for Trenholm Plaza
Market Study for Western Square
Appraisal for Keystone at the Crossing Fashion Mall
Appraisal for Ramada Hotel, Omaha
12
<PAGE>
Appraisal for Embassy Suites Palm Beach Gardens/Admiralty Office
Building
Appraisal for Newark/Freemont Hilton
Appraisal for Mansion Grove
Appraisal for Monroe Plaza
Appraisal for 25th Street Plaza
Appraisal for Northside Mall
Appraisal for Birney's Plaza
Appraisal for Mountainville Plaza
Appraisal for Martintown Plaza
Appraisal for Shillington Plaza
Appraisal for Cloud Spring Plaza Shopping Center
Appraisal for Midway Plaza
Appraisal for Troy Plaza
Appraisal for Kingston Plaza
Appraisal for Plaza 15
Appraisal for New Smyrna Beach
Appraisal for K-Mart/ Shamokin Dam
Appraisal for Dunmore Plaza
Appraisal for Ames Plaza
Appraisal for Kings Fairground Shopping Center
Appraisal for Westgate Mall
Appraisal for Yorktown
13
<PAGE>
Appraisal for Arrowhead Towne Center
Market Study for North Shore Towers
</TABLE>
14
<PAGE>
Cushman & Wakefield, Inc. [CUSHMAN & WAKEFIELD LOGO]
51 West 52nd Street
New York, NY 10019-6178
(212) 841-7500
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the Prospectus
Supplement relating to Morgan Stanley Mortgage Capital I Inc., Commercial
Pass-Through Certificates, Series 1997-LL1, (which we understand is a type of
"Securitization" defined as an offering of debt securities that, as applicable,
are registered with the Securities Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act") or are privately placed pursuant
to an exemption from the Act, in which the property appraised is part of a
pool of properties owned by various non-affiliated owners collateralizing such
offering) of our appraisal with respect to the property listed on the attached
annex, and we consent to the reference to our firm under the caption
"Experts" in such Prospectus Supplement.
CUSHMAN & WAKEFIELD, INC.
By: /s/ T. W. W.
-------------------------------
Signed on 9/17/97
-------------------------
<PAGE>
Cushman & Wakefield, Inc.
ANNEX
-----
1. 605 Third Avenue
<PAGE>
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the Prospectus
Supplement relating to Morgan Stanley Capital I Inc., Commercial Pass-Through
Certificates, Series 1997-LL1, of our appraisal with respect to the property or
properties listed on the attached annex, and we consent to the reference to our
firm under the caption "Experts" in such Prospectus Supplement.
HOSPITALITY VALUATION SERVICES INTERNATIONAL
By: /s/ Anne R. Lloyd
---------------------------
Name: Anne R. Lloyd
Title: Senior Vice President
Signed on August 26, 1997.
-----------
<PAGE>
ANNEX
-----
1. Newark/Fremont Hilton
2. Radisson Plaza, Fort Worth
3. Embassy Suites Palm Beach Gardens/Admiralty Office Building
4. St. Petersburg Bayfont Hilton
5. Holiday Inn Select, Beverly Hills
6. Holiday Inn Select, Clark
7. Howard Johnson, Woburn
8. Ramada Plaza Pentagon
9. Howard Johnson, Middletown
10. Howard Johnson, Westbury
11. Howard Johnson, Commack
12. Howard Johnson Plaza, Saddle Brook
13. Ramada Hotel, Omaha
14. Ramada Plaza Hotel, Woburn
<PAGE>
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the Prospectus
Supplement relating to Morgan Stanley Capital I Inc., Commercial Pass-Through
Certificates, Series 1997-LL1, of our market study and/or appraisal with
respect to the property or properties listed on the attached annex, and we
consent to the reference to our firm under the caption "Experts" in such
Prospectus Supplement.
O. MARSHALL DODDS COMPANY, INC.
By: /s/ O. Marshall Dodds
---------------------------
Name: O. Marshall Dodds
Title: President
Signed on August 27, 1997.
-----------
<PAGE>
ANNEX
-----
1. Bainbride Mall
2. Barnwell Plaza
3. Bay Village Shopping Center
4. Belvedere Plaza
5. Blockbuster/Taco Bell-Lexington
6. Blowing Rock Square
7. Capitol Square
8. Catawba Village
9. Clover Plaza
10. Clusters of Whitehall
11. Crossroads Shopping Center
12. Cumberland Plaza
13. Cunningham Place
14. Dreher Plaza
15. Edens KW Winnsboro - Advanced Auto
16. Edgecombe Squre - Tarboro, NC
17. Edisto Village
18. Fairfield Square
19. Florence Mall
20. Forest Drive Shopping Center
21. Friarsgate Plaza
22. Gateway Plaza
23. Goldrush Shopping Center
24. Hampton Plaza
25. Jackson Plaza Expansion
26. Kalmia Plaza
27. Lakeside Shopping Center
28. Lakeside Square
29. Lawndale Village
30. Lexington Village
31. Mauldin Square
32. Mitchell Plaza
33. Northside Plaza - Clinton, NC
34. Nortshide Plaza - Henderson, NC
35. Northway Plaza
36. Palmetto Plaza
37. Raeford-Hoke Village - Raeford, NC
38. Raleigh Boulevard Shopping Center - Raleigh, NC
39. Ravenel Town Center
40. Rosewood Extension
41. Saluda Towne Center
42. Shoppers Port
43. Shotwell Square
44. South Square Shopping Center
<PAGE>
ANNEX (cont'd)
--------------
45. St. Georges Plaza
46. Stephens Plaza - Toccoa, GA
47. Taco Cid
48. Three Fountains Plaza
49. Trenholm Plaza
50. Tri-County Plaza - Royston, GA
51. Triangle Village
52. Waterway Plaza
53. Waynesville Plaza
54. Western Square
55. Westland Square
56. Widewater Square
57. Woodberry Plaza
58. Blockbuster-Broad Rivers
59. Blockbuster-Decker
60. Blockbuster-Irmo - St. Andrews BB
61. Blockbuster-Warner Robbins
62. 1634 Main Street
63. NBSC Building
<PAGE>
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the Prospectus
Supplement relating to Morgan Stanley Capital I Inc., Commercial Pass-Through
Certificates, Series 1997-LL1, of our appraisal with respect to the property or
properties listed on the attached annex, and we consent to the reference to our
firm under the caption "Experts" in such Prospectus Supplement.
HOSPITALITY VALUATION SERVICES INTERNATIONAL
By: /s/ Anne R. Lloyd
---------------------------
Name: Anne R. Lloyd
Title: Senior Vice President
Signed on August 25, 1997.
-----------
<PAGE>
ANNEX
-----
1. Grand Kempinski Dallas
<PAGE>
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the Prospectus
Supplement relating to Morgan Stanley Capital I Inc., Commercial Pass-Through
Certificates, Series 1997-LL1, of our market study and/or appraisal with
respect to the property or properties listed on the attached annex, and we
consent to the reference to our firm under the caption "Experts" in such
Prospectus Supplement.
REGIONAL APPRAISAL ASSOCIATES
By: /s/ Kevin P. Michaels
__________________________________
Name: Kevin P. Michaels
Title: Vice President
Signed on August 25, 1997.
----------
<PAGE>
ANNEX
-----
1. North Shore Towers Apartments Incorporated
<PAGE>
[LANDAUER REAL ESTATE COUNSELORS LETTERHEAD]
CONSENT OF CONSULTANT
- ---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media, such as CD-ROM or the Internet) of the
Prospectus Supplement relating to the Morgan Stanley Capital I Inc., Commercial
Pass-Through Certificates, Series 1997-LL1, of our market study and/or
appraisal in full (including all assumptions and limiting conditions contained
therein) with respect to the property or properties listed below (to be
collectively referred to herein as the "Product"), and we consent to the
reference to our firm under the caption "Experts" in such Prospectus Supplement.
1. Appraisal and/or Market Study of Westshore Mall, Holland, MI (Appraisal
dated December 31, 1996)
2. Appraisal and/or Market Study of Mansion Grove Apartments, Santa Clara, CA
(Appraisal dated April 30, 1997)
3. Appraisal and/or Market Study of Fashion Mall at Keystone at the Crossing,
Indianapolis, IN (Appraisal dated March 31, 1997)
4. Appraisal and/or Market Study of Westgate Mall (Appraisal as of September
1997)
5. Appraisal and/or Market Study of Yorktown Mall (Appraisal as of September
1997)
6. Appraisal and/or Market Study of Arrowhead Towne Center (Appraisal as of
September 1997)
LANDAUER ASSOCIATES, INC.
By: /s/ Kevin D. Gray
-------------------
Name: Kevin D. Gray, CRE
Title: Managing Director
Signed on: September 3, 1997
<PAGE>
CONSENT OF CONSULTANT
---------------------
We consent to the inclusion of any form (whether in paper or digital format,
including any electronic media such as CD-ROM or the Internet) of the
Prospectus Supplement relating to Morgan Stanley Capital I Inc., Commercial
Pass-Through Certificates, Series 1997-LL1, of our market study and/or
appraisal in its entirety with respect to the property or properties listed
on the attached annex, and we consent to the reference to our firm under
the caption "Experts" in such Prospectus Supplement.
CB COMMERCIAL REAL ESTATE GROUP, INC.
By: /s/ Michael R. Pecorino
-------------------------
Name: Michael R. Pecorino
Title: SVP
Signed on September 10, 1997.
------------
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
=============
HVS
- -------------
International
=============
================================================================================
-------------------------------
Economic Study and Appraisal
-------------------------------
St. Petersburg Bayfront Hilton
-------------------------------
St. Petersburg, Florida
-------------------------------
Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
<PAGE>
[LETTERHEAD OF HVS INTERNATIONAL HOSPITALITY VALUATION SERVICES]
November 26, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: St. Petersburg Bayfront Hilton
St. Petersburg, Florida
Ref. #9610274
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Pinellas County
area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple interest in
the subject property described in this report, as of January 1, 1997, is:
$14,300,000
FOURTEEN MILLION THREE HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Catherine M. Tam
Catherine M. Tam
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
<PAGE>
HVS International, Mineola, New York Table of Contents
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Table of Contents
1. Executive Summary .............................................. 1
2. Nature of the Assignment ....................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood ................................ 7
4. Market Area Analysis ........................................... 29
5. Overview of External Forces Affecting the
U.S. Lodging Industry .......................................... 45
6. Lodging Market Supply and Demand Analysis ...................... 61
7. Projection of Occupancy and Average Rate ....................... 79
8. Highest and Best Use ........................................... 93
9. Approaches to Value ............................................ 95
10. Income Capitalization Approach ................................. 98
11. Sales Comparison Approach ...................................... 136
12. Cost Approach .................................................. 144
13. Reconciliation of Value Indications ............................ 150
14. Statement of Assumptions and Limiting Conditions ............... 154
15. Certification .................................................. 157
Addenda
Photographs of the Subject Property
Photographs of the Competitors
Legal Description
Synopsis of Franchise and License Agreements
Explanation of the Simultaneous Valuation Formula
Qualifications
Catherine M. Tam
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
<PAGE>
HVS International, Mineola, New York Executive Summary 1
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
1. Executive Summary
Property: St. Petersburg Bayfront Hilton
Location: 333 1st Street South
St. Petersburg, Florida 33701
Date of Inspection: October 23, 1996
Interest Appraised: Fee simple, including the land, the
improvements, and the furniture,
fixtures, and equipment
Date of Value: January 1, 1997
Land Description
- ----------------
Area: +/-4.68 acres, or +/-204,000 square feet
Zoning: CBD 2 - Central Business District
Assessor's Parcel Number: Parcel 6-C-526-R1-5
Improvements Description
- ------------------------
Age: Constructed in 1970, opened in 1971
Property Type: Full-service
Guestrooms: 333
Number of Stories: 15 stories
Food and Beverage Facilities:
Charmene's Restaurant 160 seats
Pizza Hut Food and Fun Court 32 seats
Brandi's Lounge 85 seats
Meeting Space: 15 rooms totaling 31,844 square feet
(including pre-function space)
Parking: 200 surface spaces
Summary of Value Parameters
- ---------------------------
Highest and Best Use (as if vacant): Hold for future development
Highest and Best Use (as improved): Lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Three
Stabilized Year: 1999
<PAGE>
HVS International, Mineola, New York Executive Summary 2
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Valuation Assumptions
- ---------------------
Mortgage Interest Rate: 9.5%
Amortization Period: 25 years
Debt Service Constant: .104844
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22.0%
Terminal Capitalization Rate: 11.0%
Brokerage and Legal Fees: 3.0%
Holding Period: Ten years
Calculated Discount Rate: 14.3 %
Estimates of Value
- ------------------
Income Capitalization Approach: $14,229,000
Sales Comparison Approach: $12,700,000 - $17,000,000
Cost Approach (Replacement Cost): $22,000,000
Market Value Conclusion: $14,300,000
Market Value Conclusion per Room: $43,000
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 3
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-204,000-square-foot (+/-4.68-acre) parcel improved with a 333-room,
full-service lodging facility known as the St. Petersburg Bayfront Hilton ,
which opened in 1971. In addition to guestrooms, the subject property contains a
160-seat restaurant, a 32-seat Pizza Hut Food and Fun Court, an 85-seat lobby
lounge, roundly 31,800 square feet of meeting and banquet space, an outdoor
swimming pool, a fitness center, and all other facilities and amenities typical
of a first-class hotel. The hotel is located at the northwestern corner of the
intersection formed by 1st Street South and 4th Avenue South in St. Petersburg.
Municipal jurisdictions governing the property include the City of St.
Petersburg, Pinellas County, and the State of Florida. The hotel's civic address
is 333 1st Street South, St. Petersburg, Florida, 33701.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the St.
Petersburg area for the purpose of estimating the market value of the subject
property. Market value is defined by the Office of the Comptroller of the
Currency (OCC), 12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under
conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what
they consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
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4. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for the use of Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by the Ashford Financial Corporation and the
Remington Hotel Company. Unless noted otherwise, we have inspected the
competitive lodging facilities and analyzed the sales summarized in this report,
and our value conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(1) Hotels,
Motels and Restaurants: Valuations and Market Studies,(2) The Computerized
Income Approach to Hotel/Motel Market Studies and Valuations,(3) and Hotels and
Motels: A Guide to Market Analysis, Investment Analysis, and Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management
A photocopy of the subject property's legal description, which was provided by
the Ashford Financial Corporation, is presented in the Addenda to this report;
the appraisers assume no responsibility regarding the accuracy of this document.
The subject property opened in 1971 as the St. Petersburg Hilton Hotel under a
franchise from the Hilton Hotel Corporation. This franchise agreement was
terminated and the hotel was sold to Darryl Wilde and a group of investors in
October of 1978. At that time, the property was renamed the Bayfront Concourse,
and operation was assumed by Bayfront Investors Limited. A conversion to a
Holiday Inn franchise was planned, contingent upon the infusion of appropriate
funds to upgrade the facility. The
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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renovation and conversion did not take place, and the owners filed for Chapter
11 federal bankruptcy protection. The hotel closed shortly thereafter. In 1986,
the property was purchased at auction by a bank consortium for $4,200,000 (the
amount of their outstanding loan). An affiliate of Seaway Hotels then purchased
the hotel for $4,350,000, which included the acquisition of an operating lease
of $150,000.
The hotel was extensively renovated in 1986 and early 1987 and upgraded to its
current condition; a full reopening as a Hilton Hotel took place in July of
1987. Funds for the acquisition and renovation of the property were obtained
from Industrial Revenue Bond financing (first position); Carteret Savings
(second position); and Seaway Hotels. By March of 1994, the hotel owners had
filed for bankruptcy. In September of 1994, the debt and equity interests in the
hotel were purchased by the Ashford Financial Corporation, the property's
current owner.
The subject property operates under a franchise agreement with the Hilton Hotel
Corporation, which expires at the end of August, 2005; an abstract of this
contract is presented in the Addenda to this report. The hotel is also subject
to a management agreement with the Remington Hotel Corporation; for the purpose
of this appraisal, we assume that the hotel will continue to be operated by the
Remington Hotel Corporation as a Hilton Hotel throughout the projection period.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Catherine M. Tam on October 23, 1996.
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located at the northwestern corner of the intersection
formed by 1st Street South and 4th Avenue South. Municipal jurisdictions
governing the property include the City of St. Petersburg, Pinellas County, and
the State of Florida.
According to a November 17, 1989 survey prepared by George F. Young, Surveyor
and Engineer, Inc., the rectangular subject parcel measures approximately
+/-204,000 square feet, or +/-4.68 acres, and has 510 feet of frontage on 1st
Street South to the east and 2nd Street South to the west. The 400.38-foot
northern property line faces an adjoining parcel improved with an office
building, and the 400.55-foot southern boundary faces 4th Avenue South. The
topography of the parcel is generally flat and drainage is adequate; overall,
the property's size and topography appear well suited for the current use. The
site appears to be fully developed, with no excess land available for expansion.
Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purpose of this appraisal, we assume
that the property is not encumbered by any unusual or onerous easements that
would affect its use or marketability.
Regional Access
A lodging facility's ease of access and visibility should be evaluated with
respect to local modes of transportation and the area's demand generators. The
subject property is readily accessible to a mixture of local, county, state and
interstate highways. Primary regional access to downtown St.
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Petersburg is provided by I-275, the major interstate serving the Tampa Bay
area. Other important roadways in the subject property's vicinity include I-4
and State Route 694.
Interstate 275 is a local highway that connects with I-75 just north of Tampa
and links that city with St. Petersburg. Interstate 275 extends just south of
Tampa International Airport and crosses Old Tampa Bay via the Howard Frankland
Bridge, then continues south through St. Petersburg and over the Sunshine Skyway
Bridge to Bradenton, where it again intersects I-75. Gandy Boulevard (State
Route 694) extends west from I-75 through Tampa and crosses Old Tampa Bay south
of the Howard Frankland Bridge. This route intersects I-275 approximately eight
miles north of downtown St. Petersburg.
Interstate 4 originates near Daytona Beach on Florida's eastern coast, passes
through Orlando, and terminates at the I-275 juncture in Tampa. This highway is
the major east/west route used by motorists traveling to central Florida
destinations such as Orlando and Tampa.
Originating near Sault St. Marie at the northernmost tip of Michigan, I-75 is a
primary north/south route through the eastern half of the United States. This
highway passes through Ohio, Kentucky, Tennessee, and Georgia before terminating
in Florida. Motorists traveling on I-75 can gain access to the subject property
via I-275 or Gandy Boulevard.
Overall, regional access to the subject property is favorable. The area's
well-developed network of high-speed interstates and superior local roadways
significantly increases the Hilton's primary market area and facilitates the
capture of both overnight guests and restaurant patrons.
Local Access and Visibility
Interstate highways that provide access to the hotel from I-275 include I-375
and I-175. Interstate 375 (Exit 10 off I-275) extends east from I-275 and
terminates at 6th Street North, approximately nine blocks northwest of the
Hilton. Interstate 175 (Exit 9 off I-275), which extends east from I-275 to its
termination three blocks southwest of the subject property, provides the most
convenient access to the hotel from I-275. Motorists travel east from the I-175
terminus along Delmar Terrace, turn north onto 1st Street South, and continue
north two blocks to the Hilton's entrance. Direct access to the site is provided
by 1st Street South, which forms the eastern boundary of the subject parcel. As
it passes the property, 1st Street South is a three-lane, one-way route carrying
northbound traffic. The one-way street system
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throughout downtown St. Petersburg facilitates traffic flow and does not impede
access to the hotel; the Hilton's proximity to the terminus of I-175 is also
advantageous. Secondary access is provided by 2nd Street South (a one-way,
southbound route), which forms the parcel's western border.
A clear view of the Hilton is available from the eastern portion of I-175 and
from 1st Street South. The 15-story hotel rises well above most of the
surrounding improvements, and thus is highly visible throughout the downtown
region. In addition, the property is bordered by roadways on the south, east,
and west, and its parking area separates the hotel improvements from the office
building that adjoins the parcel to the north.
Airport Access
Tampa International Airport is the major commercial airport serving the Tampa
Bay area. Access to downtown St. Petersburg from Tampa International Airport is
provided by I-275, which crosses Old Tampa Bay via the seven-mile long,
eight-lane Howard Frankland Bridge. The expansion of the Howard Frankland
Bridge, which was completed in 1992, has significantly improved transportation
between Tampa and St. Petersburg and neighboring communities. This expansion
more than doubled the capacity of the bridge, and has alleviated the congestion
problem that plagued the original span. As a result, travel time between St.
Petersburg and Tampa International Airport has been reduced significantly,
particularly during peak traffic periods. Guests of the subject property can now
reach the Tampa International Airport in 20 to 25 minutes under normal driving
conditions.
A few commercial airlines and private planes use St. Petersburg-Clearwater
International Airport, which is located west of the Howard Frankland Bridge in
Clearwater. To reach the subject property from this facility, motorists take
Roosevelt Boulevard to southbound I-275, and continue into downtown St.
Petersburg. Private and corporate planes also have access to Albert Whitted
Airport, which is located two blocks south of the subject property, off 1st
Street South.
Access to Local Demand Generators
The St. Petersburg Bayfront Hilton is situated in close proximity to a number of
the area's generators of lodging demand. The following table outlines some of
these demand generators and their distance from the subject site.
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Table 3-1 Local Demand Generators
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Approximate Distance
from Subject Site Approximate Driving
Demand Generator (in Miles) Time (in Minutes)
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Bayfront Center <.0.1 0
Florida International Museum 0.5 5
Poynter Institute 0.5 5
University of South Florida 0.5 5
Thunderdome 1.5 5
St. Petersburg Beach 10.0 15
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The subject site is situated in close proximity to leisure attractions, offices,
and educational institutions which generate some room night demand; however, a
majority of the Hilton's occupancy is derived from meeting and group business
that originates from outside the St. Petersburg area.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water City of St. Petersburg
Sewer City of St. Petersburg
Electricity Florida Power
Gas People's Gas
Garbage and Trash Waste Management of Tampa
Local Telephone GTE
Long-Distance Telephone MCI
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of this factor.
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Flood Zone
Possible locational hazards include flood potential. According to the Flood
Insurance Rate Map for Community Number 125148, Panel 23 (revised in 1983), part
of the subject site lies within the A8 flood zone, which represents an area of
100-year flood.
Seismicity
Information regarding the seismicity of the area surrounding the subject
property was not available, but we assume that the hotel is not situated in an
area of seismic danger.
Conclusion
The subject parcel appears well suited as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o Good visibility throughout the downtown area
o Harbor view from most guestrooms
o Convenient access to downtown St. Petersburg and Tampa
Disadvantages
o Non-oceanfront location
The subject site's capacity, configuration, and access pattern are considered
appropriate for its current use. The parcel is well situated with respect to
surrounding highways, and access is favorable. Transportation from the Hilton to
Tampa International Airport was significantly improved by the recent expansion
of the Howard Frankland Bridge, and a clear view of the hotel is available from
the surrounding area.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by the subject property's
management representatives.
The St. Petersburg Bayfront Hilton is a full-service lodging facility containing
333 rentable units, +/-31,844 square feet of meeting space, two
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restaurants, a lounge, an outdoor swimming pool, a health club, a gift shop, and
appropriate back-of-the-house facilities. The 15-story property was constructed
in January of 1970, opened in 1971, and is 26 years old as of the date of this
appraisal. As noted earlier, the hotel was acquired by the Ashford Financial
Corporation in September of 1994. Overall, the hotel is judged to be in good
condition, and management representatives report that all building systems are
in working order. The property operates under a license agreement with the
Hilton Hotel Corporation, and reportedly meets the standards for lodging
facilities of that brand. Based on our inspection and information provided by
management representatives, the following table summarizes the facilities
available at the subject property.
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Table 3-3 Facilities Summary
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Guestrooms (No. of Units)
Kings 121
Double/doubles 184
Suites 28
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Total 333
Food and Beverage Outlets (No. of Seats)
Charmene's Restaurant 160
Pizza Hut Food and Fun Court 32
Brandi's Lounge 85
Meeting and Banquet Rooms (Square Footage)
Grand Ballroom 7,221
Bayboro Room 986
Skyway Room 475
Pier Room 450
Harborview Room 731
Boardroom 423
Dali Room 2,120
Janus Room 1,749
Whitted Room 2,067
Poynter Room 2,220
Demens Room 975
Williams Room 975
Pinellas East 496
Pinellas West 192
Executive Conference Center 1,664
Pre-Function Space 9,100
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Total 31,844
Recreational & Other Amenities
Outdoor swimming pool and whirlpool,
health club, gift shop, travel agency
Surface Parking Spaces 200
Elevators
Three passenger, one service
Life-Safety Systems
Full sprinkler system, hard-wired smoke alarms
Laundry
Two 125-lb.-capacity washers, one 75-lb.-capacity washer,
four 110-lb.-capacity dryers
Construction Details
Steel and concrete structure, paint and stucco exterior,
double-paned, glazed windows
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Property Exterior
The hotel structure is situated on the south side of the site. Paved parking
areas accommodating 200 vehicles are located on the north side of the parcel;
additional parking is available to hotel guests at the Bayfront Center, across
the street from the Hilton.
Primary vehicular access to the subject property is provided by 1st Street South
(a one-way, northbound route), which forms the site's eastern boundary. From 1st
Street South, guests can either drive through the hotel's porte cochere to the
parking lot or enter the parking lot directly through a separate driveway
entrance located just north of the porte cochere. Secondary access to the
parking lot is provided by 2nd Street South (a one-way, southbound route), which
forms the subject site's western boundary.
Two main entrances to the hotel are available. One is located at the porte
cochere, on the east side of the hotel structure; another is found on the north
side of the building, and is the most convenient means of access from the
parking lot. A third entrance is located on 4th Avenue South (a one-way,
westbound route), which borders the subject site to the south; this entrance
provides direct access to the meeting and banquet areas and the leased health
club, which is open for public membership. Service traffic can gain direct
access to the hotel's loading dock, which is located on 2nd Street South.
The hotel building is constructed of steel and poured/cast-in-place concrete.
The exterior walls consist of poured concrete and feature an off-white paint and
stucco finish. None of the hotel's double-pane, glazed windows can be opened.
Roofing is of metal and concrete, and is covered with asphalt and roll roofing.
The red Hilton logo and name mark the structure's west side, and a sign bearing
the Hilton logo is installed on the east side of the building.
Construction and Design
The subject property features a 15-story guestroom tower and two adjoining
one-story buildings that house a majority of the public space. The one-story
structure located on the north side of the improvements was constructed when the
building was gutted and renovated in 1986/87, prior to the reopening. This new
construction involved expanding the lobby and installing a new entrance on the
east side of the hotel. Another one-story building is situated immediately south
of the guestroom tower; this structure houses the meeting space and most of the
back-of-the-house facilities.
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A majority of the Hilton's public space, including the lobby, the administrative
offices, the food and beverage outlets, the gift shop, the outdoor swimming
pool, the meeting space, and the back-of-the-house facilities, is located on the
first two floors. All of the function rooms are situated on the first floor.
Guestrooms are located on the second through 15th floors. Until December of
1995, the 14th and 15th floors had been designated as concierge levels, but this
designation has been terminated. The area that formerly served as the concierge
lounge is situated on the 15th floor, and is now used as overflow meeting space.
Lobby
The lobby occupies the northeastern portion of the hotel's first floor. Guests
enter the building through the porte cochere, and the front desk is situated
directly to their left; an alcoved sitting area is located directly right of the
main entrance. Brandi's Lounge and Charmene's Restaurant lie ahead, in the
northwestern portion of the first floor. Guest elevators, which are not visible
from the front desk, are located beyond the front desk to the left, before
Brandi's Lounge. Guests who use the second main entrance, which is located on
the hotel's north side, find Brandi's and Charmene's to their left, the front
desk and alcoved sitting area to their right, and the elevator lobby directly
ahead. A gift shop is situated to the right of the guest elevators, and a travel
agency is located to the left. Two hallways extend from either side of the guest
elevators and lead to the hotel's south side, which houses the meeting and
banquet space, the sales and executive offices, the health club, and the Pizza
Hut Food and Fun Court. Most of the subject property's public space was
recarpeted in 1995, including the lobby.
Food and Beverage Outlets
The subject property features three food and beverage outlets. Charmene's, which
is located west of the lobby, is the hotel's main restaurant, and provides
breakfast, lunch, and dinner seven days a week. This facility is open from 6:30
am to 2:00 pm and from 5:00 pm to 10:00 pm (9:00 pm on Sundays). The north side
of the 160-seat restaurant has a casual atmosphere, featuring open tables and a
view of the hotel's lobby to the east and the outdoor pool to the north, while
the south side features a more intimate setting, featuring a number of booths
and small, private rooms. In 1993 (under Seaway Management), Charmene's was
divided into two areas, one of which was occupied by Eli's Steakhouse. After
acquiring the hotel, the Remington Hotel Corporation returned the food and
beverage outlets to their former configuration (i.e., one 160-seat facility
known as Charmene's). Overall, the restaurant appears to be in good condition; a
cosmetic upgrading was completed in 1996. Management representatives indicate
that they
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intend to change the restaurant's overall concept and menu in the near future.
Brandi's Lounge adjoins the east side of Charmene's. Guests enter the lounge
from the lobby and encounter the bar on the left; Charmene's is located directly
ahead. Including the lounge area that is situated south of the bar, Brandi's has
a total seating capacity of 85.
In 1993, the New York Deli was converted to the Pizza Hut Food and Fun Court.
This 32-seat facility, which is located in the southeastern portion of the
hotel, also has a separate entrance from 1st Street South. Open for lunch daily,
this food and beverage outlet offers standard fare from Pizza Hut (made on the
premises), as well as various deli selections and frozen yogurt. All items are
available for take-out or delivery (including guestroom pizza delivery), or can
be eaten on the premises. The Food and Fun Court also offers an array of video
games and vending machines. The addition of this outlet has enabled the subject
property to offer guests a fast and inexpensive food alternative while also
attracting patronage from nearby buildings.
Meeting and Banquet Space
As noted earlier, the Hilton's function space is concentrated on the first
floor, in the south side of the building. Fifteen meeting and banquet rooms
provide a total of 22,744 square feet of space, not including 9,100 square feet
of pre-function space. As guests enter the south wing of the hotel, the
7,221-square-foot Grand Ballroom (which is divisible into two sections) is
situated to the left (west). A hallway extending to the right (east) leads to
the Bayboro Room, the Board Room, the Skyway Room, the Pier Room, the Harbor
Room, and the Pinellas East and West Rooms. These facilities have no direct
kitchen access, and thus are not used for banquets. Farther south, another
hallway extends in a westerly direction along 4th Avenue South, providing access
to the hotel's Williams Room, Demens Room, Dali Room, Janus Room, Whitted Room,
Poynter Room, and the Executive Conference Center. These rooms are connected to
the kitchen by a service corridor. The Dali, Janus, and Whitted Rooms can be
combined to form what is commonly referred to as the Junior Ballroom. The Demens
Room and the Williams Room, which each measure 975 square feet, can also be
joined together. The Executive Conference Center, which located in the southwest
corner of the hotel, can be divided into eight separate rooms.
By virtue of its disproportionately large inventory of meeting space, the Hilton
successfully penetrates those portions of the meeting and group market
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that require a high ratio of meeting space to guestrooms. Management
representatives report that carpeting in many of the meeting rooms was replaced
in 1995, and the lighting grids in the Grand Ballroom were replaced in 1996.
Guestrooms
The subject property's 333 guestrooms consist of 121 king units, 184
double/doubles, and 28 suites. The average guestroom measures 325 square feet.
Typical king rooms are furnished with a king bed, a chest of drawers, a
television stand, a desk and chair, two nightstands, and either a sofa, a lounge
chair, or an activity table with two chairs. Standard double/double rooms are
equipped with two double beds, a chest of drawers, a television stand, a desk
and chair, and one nightstand. All units offer a remote-control color television
with on-command video, a digital alarm clock, a telephone, and an iron and
ironing board.
All guestrooms feature carpet flooring, vinyl wallcovering, popcorn ceilings,
and a combination of fluorescent and incandescent lighting. At the time of our
inspection, the subject property's guestrooms appeared to be in good condition.
Guestrooms soft goods (including carpets, draperies, and bedspreads) were
replaced in all units in 1994 and 1995. The subject property acquired on-command
video in 1995, and the guestroom telephone and key systems were upgraded in
1996. Nine units have been modified for the use of disabled guests, and four of
these have roll-in showers; management representatives indicate that the number
of wheelchair-accessible guestrooms will be increased to 12 in the near future.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with carpets, vinyl
wallcovering, popcorn and tile ceilings, and fluorescent lighting fixtures.
Stairwells are located at each end of the corridors, and vending and ice
machines are located on the west end of the guestroom floors.
Management has created no-smoking levels on Floors 3, 4, 5, 6, 7, 9, 10, and 14
floors; the west wing of the 11th Floor has also been set aside for non-smoking
guests. This yields a total of 215 units, which is more than 64% of the hotel's
overall room count. This type of amenity costs very little and requires no
structural changes. We expect that the number of rooms allocated for this
purpose will be increased or reduced depending on demand and guest response.
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Recreational Amenities
Recreational amenities at the subject property include an outdoor swimming pool,
an outdoor whirlpool, a health club, and a small game room. The outdoor swimming
pool and whirlpool are located near the northwest corner of the hotel structure,
just outside Charmene's Restaurant. A path extending west from the hotel's north
entrance leads to the swimming pool; this is also accessible from Charmene's and
Brandi's, and from the west end of the second floor (via a set of outdoor
stairs).
St. Anthony's Health and Fitness Connection, which is leased to an outside
operator, is located in the southeastern corner of the hotel, directly east of
the entrance from 4th Avenue South. The health club is equipped with a number of
treadmills, stationary bikes, stairclimbers, rowers, Cybex machines, free
weights, and an aerobics floor. Hotel guests are charged $5 to use the health
club, and this amount can be charged to their rooms.
A small selection of video games is available in the Pizza Hut Food and Fun
Court, in an area that is kept open when the food service area is closed.
Additional amenities at the hotel include a gift shop (installed in 1996) and an
in-house travel agency, which are both leased to outside operators.
Back-of-the-House Space
A majority of the subject property's back-of-the-house space is situated on the
first two levels. The kitchen is strategically located on the west side of the
first level, between Charmene's and the banquet rooms. According to management
representatives, the kitchen is of sufficient size and is well equipped to meet
the property's needs. The southern half of the kitchen serves Charmene's and
handles room service, while the northern half is dedicated to banquet use. A
service corridor extends from the kitchen and provides direct access to the
Grand Ballroom, the Junior Ballroom (the Janus, Dali, and Whitted Rooms), the
Demens and Williams Rooms, the Poynter Room, and the Executive Conference
Center.
Most of the subject property's administrative offices are located on the east
side of the first level. The reservations and accounting offices, which are
located behind the front desk, connect to the sales and executive offices, which
are situated farther south. A set of doors leading to the sales and executive
offices is located on the east side of the Grand Ballroom pre-assembly area,
just north of the hallway that extends east to the smaller meeting rooms. The
human resources office and the employee dining area are located on the west side
of the first level, west of the kitchen; an employee entrance is located on 2nd
Street South, just south of the loading dock.
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Housekeeping, laundry, mechanical, and electrical areas are located on the
second level. The laundry room is equipped with two 125-pound-capacity washers,
one 75-pound-capacity washer, four 110-pound-capacity dryers, two folders, and
one ironer. The property uses chutes to transport soiled laundry, and storage
areas for housekeeping supplies are located on Floors 3 through 15. Based on
information provided by management representatives, all of the subject
property's operating systems are in working order.
Vertical Transportation
Vertical transportation is provided by one passenger elevator with a 4,000-pound
capacity, two with 3,000-pound capacities, and one service elevator with a
2,500-pound capacity. The three passenger elevators are located slightly east of
the center of the tower, and the service elevator is located at the west end.
All four elevators are electric and provide access to each of the hotel's 15
floors; the elevators were last renovated in 1994, and the cabs were being
upgraded at the time of our inspection. In addition, stairwells are located at
each end of the guestroom tower.
Heating, Ventilation, and Air Conditioning
Heating is provided by four natural-gas boilers that were installed during the
1987 renovation. Heating, ventilation, and air conditioning (HVAC) for the
guestrooms are provided by a centralized, two-pipe system that was also
installed in 1987. The centralized HVAC system for the public areas employs one
packaged air conditioner and 18 air handling units. The subject property has a
total of four chillers. Management representatives indicate that with the
exception of a main hallway air conditioning unit that needs replacement, all
HVAC equipment is in good working condition.
Fire Protection
Fire sprinklers are installed throughout the subject property. These are
augmented by hard-wired, single-station smoke alarms in the guestrooms, public
spaces, and employee work areas and a voice alarm system. The property's fire
alarm is wired to the front desk, but is not connected to the fire department.
Security
Guestrooms are equipped with electronic locks, which provides some measure of
security. We also note that the property features separate entrances for
employees and guests, and access to the swimming pool area and to certain hotel
entrances is restricted at night. Management representatives believe that
security is adequate.
Asbestos
According to information provided by management representatives, there is no
asbestos present in the subject property's improvements; however, we have not
been provided with an asbestos report to confirm this assertion.
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The reader should be advised that any costs associated with asbestos removal or
containment may have an unfavorable impact on the hotel's market value, and the
estimate set forth in this appraisal reflects our value conclusions prior to the
deduction of any such costs. We suggest that interested parties initiate an
independent analysis regarding current asbestos levels and the capital
expenditures necessary to remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Improvements Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
The hotel features good-quality construction, and the building systems are
reported to be in good working order. Although the property opened in 1971, an
extensive renovation that was completed in 1987 addressed most of the building
systems. The guestrooms and public areas appear to be in good condition, and
should require only normal maintenance in the near future. The property offers
an unusually large amount of meeting and banquet space (more than 31,000 square
feet) for a 333-room hotel, which is a competitive advantage in terms of
capturing meeting and group demand. The food and beverage outlets are in good
condition, and enhance the hotel's ability to attract both guests and local
patrons. For the purpose of this appraisal, we assume that the Hilton will be
maintained in its current condition throughout the ten-year holding period.
Specifically, we assume that management will employ standard preventive
maintenance measures, and that a reserve for replacement fund will be
established to cover the cost of any capital expenditures that may be necessary
in the future.
ZONING
According to the zoning regulations of the City of St. Petersburg, the subject
property is zoned as follows.
CBD 2 - Central Business District
This zoning designation predominates in the subject property's immediate area.
Uses that are expressly permitted under this classification include lodging
facilities, office towers, and retail outlets. Based on this
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information, the subject property appears to conform to local zoning
regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning ordinances, building codes, and
all other applicable regulations. Our zoning analysis should be verified before
any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property tax is one of the primary revenue sources of municipalities. Based on
the concept that the tax burden should be distributed in proportion to the value
of all properties within a taxing jurisdiction, a system of assessments is
established. Theoretically, the assessed value placed on each parcel bears a
definite relationship to market value, so properties of equal market value will
have similar assessments and properties with higher and lower values will have
proportionately larger and smaller assessments. Depending on the taxing policy
of the municipality, property taxes can be based on the value of the real
property or the value of the personal property and the real property. The taxing
jurisdiction governing the subject property assesses both real and personal
property. Assessments are based on an income approach, and the assessed value
ratio is reported to be 100% of market value.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable. A review of the assessed values of four comparable
hotels in Pinellas County reveals the following information.
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Table 3-4 Assessed Value of Comparable Hotels
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Total Assessment Assessment per Room
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No. of Real Personal Real Personal
Hotel Rooms Property Property Property Property
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Subject Property 333 $9,312,900 $1,312,340 $27,967 $3,941
Renaissance Vinoy 360 29,780,200 N/A 82,723 N/A
Heritage Holiday Inn 72 1,247,300 267,280 17,324 3,712
Courtyard by Marriott 149 3,288,300 90,180 22,069 605
Hampton Inn 118 2,498,900 470,830 21,177 3,990
Source: Pinellas County Assessor's Office
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The previous table illustrates the assessed values of the Hilton and four of its
competitors that are located in Pinellas County. We note that although the two
properties compete by virtue of their nearby locations, the Renaissance Vinoy
offers facilities that are far superior to those of the subject property;
consequently, it is appropriate that the total per-room assessment of the
Renaissance Vinoy is substantially higher than that of the Hilton. The subject
property's real property assessment is higher than those of the Heritage Holiday
Inn, the Courtyard, and the Hampton Inn on a per-room basis. Given its greater
scope of facilities (and its extensive meeting space in particular), the
Hilton's higher assessed value appears appropriate. The subject property's
per-room personal property assessment is higher than those of the Courtyard and
Heritage Holiday Inn, but is slightly lower than that of the Hampton Inn, which
again appears reasonable given the amount and condition of its personal
property.
The Hilton's tax burden is allocated to several categories: Pinellas County,
School (State of Florida), School (City of St. Petersburg), City of St.
Petersburg, Southwest Florida Water Management, Miscellaneous Pinellas County,
Juvenile Welfare, Suncoast Transit Authority, and City of St. Petersburg Debt.
The overall tax rate equates to 25.6430 per $1,000 of assessed value for real
property, and 24.2323 per $1,000 of assessed value for personal property. In
1996, the Hilton's assessed values were $9,312,900 for real property and
$1,312,340 for personal property. Thus, the subject property's 1996 tax burden
is calculated as follows.
Real Property:
$9,312.900 x 25.6430 = $238,810.69
Personal Property:
$1,312.340 x 24.2323 = $31,801.02
The subject property's total 1996 tax burden is $270,611.71. Applying projected
inflationary increases to this amount yields the following forecast of property
taxes.
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Table 3-5 Forecast of Property Taxes
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1997 1998 Stabilized
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Projected Property Taxes (+000) $280 $290 $300
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The subject property's neighborhood features a mixture of first-class retail and
office space along the west side of 1st Street South, north of the hotel.
Low-rise commercial buildings and middle-income residential housing characterize
the area south of the Hilton along 1st Street South and the secondary streets
west of 1st Street South. A number of vacant lots are also located in the
immediate area. The hotel is situated approximately two blocks south of the most
densely developed portion of St. Petersburg's central business district (the
area that houses the newest and largest offices) and one block west of the Tampa
Bay coastline.
Low-rise commercial buildings and middle-income residential developments prevail
in the areas south and west of the Hilton, which is located at the southernmost
end of downtown St. Petersburg. The blocks north of the hotel are dominated by
commercial uses such as office space and retail outlets.
Directly north of the subject property is the 12-story, 239,000-square-foot City
Center office building, which was completed in 1984; anchor tenants in this
retail/office complex include Northern Trust Bank, Hough & Co., and VSI. The
center of the downtown district commences one block north of the City Center
building, near 1st Avenue North and 1st Avenue South. Pinellas County's newest
and tallest office building, the Barnett Tower, is located in this district.
This structure, which opened in the spring of 1991, contains 263,000 square feet
of office space on 26 floors. The first two levels house retail outlets and
restaurants; the building's total square footage is estimated at 307,000. Other
major office buildings in the central business district include the Bankers
Financial Center, the South Trust Building, and Plaza Tower and Shops. The
Bankers Financial Center (which was
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completed in 1984) is a 17-story, 260,000-square-foot building with a 500-car
garage and 5,000 square feet of retail space. Recently acquired by Bankers Life
Insurance Company, the tenth floor underwent a $175,000 build-out and renovation
that was completed in early 1996. The South Trust Building (which was
constructed in 1985) is a 17-story, 207,000-square-foot office building with a
225-car garage. The Plaza Tower and Shops is a retail and office complex that
measures approximately 150,000 square feet. This facility houses companies such
as Republic Bank, Cherry Bekaert & Holland, and J.S.A. Health Care Corp.
The dominant employment sectors in downtown St. Petersburg are health and
Medical Services; Finance, Insurance, and Real Estate; Publishing; Business
Services; Retail Trade (including hotels ); and Education and Research. The area
has three major hospitals, and the downtown market contains roundly 1,960,000
square feet of multi-tenant office space. The ten-square-mile district known as
the St. Petersburg Enterprise Zone includes all of the downtown area and
adjacent neighborhoods to the west and south. Those who establish or expand
businesses in the zone, hire employees from the zone, or contribute to approved
community projects within the zone can receive valuable state tax credits; in
1995, 40 businesses received a total of $500,000 in state tax credits as part of
this program.
A significant amount of the downtown office space was constructed in the 1980s,
when the area underwent a surge in development activity. At that time, the St.
Petersburg central business district was expected to emerge as the second most
prominent regional center, after Tampa; however, market trends and economic
conditions in the late 1980s and early 1990s had a sobering effect on the
absorption of new space. High vacancies placed severe downward pressure on
rental rates, and as a result, the downtown district has evolved into a
secondary office location within the Tampa-St. Petersburg market. At present,
much of the space is occupied by the back-office components of firms located in
Tampa. Other tenants include financial institutions, insurance companies, law
firms, and accounting firms. On the whole, these types of businesses do not
produce strong hotel demand, and the number of commercial room nights generated
by the central business district office market is limited.
One of the area's noted tourist attractions is the Pier, a mixed-use complex
that features food and beverage facilities, an aquarium, and retail outlets
housed in a five-story building at the end of the St. Petersburg Pier. This
facility was expanded and renovated, at an estimated cost of $12,500,000, in
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1988. Annual attendance is approximately 2,000,000, and the Pier is estimated to
have an annual economic impact of some $20,000,000. The Pier Aquarium is managed
by the University of South Florida Science Department (St. Petersburg campus)
and hosts an estimated 750,000 visitors each year.
Al Lang Stadium is located on the downtown waterfront at 1st Street South, just
east of the subject property. This 6,300-seat, outdoor stadium is home to the
St. Petersburg Cardinals (the area's permanent minor league baseball team), and
is used by the St. Louis Cardinals during spring training. The Tampa Bay Devil
Rays will also use the stadium for spring training during their first season in
1998.
The Bayfront Center, which is situated directly southeast of the Hilton,
features an 8,400-seat arena and the Mahaffey Theater for the Performing Arts,
which seats 2,000 people. Approximately 1,800 parking spaces are available on
the site. Both the Tampa Bay Terror, a member of the National Professional
Soccer League, and the Tampa Bay Windjammers, a member of the United States
Basketball League, play home games at the center. The arena has also been used
to host "Disney on Ice," and three major boat shows are held there each year.
The center was constructed in 1990 at a cost of $25,500,000, which included a
renovation of the existing arena.
Immediately north of the Pier, along the waterfront, is the newly restored
Renaissance Vinoy Hotel. This facility was constructed in the 1920s and reopened
as Stouffer's Vinoy Resort in mid-1992. The property offers 360 guestrooms (102
of which are housed in a new wing that adjoins the original structure), a
parking garage, a marina, a golf course, and a spa.
Although it is not located in the subject property's immediate neighborhood, the
Thunderdome (formerly known as the Suncoast Dome, and soon to be renamed
Tropicana Field) is one of downtown St. Petersburg's important activity centers.
This $110,000,000 facility was completed in February of 1990 and is located
roughly 12 blocks west of the Hilton, near the intersection of Interstates 275
and 175. The multi-purpose, domed stadium is the largest enclosed,
climate-controlled sports and entertainment facility in Florida, and seats
42,000 people for baseball and up to 50,000 for concerts. This venue also hosts
a variety of sports events, trade shows, conventions, and so forth. The stadium
features 152,000 square feet of uninterrupted floor space and 4,250 on-site
parking spaces, and there are plans to expand on-site parking to 7,000 spaces.
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The primary purpose of constructing the Thunderdome was to attract a National
League baseball team. Although the city was unsuccessful in obtaining an
expansion team in 1992, it was announced on March 9, 1995 that a team
tentatively known as the Tampa Bay Devil Rays would begin play at the
Thunderdome. This new major league franchise, which is expected to enter the
American League, was acquired for a reported price of $130,000,000. Although
this franchise's impact on the local hotel market remains unknown, the subject
property is expected to capture some demand generated by visiting teams, fans,
and members of the press.
The National Hockey League Tampa Bay Lightning and the Arena Football League's
Tampa Bay Storm have set staggering single-game attendance records in the
Thunderdome in recent years. On October 7, 1996, the Thunderdome closed for a
$62,000,000 renovation. The stadium will undergo a 15-month upgrade, resulting
in 3,000 additional seats (increasing the seating capacity for baseball to
45,000), 19 new escalators and elevators, wider concourses, a new food court, 85
new concession and souvenir counters, and fan and children's activity areas. The
construction project is anticipated to create an economic spin-off of
$125,000,000, including 1,900 new jobs and $39,000,000 in wages. According to
the Tampa Bay Devil Rays' managing general partner, the home-base presence of
the team will create an annual economic impact estimated at $170,000,000 to
$200,000,000 once they take the field in 1998.
In March of 1994, the Thunderdome hosted the first round of the NCAA basketball
championships, and it will host the Final Four of this event in 1999. The
facility will also be the site of the men's NCAA basketball southeast regional
tournament in 1998. The City of St. Petersburg is expected to reap an economic
impact of nearly $70,000,000 from the two events.
Other attractions in downtown St. Petersburg include a number of museums. The
Salvador Dali Museum houses the world's largest collection of the artist's work,
valued at over $125,000,000. This facility underwent a $1,100,000 expansion in
1988 involving the addition of a community room, a library, and storage space
for the collection; during 1995, an interior renovation valued at $165,000
expanded the museum's wall space by 130%. It is estimated that 250,000 visitors
attend the museum each year.
The Museum of Fine Arts features European, American, pre-Columbian and Asian
art, sculpture, and period rooms with antiques and historical furniture. The
museum is renown for its gallery of Steuben crystal. In 1988,
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this Mediterranean-style facility, which is located on the downtown waterfront,
underwent a $2,200,000, 30,000-square-foot expansion involving the addition of a
second floor.
The Florida International Museum (formerly known as the Florida Cultural Exhibit
Center) opened in 1994 on the site formerly occupied by the Maas Brothers
department store. Acquired and renovated by Florida Cultural Exhibitions, this
facility is designed to house traveling international exhibitions. The first
exhibit, "Treasures of the Czars," attracted more than 600,000 visitors in six
months of 1995. The second exhibition, "Splendors of Ancient Egypt," opened in
February of 1996 and attracted approximately 300,000 people during its six-month
run. The museum's current exhibition, "Alexander the Great," began on October 1,
1996 and will continue until the end of March, 1997; this show is expected to
attract 500,000 attendees.
Other museums in the area include Great Explorations and the St. Petersburg
Museum of History. A $1,000,000 renovation of a former sporting goods store
produced Great Explorations. This facility, which houses rotating exhibits, a
gift shop, and hands-on activities in the arts, science, and health fields,
draws approximately 130,000 visitors annually. The St. Petersburg Museum of
History features three separate galleries, and recently underwent a $1,000,000
renovation and expansion.
The Poynter Institute and the St. Petersburg (Bayboro) campus of the University
of South Florida (USF) are located south of the subject property, within walking
distance. The Poynter Institute is a private, non-profit, accredited teaching
and research institution dedicated to newspaper and broadcast journalism. The
University of South Florida offers academic studies to approximately 2,500
students; the school also offers a graduate program in marine sciences. The
$22,000,000 USF/DEP Marine Research Facility, developed on the St. Petersburg
campus in 1994, is one of the most prestigious research facilities of its type
in the country. The joint venture project was developed to serve the Florida
Marine Research Institute, a branch of the Florida Department of Environmental
Protection (DEP), and USF's marine science department. The six agencies that
comprise the research complex currently employ more than 500 people, and bring
important educational conferences and meetings to the area.
In conclusion, the neighborhood surrounding the St. Petersburg Bayfront Hilton
appears moderately well suited for the operation of a first-class lodging
facility. During the past 15 years, downtown St. Petersburg has
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experienced a surge of development activity, creating a small downtown urban
environment consisting of waterfront parks, a university, numerous museums,
public entertainment facilities, retail outlets, office buildings, and hotels.
As noted earlier, the market also benefits from an extensive roadway system.
However, only a small base level of commercial and meeting demand is generated
by nearby offices, and a majority of the Hilton's occupancy is derived from
groups that originate outside of St. Petersburg. Although entertainment
facilities such as the Pier, the Bayfront Center, the Dali Museum, and the
Thunderdome attract some visitors to the downtown district, these sources of
diversion create minimal demand for overnight accommodations. Even when
particular events do generate hotel demand, most of these guests are
accommodated by the area's lower-priced lodging facilities. Although the
neighborhood's attractive surroundings and first-class image enhance the subject
property's reputation, the Hilton's high-quality facilities appear to be an
overimprovement for this market.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property's location can be analyzed on a number of levels. The area
immediately surrounding the hotel is St. Petersburg, which is situated in
Pinellas County, Florida. The primary economic market is the Tampa-St.
Petersburg-Clearwater Metropolitan Statistical Area (MSA), which includes the
Counties of Pinellas, Hillsborough, Pasco, and Hernando. Located about
mid-peninsula along Florida's west coast, the Tampa Bay area includes Tampa, St.
Petersburg, and Clearwater, three of Florida's fastest-growing cities. St.
Petersburg is situated approximately 18 miles south of Clearwater, which is also
located in Pinellas County, and 21 miles southwest of Tampa, which is located in
Hillsborough County. What is known as the Suncoast region includes the four
counties comprising the Tampa-St. Petersburg-Clearwater MSA, as well as Citrus
and Manatee Counties.
Pinellas is the most populous of the four counties in the MSA. Although its 280
square miles account for only 7% of the Suncoast land mass, the county is home
to more than one-third of the Suncoast residents. Pinellas County is located on
Florida's Gulf Coast, in the western portion of the Tampa Bay metropolitan area,
and borders Hillsborough County to the east, Pasco County to the north, and the
Gulf of Mexico to the west.
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[GRAPHIC OMITTED]
AREA MAP
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Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
Population
The State of Florida has sustained a population growth rate higher than that of
the nation as a whole. Between 1980 and 1995, the total statewide population
increased at an average annual compounded rate of 2.5%; a more moderate (but
still strong) growth rate of 1.8% was registered from 1990 to 1995. These
figures far outpace the annual national increases of 1.0% between 1980 and 1995
and 1.1% from 1990 through 1995. Florida's significant growth can be attributed
to an increase in the number of retirees who have moved to the area and the
relocation of younger individuals who are seeking the employment opportunities
and high standard of living that the state offers.
In terms of population, the Tampa-St. Petersburg-Clearwater MSA is the largest
in Florida, and is second only to Atlanta in the southeastern region. Population
is increasingly spreading into the suburbs, filling once-remote counties with
new homes and subdivisions. On a national scale, the MSA ranks 23rd in
population and 17th in number of households. The MSA sustained an average annual
compounded population growth rate of 1.2% between 1990 and 1995; during the same
period, Pinellas County registered an increase of only 0.5% annually. This
disparity reflects the overall stability of Pinellas County's residential base.
Pinellas is already the most densely populated county in Florida; between 1995
and the year 2000, population in Pinellas County is projected to increase at an
average annual compounded rate of 0.8%, which is only slightly lower than the
0.9% growth rate anticipated in the nation as a whole. The state and the MSA are
projected to achieve annual increases of 1.9% and 2.1%, respectively, outpacing
both Pinellas County and the nation.
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Historically, population increases were the major impetus to the state's
economic expansion; however, in recent years, business activity has surpassed
residential volume as the driving force behind continued development. The
Tampa-St. Petersburg-Clearwater MSA has been a strong participant in this trend;
the area, and Tampa in particular, has long been one of the state's primary
metropolitan centers and the location of a significant portion of Florida's
business and industry. We find that the rate of population growth generally
establishes a minimum rate of increase for commercial segment hotel demand; this
observation also holds true for the meeting and group segment if a majority of
the meetings are business-oriented.
Age Distribution
The age distribution of an area's population provides an indication of probable
spending patterns; food, beverage, and banquet patronage; and the propensity to
travel. A growing local population under the age of 20 is likely to yield
greater banquet business in the form of weddings, proms, award dinners, and
similar functions. Growth in the 20- to 39-year age group is likely to create
increased lounge patronage and demand for entertainment facilities. Individuals
aged 40 to 64 generally have the largest disposable incomes, and thus represent
potential restaurant and lounge patrons. The following table summarizes the age
distributions in Pinellas County and in the nation as a whole.
================================================================================
Table 4-1 Population Age Distribution
- --------------------------------------------------------------------------------
Pinellas County USA
------------------------------------- ------
Age Group 1980 1990 1995 2000 1995
------------------------------------------------------------------------
Under 20 21.5% 19.9% 20.0% 20.3% 28.8%
20 - 39 23.6 27.3 25.5 23.6 30.8
40 - 64 27.1 26.7 28.5 31.7 23.8
65 and Over 27.8 26.0 26.0 24.4 16.6
Median Age 45.8 42.0 43.0 43.9 34.3
Source: Woods & Poole Economics, Inc.
- --------------------------------------------------------------------------------
The preceding table shows that Pinellas County, which is known as a retirement
community, has a greater percentage of individuals aged 40 and over than the
nation as a whole. As working-age people move to the area to fill jobs in the
county's growing corporate and high-technology manufacturing community, the
percentage of individuals under the age of 65 is expected to
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increase slightly and the percentage of residents 65 and over is expected to
decrease.
St. Petersburg has been a favorite retirement area since an 1880s American
Medical Association journal declared the city an exceptionally healthy place to
live. While Tampa (in Hillsborough County) has evolved into a multicultural,
diverse business center, St. Petersburg (and Pinellas County in general) has
remained a retirement haven. However, development has been sweeping through the
region throughout since the 1980s, and new and expanding firms are attracting
younger workers to St. Petersburg; the city now has the youngest population in
Pinellas County, with a 1995 median age of 38.6 (as compared to 43.0 in the
county as a whole).
Retail Sales
Trends in retail sales reflect both changes in population and the propensity of
area inhabitants and visitors to spend money on retail goods. Like population
trends, retail sales have no direct correlation with hotel room night demand,
but they do tend to gauge the economic health and vitality of the market.
Between 1980 and 1995, retail sales in Pinellas County increased at an average
annual compounded rate of 3.1%; the MSA and the state registered annual
increases of 3.5% and 3.6%, respectively, during the same period. All three of
these growth rates are significantly higher than that registered by the nation
(at 1.9%). This data underscores the economic strength of the state as a whole.
Between 1990 and 1995, retail sales in the state and the MSA rose at average
annual compounded rates of 3.3% and 2.7%, respectively, which exceeded the
annual national average of 2.5%. During the same period, Pinellas County
registered an annual increase lower than the national rate (at 2.0%). A
substantial amount of tourism contributed to the retail sales gains exhibited by
both the MSA and the state.
Forecasts for 1995 through the year 2000 indicate continued growth in retail
sales in the MSA and the state, at average annual compounded rates of 1.8% and
1.9%, respectively. These levels are higher than the 0.8% annual gain
anticipated for Pinellas County alone, and the 0.9% annual gain anticipated for
the nation as a whole.
Personal Income
Personal income is similar to disposable income, and is defined as gross income
available after taxes for the purchase of goods and services (i.e., available
spending money). Personal income gauges the economic health of the local
population and reflects market quality and the general ability to buy.
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Per-capita personal income levels in Pinellas County are significantly higher
than national levels. This relationship suggests that residents of the St.
Petersburg area enjoy an advantage over typical Americans in terms of the amount
of money available to spend on retail goods and services. This increased
spending ability contributes to a favorable environment for local commercial
establishments, and restaurants in particular. It should be noted, however, that
personal income does not take into account cost-of-living factors; as a result,
it is possible for local residents to have higher income levels without enjoying
greater affluence if the cost of necessities is greater than it is in other
parts of the nation. However, according to third-quarter 1995 data assembled by
the American Chamber of Commerce Researchers Association, the Tampa Bay
metropolitan area had a cost of living index of 95.0, lower than the national
average of 100.0.
Work Force Characteristics
The Tampa-St. Petersburg-Clearwater MSA was one of the regions that derived the
greatest benefit from the Sunbelt phenomenon of the late 1970s and the 1980s.
Economic activity in the area increased dramatically during that era, and total
employment in the MSA rose at an average annual compounded rate of 3.6% between
1980 and 1995. Between 1990 and 1995, total employment increased by 2.2%
annually, indicating that growth has slowed since the 1980s.
From 1980 to 1995, the strongest employment gain was registered in the services
sector, which increased at an average annual compounded rate of 6.3%. The
dominance of this sector mirrors trends in the national economy, although the
magnitude of the gains were extraordinary. Strong growth was also apparent in
the agricultural services and trade sectors, which recorded average annual
compounded growth rates of 3.9% and 3.2%, respectively.
The slower growth rates recorded in the early 1990s are largely attributable to
the national recession; however, the inherent strength of the market and area's
desirability as a business location are reflected in the fact that most major
employment sectors continued to expand during this period, albeit at a more
moderate pace. Employment in the service sector increased at an average annual
compounded rate of 4.4% between 1990 and 1995. Construction employment, which
suffered significant declines on a national level, increased at an average
annual compounded rate of 0.5% during these years. Total employment increased at
an average annual compounded rate of 2.2%, and the only sectors of the MSA
economy that
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reported declines during the five-year period were Mining and Federal Military
employment.
Projections for the balance of the decade anticipate moderate growth rates in
all sectors of the economy. Total employment in the MSA is projected to increase
at an average annual compounded rate of 2.0% between 1995 and the year 2000,
which is slightly lower than the 2.2% average annual compounded increase
experienced between 1990 and 1995.
Manufacturing
It is significant to note that the MSA's manufacturing employment sector
sustained a 1.3% average annual compounded growth rate between 1980 and 1995,
and remained relatively stable between 1990 and 1995 despite the recession.
These growth rates stand in dramatic contrast to national trends, which have
exhibited a steady decline in manufacturing employment during the past two
decades. Furthermore, manufacturing employment in the Tampa-St.
Petersburg-Clearwater MSA is expected to continue to increase at an average
annual compounded rate of 1.5% throughout the remainder of the decade.
According to surveys by Dun & Bradstreet and the Florida Department of Labor and
Employment Security, the six-county Suncoast area surrounding Tampa Bay boasts
more than 6,000 manufacturers employing some 125,000 individuals. Pinellas
County is the second-largest manufacturing center in Florida, with a
concentration of high-technology and biomedical products companies. During the
past three decades, the county has built a strong manufacturing base consisting
of 1,284 firms employing approximately 48,500 people. The county's 107 medical
companies have witnessed dramatic increases in the number of new jobs in recent
years.
Major Employers
Pinellas County also has its share of corporate headquarters. Some of the larger
hometown companies include Danka Industries, Jack Eckerd Drugs, Florida
Progress, Jabil Circuit, Raymond James Financial, and Tech Data. Overall, the
major employers in Pinellas County represent a cross section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in government,
educational, medical, and financial services. The following table outlines the
largest employers in Pinellas County.
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Table 4-2 Major Employers in Pinellas County
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Number of
Company Product/Type Employees
- --------------------------------------------------------------------------------
Pinellas County School Board Public Education 15,497
Home Shopping Network Merchandising 5,000
City of St. Petersburg City Government 3,859
Jack Eckerd Corp. Drug, Other Retail 3,375
Morton Plant Hospital Hospital 3,215
Pinellas County Government County Government 3,157
Times Publishing Newspaper 3,000
Florida Progress Electric Utility Holding Co. 3,000
Bayfront Medical Center Hospital 2,300
All Children's Hospital Hospital 1,857
E-Systems Defense, Electronic Systems 1,700
City of Clearwater City Government 1,601
Raymond James Financial Financial Services 1,600
Mease Hospital Hospital 1,500
Honeywell Space Systems Group Aerospace, Avionics 1,450
Tech Data Computer Products Co. Computer Retail 1,200
AT&T Paradyne Data Communications 1,000
Essilor of America Plastic Lens (Optical) 1,000
Val-Pak Coupon Manufacturing 847
Better Business Forms Business Forms 673
Lockheed Martin R & D of Electric Products 620
Linvatec Orthopedic Arthroscopy Equipment 580
Danka Automated Office Equipment 525
Source: Tampa Bay Book of Lists, 1996
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Economic Development
The Tampa Bay area as a whole has evolved into the legal, commercial, financial,
and service center of Florida's west coast. The area is home to the operations,
affiliates, and subsidiaries of more than 187 Fortune 500 firms. Pinellas
County, and St. Petersburg in particular, evolved into a residential suburb of
the more commercial areas of Tampa and is a popular retirement community. During
the past 20 years, Pinellas County has undergone strong commercial growth as
suburban office parks and, to a lesser extent, downtown neighborhoods have
become the focus of development. Originally, much of this commercial
construction involved light manufacturing industries such as electronics,
medical products, and defense-related high technology. In the 1980s, the area
became home to numerous small businesses and the back-office components of
larger firms located in Tampa.
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The most recent trend has been toward the service industry. In 1994 (the most
recent year for which data is available), 8,654 new businesses were formed in
Pinellas County. Of these new businesses, approximately 25.2% are classified as
business and financial services and 20.8% are categorized as residential
services.
The commercial growth of Pinellas County has outpaced that of Hillsborough
County, which recorded 7,275 new business formations in 1994. The 15,929 new
businesses created in the two counties comprised 19.2% of the statewide total in
that year; as a whole, the four-county metro area leads Florida in both
employment and new business formations. Roughly 65% of total employment in 1995
in the Tampa Bay metropolitan area was white-collar, including
professional/managerial (at 29.0%), administrative support (at 16.9%), sales (at
13.0%), and technical (at 6.5%). Blue-collar workers comprised 35% of the total;
these employees are categorized as service workers (at 17.1%), craft/precision
production/repair (at 8.4%), and operatives or laborers (at 9.1%). Pinellas
County's unemployment rate decreased from 5.2% in 1994 to 4.6% in 1995; the
unemployment rate in Hillsborough County also decreased, from 5.4% in 1994 to
5.1% in 1995.
The Tampa Bay MSA is Florida's second-largest financial market, and Pinellas
County leads the MSA in terms of banking, with almost 300 bank and thrift
offices and deposits topping $13 billion. With approximately the same size
population as neighboring Hillsborough County, Pinellas accounts for $4.7
billion more in bank and thrift deposits. Downtown St. Petersburg has become
known as the financial center of Pinellas County. Many of the major area banks
have their headquarters here, and the city is home to three national financial
companies: William R. Hough & Co.; Franklin Templeton Fund, a worldwide mutual
fund company; and Raymond James and Associates, a national full-service
securities brokerage. In addition, Republic Bank recently relocated its
corporate offices to downtown St. Petersburg, Northern Trust Bank chose the city
for its first Tampa Bay branch, and NationsBank moved two lending divisions and
approximately 200 new jobs into its downtown St. Petersburg building.
Office Space
Hillsborough County remains the dominant commercial core of the MSA in terms of
the concentration of office space and major employers. According to Tampa Bay's
Maddux Report (July, 1996), Hillsborough County contains approximately
20,670,000 square feet of multi-tenant office space. The county's largest
sub-market is Westshore, with approximately 9,260,000 square feet of
multi-tenant office space, followed by downtown Tampa,
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with roundly 6,380,000. Overall, Hillsborough County reported a 15.8% office
vacancy rate as of the end of the second quarter of 1996. During that quarter,
the Hillsborough multi-tenant office market absorbed an estimated 60,975 square
feet of space.
With approximately 8,980,000 square feet, Pinellas County houses the
second-largest concentration of multi-tenant office space in the MSA. The county
reported a vacancy rate of 14.2% at the end of the second quarter of 1996,
reflecting a drop of 3.6 points from the period in 1995. During the same
quarter, total net absorption in Pinellas County was 71,220 square feet,
bringing the total to 367,130 square feet absorbed during the 12 months ended in
June of 1996.
Downtown St. Petersburg is the third-largest concentration of office space in
Pinellas County (after Clearwater/Bayside and Gateway/Mid-Pinellas), with a
total of approximately 1,960,000 square feet. This sub-market also has the
weakest office occupancy, and it registered a vacancy rate of 19.9% at the end
of the second quarter of 1996. The downtown market is estimated to have absorbed
15,380 square feet of office space during that quarter.
Airports
At the center of the six-county Suncoast region is Tampa International Airport,
which is perennially ranked by Conde Nast and the Airline Passenger Association
as one of the top three airports in the world. The airport is designed so that
walking distances are short. A central building, called the Landside Terminal,
offers ticketing, baggage claim, parking, and shopping. Automated shuttles take
passengers from the terminal to their planes at one of six airsides arranged
like spokes of a wheel. In 1995, the airport added its sixth airside terminal
(Airside A) in a $110,000,000 construction project; this new airside added 15
gates. The airport's 23 scheduled airline carriers offer more than 300 flights
daily. In 1995, air passenger traffic totaled 11,396,130, 5.5% of which entailed
international travel. We also note that more than 157,000,000 pounds of freight
moved through the airport in 1995.
A few miles across Tampa Bay is the 2,000-acre St. Petersburg-Clearwater
International Airport, in central Pinellas County. A $4,500,000 renovation of
this facility was completed recently, and two new parking lots were added in
1996. The airport serves a growing charter business, and, with its own Free
Trade Zone, also has a thriving freight service, where UPS and other major
express companies do brisk business. More than 20,000,000 pounds of air cargo
moved through this airport in 1995. Scheduled commercial
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carriers include ATA, Canadian, Canada 3000, and SunJet International, and
charter service is available from USAir, Royal Air, Air Transat, and Nations
Air. The following table summarizes airport activity in the subject property's
market area in 1995.
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Table 4-3 1995 Airport Activity
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Tampa St.Petersburg-Clearwater
Type of Traffic International Airport International Airport
- --------------------------------------------------------------------------------
Passenger Traffic
Domestic 10,772,392 878,805
International 623,738 207,246
Total 11,396,130 1,086,051
Aircraft Operations
Air Carrier,
Domestic & International,
Taxi, General, and Military 262,580 188,077
Cargo (in Tons) 157,124,331 25,560,000
Mail (in Tons) 93,597,810 Not available
Runways (Length in Feet)
Runway 1 11,000 8,500
Runway 2 8,300 5,165
Runway 3 7,000 5,000
Parking Spaces (1996) 12,000 1,100
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Convention Facilities
A number of convention facilities are located throughout the Tampa Bay region.
The Tampa Bay Convention Center, which is located in the downtown district
overlooking the Hillsborough River, includes 200,000 square feet of exhibit
space and features a 36,000-square-foot ballroom and 42,000 square feet of
meeting facilities. The convention center has a total of 22 meeting rooms with
seating capacities ranging from 40 to 1,000 people. Parking for 450 cars is
located under the building, and an additional 5,000 parking spaces are available
within a four-block area. The Florida State Fairgrounds, located six miles from
downtown Tampa, provides versatile facilities for year-round use. The exposition
hall has 93,000 square feet of floor space, with a seating capacity of 12,500 or
space for 322 exhibits or concessions. The air-conditioned structure has a
45-foot ceiling, enabling it to be used for circuses and sporting events, as
well as trade shows. The 325-acre complex also provides numerous other
exhibition buildings and
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entertainment centers, campsites with restrooms and showers, and parking for
16,500 cars.
Convention facilities in downtown St. Petersburg include the Thunderdome, the
Bayfront Center, and the Coliseum Ballroom. The Thunderdome (which is currently
closed for renovation) contains 152,000 square feet of unobstructed floor space
and an additional 22,000 square feet of meeting space. On-site parking is
available for 4,250 cars. The Bayfront Center's 8,400-seat arena and 2,000-seat
auditorium provide space for Broadway shows, ice shows, circuses, concerts,
conventions, exhibitions, and trade shows. The historic Coliseum Ballroom, which
is located off of I-375 in downtown St. Petersburg, features the largest wooden
dance floor in the southeastern United States, and can seat approximately 2,000
people.
Leisure Travel
By virtue of its miles of white beaches, favorable weather, and various
attractions, the Tampa Bay area is among the nation's most popular vacation
destinations. Visitors often divide their vacation time in Tampa with trips to
Orlando, and to Disney World in particular.
In Pinellas County, the gulf beaches generate strong tourist activity,
especially during the winter months. In 1995, more than 4,000,000 people visited
Pinellas County, and visitor expenditures were estimated at over $2 billion.
These figures reflect increases of 3.2% and 3.7%, respectively, over 1994
levels.
Tourist Attractions
As stated previously, the Pinellas County beachfront along the Gulf of Mexico is
the major tourist attraction in the Tampa Bay area. Popular island resort towns,
which are connected to the mainland by causeways, include St. Petersburg Beach,
Treasure Island, Indian Rocks Beach, Madeira Beach, North Redington Beach, and
Clearwater Beach.
In addition to beaches, the St. Petersburg area features a number of
attractions, including 102 city parks on 2,400 acres, including a seven-mile
preserved downtown waterfront; the 47-mile Pinellas Trail, which is the longest
urban trail in the eastern United States, is available for hiking and bicycling;
two municipal golf courses, including the Mangrove Municipal Golf Course, which
is rated among the top 50 courses in the country; and a number of entertainment
facilities and cultural attractions. Attractions in the downtown area include
the Thunderdome, the Bayfront Center and Mahaffey Theatre, the Pier, Al Lang
Stadium, five renowned museums, and
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dozens of galleries and shops located within a cultural district known as the
Quarter.
St. Petersburg is also host to many popular sporting events that draw visitors
to the area, including St. Anthony's Triathlon, one of the top triathlon events
in the nation (held in April of each year), and the Kash n' Karry Florida Grand
Prix of St. Petersburg, a February week-end event featuring the Sports Car Club
of America Trans-Am Championship 100-mile race. In total, it is estimated that
St. Petersburg has more than 400 events a year that draw in excess of 6,000,000
visitors annually.
Conclusion
Our review of the available economic and demographic data indicates that the
local economy experienced consistent growth during the early to mid-1980s, which
slowed in the latter part of the decade; however, the area was not as severely
affected by the recession as some other parts of the United States. Projections
indicate that economic expansion is likely to continue, and although we do not
anticipate dramatic increases in lodging demand, some gains are expected.
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus may not calculate exactly.
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Table 4- Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Pinellas County 1980-1995 733.1 874.7 1.2%
Tampa-St. Petersburg-Clearwater MSA 1980-1995 1,627.5 2,204.7 2.0
State of Florida 1980-1995 9,841.1 14,230.4 2.5
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Pinellas County 1990-1995 855.1 874.7 0.5
Tampa-St. Petersburg-Clearwater MSA 1990-1995 2,075.6 2,204.7 1.2
State of Florida 1990-1995 13,019.1 14,230.4 1.8
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Pinellas County 1995-2000 874.7 912.0 0.8
Tampa-St. Petersburg-Clearwater MSA 1995-2000 2,204.7 2,443.5 2.1
State of Florida 1995-2000 14,230.4 15,606.5 1.9
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Pinellas County 1980-1995 4,930.9 7,741.1 3.1
Tampa-St. Petersburg-Clearwater MSA 1980-1995 10,392.6 17,322.2 3.5
State of Florida 1980-1995 66,181.6 113,048.9 3.6
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Pinellas County 1990-1995 7,001.0 7,741.1 2.0
Tampa-St. Petersburg-Clearwater MSA 1990-1995 15,151.5 17,322.2 2.7
State of Florida 1990-1995 96,339.3 113,048.9 3.3
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Pinellas County 1995-2000 7,741.1 8,071.9 0.8
Tampa-St. Petersburg-Clearwater MSA 1995-2000 17,322.2 18,979.8 1.8
State of Florida 1995-2000 113,048.9 123,900.1 1.9
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales per Capita
Pinellas County 1980-1995 6,725.6 8,850.5 1.8
Tampa-St. Petersburg-Clearwater MSA 1980-1995 6,385.6 7,857.0 1.4
State of Florida 1980-1995 6,725.0 7,944.2 1.1
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales per Capita
Pinellas County 1990-1995 8,187.4 8,850.5 1.6
Tampa-St. Petersburg-Clearwater MSA 1990-1995 7,299.8 7,857.0 1.5
State of Florida 1990-1995 7,399.9 7,944.2 1.4
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Retail Sales per Capita
Pinellas County 1995-2000 8,850.5 8,850.4 (0.0)%
Tampa-St. Petersburg-Clearwater MSA 1995-2000 7,857.0 7,767.5 (0.2)
State of Florida 1995-2000 7,944.2 7,939.0 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
Pinellas County 1980-1995 538.4 732.5 2.1
Tampa-St. Petersburg-Clearwater MSA 1980-1995 1,054.7 1,631.0 2.9
State of Florida 1980-1995 6,553.9 11,648.0 3.9
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
Pinellas County 1990-1995 684.4 732.5 1.4
Tampa-St. Petersburg-Clearwater MSA 1990-1995 1,476.1 1,631.0 2.0
State of Florida 1990-1995 10,065.3 11,648.0 3.0
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Pinellas County 1995-2000 732.5 770.5 1.0
Tampa-St. Petersburg-Clearwater MSA 1995-2000 1,631.0 1,811.7 2.1
State of Florida 1995-2000 11,648.0 13,142.8 2.4
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales per Capita
Pinellas County 1980-1995 734.3 837.5 0.9
Tampa-St. Petersburg-Clearwater MSA 1980-1995 648.1 739.8 0.9
State of Florida 1980-1995 666.0 818.5 1.4
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales per Capita
Pinellas County 1990-1995 800.4 837.5 0.9
Tampa-St. Petersburg-Clearwater MSA 1990-1995 711.2 739.8 0.8
State of Florida 1990-1995 773.1 818.5 1.1
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking Place Sales per Capita
Pinellas County 1995-2000 837.5 844.8 0.2
Tampa-St. Petersburg-Clearwater MSA 1995-2000 739.8 741.4 0.0
State of Florida 1995-2000 818.5 842.1 0.6
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Pinellas County 1980-1995 11,222.5 16,438.4 2.6
Tampa-St. Petersburg-Clearwater MSA 1980-1995 21,770.0 36,722.8 3.5
State of Florida 1980-1995 135,546.7 242,033.9 3.9
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income (+000,000)
Pinellas County 1990-1995 15,252.5 16,438.4 1.5%
Tampa-St. Petersburg-Clearwater MSA 1990-1995 32,454.9 36,722.8 2.5
State of Florida 1990-1995 212,884.6 242,033.9 2.6
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Pinellas County 1995-2000 16,438.4 19,146.5 3.1
Tampa-St. Petersburg-Clearwater MSA 1995-2000 36,722.8 44,292.7 3.8
State of Florida 1995-2000 242,033.9 286,366.1 3.4
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Pinellas County 1980-1995 15,307.0 18,794.0 1.4
Tampa-St. Petersburg-Clearwater MSA 1980-1995 13,376.0 16,657.0 1.5
State of Florida 1980-1995 13,773.0 17,008.0 1.4
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Pinellas County 1990-1995 17,837.0 18,794.0 1.1
Tampa-St. Petersburg-Clearwater MSA 1990-1995 15,637.0 16,657.0 1.3
State of Florida 1990-1995 16,352.0 17,008.0 0.8
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Pinellas County 1995-2000 18,794.0 20,993.0 2.2
Tampa-St. Petersburg-Clearwater MSA 1995-2000 16,657.0 18,127.0 1.7
State of Florida 1995-2000 17,008.0 18,349.0 1.5
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment -
Tampa-St. Petersburg-Clearwater MSA (+000)
Farming 1980-1995 10.3 12.9 1.5
Agricultural Services 1980-1995 9.1 16.1 3.9
Mining 1980-1995 1.2 1.1 (0.5)
Construction 1980-1995 51.9 68.0 1.8
Manufacturing 1980-1995 79.0 96.0 1.3
Transportation, Communications, & Public Utilities 1980-1995 35.5 52.8 2.7
Total Trade 1980-1995 178.8 288.0 3.2
Wholesale 1980-1995 40.6 62.9 3.0
Retail 1980-1995 138.2 225.1 3.3
Finance, Insurance, & Real Estate 1980-1995 77.6 102.5 1.9
Services 1980-1995 176.4 438.7 6.3
Total Government 1980-1995 95.0 138.7 2.6
Federal Civilian 1980-1995 13.0 19.1 2.6
Federal Military 1980-1995 11.2 12.5 0.7
State & Local 1980-1995 70.8 107.1 2.8
Total 1980-1995 714.8 1,214.8 3.6
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 44
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment -
Tampa-St. Petersburg-Clearwater MSA (+000)
Farming 1990-1995 11.6 12.9 2.1%
Agricultural Services 1990-1995 14.1 16.1 2.7
Mining 1990-1995 1.5 1.1 (6.5)
Construction 1990-1995 66.3 68.0 0.5
Manufacturing 1990-1995 95.4 96.0 0.1
Transportation, Communications, & Public Utilities 1990-1995 47.6 52.8 2.1
Total Trade 1990-1995 271.7 288.0 1.2
Wholesale 1990-1995 58.0 62.9 1.7
Retail 1990-1995 213.8 225.1 1.0
Finance, Insurance, & Real Estate 1990-1995 99.6 102.5 0.6
Services 1990-1995 352.9 438.7 4.4
Total Government 1990-1995 130.8 138.7 1.2
Federal Civilian 1990-1995 18.4 19.1 0.8
Federal Military 1990-1995 14.0 12.5 (2.3)
State & Local 1990-1995 98.4 107.1 1.7
Total 1990-1995 1,091.6 1,214.8 2.2
Projected Employment -
Tampa-St. Petersburg-Clearwater MSA (+000)
Farming 1995-2000 12.9 13.7 1.2
Agricultural Services 1995-2000 16.1 16.8 0.9
Mining 1995-2000 1.1 1.2 1.4
Construction 1995-2000 68.0 71.1 0.9
Manufacturing 1995-2000 96.0 103.6 1.5
Transportation, Communications, & Public Utilities 1995-2000 52.8 56.3 1.3
Total Trade 1995-2000 288.0 315.2 1.8
Wholesale 1995-2000 62.9 67.0 1.3
Retail 1995-2000 225.1 248.2 2.0
Finance, Insurance, & Real Estate 1995-2000 102.5 111.6 1.7
Services 1995-2000 438.7 507.2 2.9
Total Government 1995-2000 138.7 143.5 0.7
Federal Civilian 1995-2000 19.1 20.3 1.2
Federal Military 1995-2000 12.5 12.6 0.2
State & Local 1995-2000 107.1 110.6 0.6
Total 1995-2000 1,214.8 1,340.3 2.0
</TABLE>
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In later sections of this economic study and appraisal, we will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect changes in room night demand in the subject
property's area.
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5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
Year 1990 1991 1992 1993 1994 1995
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Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in
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1994 and 1995. During the low-volume years, many sellers remained on the
sidelines waiting for values to increase before placing their properties on the
market. The jump in 1994 is attributable to a number of factors, including the
greater availability of mortgage funds, a return of institutional investors to
the market, and a resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and
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early 1980s as a result of strong occupancies (70%'s) coupled with a high
monetary inflation rate (14%). In recent years, room rate growth slowed as a
result of low occupancies and a drop in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
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Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 4.8 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
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This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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Valuation Index Per Room
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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Annual Percent Change
<TABLE>
<CAPTION>
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
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is a good indication that hotel values will return to record levels in the
next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors in the downtown St. Petersburg and
mid-Pinellas County areas. Although the subject property also competes with
Pinellas County beachfront hotels and properties located in the Tampa/Westshore
(Hillsborough County) area to some degree, the Hilton operates in a distinct
market that demonstrates its own supply and demand trends. This historical
supply and demand information is presented in the following table, along with
the marketwide occupancy, average rate, and rooms revenue per available room
(RevPAR). RevPAR is calculated by multiplying occupancy by average rate, and
provides an indication of how well rooms revenue is being maximized.
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Table 6-1 Historical Supply and Demand Trends (STR)
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<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 735 846 846 906 1,206 1,206 1,206
Annual Guestroom Supply 268,113 308,790 308,790 330,750 440,190 440,190 440,190
Percent Change -- 15.2% 0.0% 7.1% 33.1% 0.0% 0.0%
Room Night Demand 166,975 192,262 193,093 199,301 266,448 301,732 309,769
Percent Change -- 15.1% 0.4% 3.2% 33.7% 13.2% 2.7%
Occupancy 62.3% 62.3% 62.5% 60.3% 60.5% 68.5% 70.4%
Percent Change -- (0.0)% 0.4% (3.6)% 0.5% 13.2% 2.7%
Average Rate $57.46 $59.41 $60.48 $61.98 $75.31 $76.21 $80.51
Percent Change -- 3.4% 1.8% 2.5% 21.5% 1.2% 5.6%
RevPAR $35.79 $36.99 $37.82 $37.34 $45.59 $52.24 $56.65
Percent Change -- 3.4% 2.2% (1.3)% 22.1% 14.6% 8.4%
</TABLE>
Year to Date
------------------- Avg. Annual
Comp. Change,
1995 1996 1989-95
- ----------------------------------------------------------------
Number of Rooms 1,206 1,206
Annual Guestroom Supply 293,058 293,058
Percent Change -- 0.0% 8.6%
Room Night Demand 217,866 217,814
Percent Change -- (0.0)% 10.8%
Occupancy 74.3% 74.3%
Percent Change -- (0.0)% 2.1%
Average Rate $82.47 $89.51
Percent Change -- 8.5% 5.8%
RevPAR $61.31 $66.53
Percent Change -- 8.5% 8.0%
Note: The 149-unit Courtyard by Marriott opened in October of 1989, and
the 360-unit Renaissance Vinoy Hotel reopened in November of 1992
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
The STR table demonstrates the growth in the market's guestroom supply since
1989. In that year, there were 735 rooms (including those of the subject
property) that competed for first-class and mid-rate travelers in the downtown
St. Petersburg and mid-Pinellas County areas. The full impact of the Courtyard
by Marriott, which opened in October of 1989 in mid-Pinellas County, was felt in
1990, when the market had 846 rooms open for the entire year; the additional 111
rooms in 1990 represents a 15.2% increase in supply from the previous year.
There were no further increases in 1991, but the November, 1992 reopening of the
Renaissance (Stouffers) Vinoy in downtown St. Petersburg effectively increased
the supply by another 60 rooms, bringing the total to 906. In 1993, when the
360-room Renaissance Vinoy was operational for the full year, the supply rose to
1,206. Overall, the market registered a dramatic 64% increase in guestroom
supply between 1989 and 1993. Since 1993, the guestroom count has remained
stable at 1,206. Between 1989 and 1995, overall guestroom supply in this market
increased at an average annual compounded growth rate of 8.6%.
As indicated by the STR data, demand has grown in every year, increasing from
166,975 in 1989 to 309,769 in 1995. This represents a total gain of 85.5%, and
an average annual compounded growth rate of 10.8%. In 1990, demand rose by
15.1%, nearly offsetting the 15.2% increase in supply; this pattern suggests
that there had been some unaccommodated demand in the market prior to the
opening of the Courtyard. Despite the deepening national recession and Persian
Gulf Crisis in the early 1990s, which caused a reduction in all forms of travel,
hotel demand in this market continued to increase at a modest rate of 0.4% in
1991 and a more rapid rate of 3.2% in 1992. In 1993, demand jumped by 33.7%,
more than offsetting the 33.1% increase in supply. This again implies that the
opening of the Vinoy enabled the market to accommodate demand that it could not
handle previously; we also believe that this hotel was successful in inducing
additional meeting and group demand into the market. Spurred by the economic
recovery, demand continued to grow at 13.2% and 2.7%, respectively, in 1994 and
1995. The subject property's acceptance of a lodging contract with Delta
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Airlines was a key component of the growth experienced in 1994. Year-to-date
August figures indicate little change in demand from 1995 to 1996.
Because demand growth outpaced supply increases during the historical period,
the marketwide occupancy increased from 62.3% in 1989 to 70.4% in 1995, yielding
an average annual compounded growth rate of 2.1%. As the STR table illustrates,
occupancy increased by a modest 0.4% from 1989 to 1991. When the Renaissance
Vinoy opened in November of 1992, growth in demand failed to keep pace with the
gain in supply, and occupancy declined by 3.6% (to 60.3%). A recovery began in
1993, and although supply continued to increase (reflecting the first full year
of operation at the Vinoy), demand growth occurred at a faster pace. In 1994 and
1995, when the number of available guestrooms remained stable, occupancy
increases paralleled hotel demand growth, increasing by 13.2% in 1994 (to reach
68.5%) and by 2.7% in 1995 (to reach 70.4%). As noted earlier, year-to-date
August statistics indicate that both supply and demand have essentially
stabilized, indicating that occupancy probably has as well.
Marketwide average rate rose consistently from 1989 through 1995. Following the
opening of the high-rated Renaissance Vinoy in November of 1992, average rate
jumped by 21.5% in 1993. As occupancy increased in 1994 and 1995, average rate
continued to grow, by 1.2% and 5.6%, respectively. Year-to-date figures indicate
a strong 8.5% increase from 1995 to 1996. Overall, average rate rose at an
average annual compounded rate of 5.8% between 1989 and 1995.
Our analysis of the STR data indicates a healthy trend in the local lodging
market from 1989 to 1995. Despite a 64% increase in supply, occupancy and
average rate rose at overall average annual compounded rates of 2.1% and 5.8%,
respectively. Except in 1992, when a 2.5% rate gain failed to offset the 3.6%
decline in occupancy, RevPAR also rose in each year. In total, RevPAR grew at an
average annual compounded rate of 8.0% from 1989 to 1995. We note, however, that
this overall trend is skewed somewhat by the influence of the high-rated
Renaissance Vinoy.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
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Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the subject
property's competitive market is generated primarily by the following four
market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Segment 4 Airline/Contract
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the year-end 1996 distribution of accommodated hotel room
night demand as follows.
================================================================================
Table 6-2 Estimated Year-End 1996 Accommodated Room Night Demand
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Marketwide Subject Property
----------------------- ------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 72,000 19% 13,000 16%
Meeting and Group 265,000 71 48,000 58
Leisure 29,000 8 13,000 16
Airline/Contract 8,000 2 8,000 10
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Total 374,000 100% 82,000 100%
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Meeting and group demand predominates in the subject property's competitive
market, accounting for an estimated 71% of the year-end 1996 room night demand.
Because the room counts of the competitive hotels in the Pinellas County
beachfront and Tampa/Westshore areas have been weighted to reflect the fact that
these properties compete with the Hilton only in the meeting and group segment,
the percentage of marketwide meeting and group demand is notably high.
Commercial demand follows the meeting and group segment with an estimated 19%
share of the room night demand, while leisure travelers contribute 8%. The
overall market derives an estimated 2% of its occupancy from the
airline/contract segment,
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which reflects the Delta contract demand accommodated by the subject property.
Our analysis does not consider the airline demand that is accommodated by some
of the properties in the Tampa/Westshore market; this demand primarily consists
of crews that are on short layovers, and must be accommodated by hotels that are
located within a ten-minute drive of the airport.
Like the market as a whole, the subject property derives a majority of its room
night demand from the meeting and group segment, at an estimated 58% as of
year-end 1996. Because of the limited amount of commercial demand available in
downtown St. Petersburg, the Hilton has targeted the meeting and group segment
as its primary source of business. Given the hotel's extensive function space
and the flexibility of these facilities in terms of size and configuration, the
subject property is physically well suited to serve this market.
Approximately 16% of the Hilton's occupancy is generated by commercial guests,
versus 19% in the market as a whole; hotels that compete with the subject
property in this segment (including the Renaissance Vinoy, the Heritage Holiday
Inn, and the mid-Pinellas County hotels) tend to derive higher percentages of
their room night demand from commercial guests. We note that an estimated 16% of
the subject property's occupancy consists of leisure travelers, which is twice
the marketwide level. Only two hotels compete with the subject property to any
significant extent in this segment: the Renaissance Vinoy and the Heritage
Holiday Inn. Although the Renaissance Vinoy's percentage of leisure travelers is
lower than that of the subject property, the Heritage Holiday Inn's is higher.
An estimated 10% of the Hilton's year-end 1996 occupancy can be attributed to
airline/contract demand. Using the distribution of accommodated hotel demand as
a starting point, we will analyze the characteristics of each market segment in
an effort to determine future trends in room night demand.
Commercial Segment
The commercial segment consists of individual businesspeople and government
employees. This type of demand is strongest Monday through Thursday nights,
declines significantly on Friday and Saturday, and increases somewhat on Sunday.
The typical length of stay ranges from one to three days, and the rate of double
occupancy is a low 1.2 to 1.3 people per room. Commercial demand is relatively
constant throughout the year, although some declines are noticeable in late
December and during other holiday periods.
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In general, commercial travelers are not overly rate-sensitive, and they often
make use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
In the market surrounding the St. Petersburg Hilton, most commercial demand is
generated by firms and business parks in Tampa or in mid-Pinellas County (the
area situated off I-275, north of the subject property), and by companies
operating in downtown St. Petersburg. Most of the area's commercial demand
generators are located in office and industrial developments that are within a
15-mile radius of the Hilton. Business travelers who are passing through the
area en route to other destinations also contribute some commercial room nights;
these guests may stop at local lodging facilities because they provide a
convenient resting point.
Management representatives at the subject property report that the hotel derives
a majority of its commercial demand from companies located in downtown St.
Petersburg, including First American Real Estate, Capital Marketing, Florida
Power Corporation, and Olin Ordinance (a government contracting services
company). As underscored by the relatively small percentage of commercial guests
accommodated by the subject property, commercial demand in downtown St.
Petersburg is considerably weaker than in the northern regions of Pinellas
County and across the bay, in Tampa.
In conjunction with the recent trend of slower growth in the local economy,
commercial demand increases have become more moderate since the 1980s. As the
national economy improves and prominent local businesses increase their
production and employment levels, commercial hotel demand is expected to rebound
quickly. We project that commercial demand will increase by 2.0% in 1997 before
stabilizing at a growth rate of 1.5% annually in subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends.
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Commercial groups tend to have a low double occupancy of 1.3 to 1.5 people per
room, while social groups are likely to have double occupancy rates ranging from
1.5 to 1.9.
A large percentage of the meeting and group demand in the local lodging market
is generated by groups that are not based in the immediate area. Most of this
demand is regional in nature, with a large representation of Florida-based
associations and corporations. Management representatives indicate that a
significant portion of the subject property's meeting and group demand is
generated by state associations headquartered in Tallahassee, which is located
approximately 210 miles northwest of St. Petersburg (and serves as the state
capital). The Hilton reportedly competes with a number of hotels in St.
Petersburg, Clearwater, and Tampa for groups that wish to meet in the Tampa Bay
metropolitan area.
Because the Hilton's location is inferior to those of resort-style hotels
situated on the beachfront, the hotel offers rates that are typically lower than
those available at many of the beachfront lodging facilities. Consequently, the
Hilton generally serves the most rate-sensitive portion of the meeting and group
market, including a considerable number of SMERF (social, military, educational,
religious, and fraternal) organizations; management representatives indicate
that SMERF groups comprise approximately 80% of the Hilton's meeting and group
business.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
Growth in business-related meeting and group demand is closely related to growth
in the commercial segment. Non-commercial meeting and group demand, on the other
hand, is tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus growth
in this segment tends to lag slightly behind increases in commercial or leisure
demand.
Historically, meeting and group demand in the subject property's competitive
market is estimated to have increased slower than overall hotel
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demand in the area (which rose at an average annual compounded rate of 10.8%
between 1989 and 1995). We believe that the arrival of the Tampa Bay Devil Rays
in 1998 will generate a significant amount of meeting and group demand in the
form of baseball teams and officials. In light of this information and the
relevant economic and demographic trends, we estimate that meeting and group
demand in the subject property's market area will increase by 1.0% in 1997 and
by 2.0% in 1998 before stabilizing at 1.0% annually throughout the remainder of
the projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. In the area surrounding the subject
property, leisure demand is primarily generated by the Pinellas County beaches.
When compared to its beachfront competitors, the Hilton is at a clear
disadvantage as a result of its downtown location. This is particularly true in
the leisure market segment, as Florida's prevalent image among leisure travelers
is tied to the oceanfront and beaches. Although the Hilton is situated near
several tourist attractions in downtown St. Petersburg (including the
Thunderdome, Al Lang Stadium, the Pier, the Bayfront Center, and a number of
museums and exhibits), these sources of diversion create minimal demand for
overnight accommodations. Management representatives report that although nearby
attractions generate some demand for the subject property, a majority of the
leisure patronage accommodated by the hotel consists of overflow demand during
periods when the beachfront hotels are fully occupied.
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Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections.
In October of 1996, the Thunderdome closed for a $70,000,000 renovation that
will entail a reconfiguration and expansion of the public areas, making the
stadium more suitable for baseball play. In 1998, the Thunderdome will reopen as
Tropicana Field, in time to host a round of the NCAA basketball championships.
The Tampa Bay Devil Rays will begin play at the stadium at the start of the 1998
baseball season. In 1999, the stadium will host the final four of the NCAA
basketball championships. In light of these events and economic and demographic
trends in the market area, we project leisure demand to decline by 5% in 1997,
followed by increases of 8% in 1998, 3% in 1999, and 2% annually thereafter.
Airline Segment
Airline demand is generated by flight crews and delayed passengers. The airlines
typically contract rooms in nearby lodging facilities for extended periods to
ensure the availability of accommodations. Because they are able to guarantee a
specific level of usage on a daily basis, airlines can usually negotiate deeply
discounted room rates. This type of demand is advantageous because it provides a
base level of occupancy over a long period that normally includes weekends and
slow seasons. The occupancy benefit is offset by low contract room rates, which
have an adverse impact on average rate. Skilled hotel operators use airline
patronage to fill in during periods of low occupancy, and quickly displace this
demand when higher-rated market segments offer better potential.
In January of 1994, the subject property entered into a contract with Delta
Airlines to accommodate some of the crews scheduled to remain in the area
overnight. The hotel must also provide transportation to and from the airport
for each crew. The low rate and the expense associated with transportation
effectively limits the profit potential of this segment; however, the revenue
generated by these room nights enables the hotel to achieve greater economies of
scale (particularly with respect to staffing levels) and thus operate more
efficiently. Some food and beverage revenue is also generated by these guests.
In 1994, airline contract demand approximated 20,300 room nights, at an average
rate of $31.73. In 1995, demand declined to roundly 14,300 rooms on
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an annual basis, at an average rate of $31.46. Management representatives
indicate that Delta contract demand has continued to decrease in 1996;
year-to-date September, 1996 figures indicate that approximately 6,800 contract
room nights were accommodated, which represents a 40.1% drop from the same
period in 1995.
The subject property's contract with Delta Airlines terminates at the end of
October of 1996, but management representatives report that the hotel is likely
to continue its contract business with Delta on a month-by-month basis.
Management also reports that a contract is being finalized with British Airways;
this agreement will commence in January of 1997, and is estimated to generate
approximately 3,000 room nights on an annual basis. In consideration of this
factor, we anticipate airline/contract demand to increase by 25% in 1997. As the
Hilton begins to accommodate increased demand from higher-rated segments (and
leisure travelers in particular), we project its contract demand to drop by 30%
annually in 1998 and 1999, and then remain stable.
Growth Rates
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, four segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Commercial 2.0% 1.5% 1.5% 1.5% 1.5%
Meeting and Group 1.0 2.0 1.0 1.0 1.0
Leisure (5.0) 8.0 3.0 2.0 2.0
Airline/Contract 25.0 (30.0) (30.0) 0.0 0.0
Overall Annual Growth 1.3% 1.5% 0.7% 1.2% 1.2%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
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COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. Our survey indicates that two hotels
in the downtown St. Petersburg market offer the facilities and amenities
necessary to compete with the St. Petersburg Bayfront Hilton . These primary
competitors and the subject property form the downtown district's first-class
hotel supply. Including the subject property, these primary competitors total
764 rooms.
A number of more distant hotels are considered secondarily competitive with the
Hilton; although the facilities, rate structures, or market orientations of
these hotels prevent their inclusion among the primarily competitive supply,
they do compete with the subject property to some extent. These secondary
competitors have been grouped by location (the Pinellas County beachfront area,
mid-Pinellas County, and the Tampa/Westshore area) and are considered in the
aggregate. The room counts of these hotels have been weighted to reflect the
degree to which each group competes with the St. Petersburg Hilton. The
aggregate weighted room count of the secondary competitors is 719.
The following table summarizes the important operating characteristics of the
competitive properties. This information was compiled from personal interviews,
inspections, lodging directories, and our in-house library of operating data. As
noted earlier, rooms revenue per available room (RevPAR) is calculated by
multiplying a property's occupancy by its average rate, and serves to gauge how
well a hotel is maximizing its rooms revenue. Penetration is the ratio between
the subject property's operating results and the corresponding data for the
market. If the penetration factor is greater than 100%, the subject property is
performing better than the market as a whole; conversely, if the penetration is
less than 100%, the hotel is performing at a level below the marketwide average.
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Table 6-4 Competitive Lodging Facilities
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
----------------------------------- ---------------------------------
No. of Mtg. & Average
Property/Location Rooms Comm. Group Leisure Airline Occ. Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
333 First Street South 333 16% 58% 16% 10% 69.8% $60.80 $42.45
Renaissance Vinoy
501 5th Avenue Northeast 360 30 60 10 0 64.0 136.00 87.04
Heritage Holiday Inn
234 3rd Avenue North 71 50 10 40 0 65.0 62.00 40.30
Beachfront Hotels 274 0 100 0 0 75.0 99.00 74.25
Tampa/Westshore Hotels 335 0 100 0 0 65.0 102.00 66.30
Mid-Pinellas Hotels 110 75 25 0 0 77.0 59.00 45.43
- ------------------------------------------------------------------------------------------------------------------
Totals and Averages -- 19% 71% 8% 2% 68.6% $94.28 $64.66
<CAPTION>
Estimated 1996
---------------------------------------------------------
Average Occupancy Yield
Property/Location Occ. Rate RevPAR Penetration Penetration
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
333 First Street South 68.0% $67.00 $45.56 98.4% 65.2%
Renaissance Vinoy
501 5th Avenue Northeast 69.0 138.00 95.22 99.9 136.2
Heritage Holiday Inn
234 3rd Avenue North 63.0 63.00 39.69 91.2 56.8
Beachfront Hotels 71.0 108.00 76.68 102.8 109.7
Tampa/Westshore Hotels 67.0 111.00 74.37 97.0 106.4
Mid-Pinellas Hotels 78.0 64.00 49.92 112.9 71.4
- --------------------------------------------------------------------------------------
Totals and Averages 69.1% $101.22 $69.92
</TABLE>
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<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the subject property's competitive market shows a wide
representation of hotel types. Overall, the market demand has a meeting and
group orientation; we estimate this segment's year-end 1996 contribution at 71%
of the overall occupancy, followed by the commercial segment (at 19%), leisure
travelers (at 8%), and airline/contract demand (at 2%).
We estimate the year-end 1996 occupancy and average rate of the competitors at
69.1% and $101.22, yielding RevPAR of $69.92. The Hilton's estimated occupancy
of 68.0% is slightly lower than the marketwide average. The mid-Pinellas County
hotels lead the market (at an estimated occupancy of 78.0%), followed by the
Pinellas County beachfront hotels (at 71.0%). Among the primary competitors,
occupancy estimates range from 63.0% at the Heritage Holiday Inn to 69.0% at the
Renaissance Vinoy. The subject property's estimated 1996 average rate of $67.00
is considerably lower than the marketwide level of $101.22. We note the
competitive market includes a number of lodging facilities with substantially
higher rate structures, such as the Renaissance Vinoy and the hotels in the
Pinellas County beachfront and Tampa/Westshore areas. In terms of RevPAR, the
Renaissance Vinoy is the top performer, with an estimated 1996 level of $95.22,
and the Heritage Holiday Inn achieves the lowest RevPAR (estimated at $39.69 in
1996). The subject property's estimated RevPAR of $45.56 is the second-lowest in
the market. We have evaluated the competitive supply, and descriptions of our
findings are presented below.
Heritage Holiday Inn
The Heritage Holiday Inn is located in a residential area northwest of the
subject property. The three-story building opened as a boarding house known as
the Martha Washington, and is similar to an inn in terms of style. The hotel
became affiliated with Holiday Inns in 1993. In addition to 71 guestrooms,
facilities include a 3,148-square-foot ballroom that can be divided into three
components. Food and beverage service is provided by an adjacent restaurant that
is operated under a lease agreement. We estimate this property's year-end 1996
market mix at 50% commercial travelers, 40% leisure, and 10% meeting and group.
This hotel's year-end 1996 occupancy and average rate are estimated at 63% and
$63.
Renaissance Vinoy Hotel
The Vinoy is an historic property that was constructed in the 1920s. The hotel
closed in 1974, and reopened as the Stouffer Vinoy in mid-1992, following a
renovation. In May of 1995, Renaissance Hotels International purchased the
Stouffer Hotel Company, and the hotel is now known as the Renaissance Vinoy. The
hotel sits amid eight miles of city-owned park land that fronts Tampa Bay, north
of the subject property. The $92,000,000
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renovation project included extensive restoration of the Vinoy Hotel to its
original condition and the addition of an adjacent wing housing guestrooms and
other facilities. The Vinoy consists of 258 original rooms in the main building,
102 guestrooms in the new wing, four restaurants, one lounge, and approximately
21,780 square feet of meeting space. Recreational amenities include a 14-court
tennis complex, a 5,000-square-foot health facility, a 74-slip marina, two
croquet courts, two heated outdoor pools, and access to an 18-hole golf course
that the hotel operates on a site approximately 1.6 miles away.
The new Vinoy Hotel was intended to operate as a luxury resort, and thus was not
expected to be directly competitive with the Hilton. However, the property
achieved only limited success in this segment during its first years of
operation, largely as a result of its downtown location, lack of beach access,
and distance from the golf course. The absence of a strong corporate market in
St. Petersburg has also contributed to this failure. Although the Vinoy has
succeeded in capturing a majority of the area's high-end corporate demand
(including both individuals and groups), this segment has proven insufficient to
support the 360-room hotel. As a result of these circumstances, the Vinoy's
current market orientation renders it primarily competitive with the Hilton.
Given the Vinoy's superior facilities, the hotel has been extremely effective in
attracting meeting and group demand, which is estimated to contribute 60% of its
occupancy. Commercial guests comprise another 30%, and the remaining 10% of the
hotel's demand is generated by leisure travelers. We estimate the year-end 1996
occupancy and average rate of the Renaissance Vinoy at 69% and $138.
Pinellas County Beachfront Hotels
The Pinellas County beachfront hotels are included among the competitive supply
by virtue of their relative proximity to the subject property and the fairly
extensive amount of meeting space available at each facility. Because they are
situated directly on the Gulf of Mexico and feature a resort atmosphere, these
properties typically attract high-rated commercial and meeting and group
travelers who prefer to conduct business in a beachfront location. Nonetheless,
these hotels do offer lower rates during off-peak periods, and thus compete with
the Hilton for a defined component of the meeting and group segment.
The St. Petersburg beachfront hotels that are considered competitive with the
Hilton include the Don Ce Sar (275 rooms), the Tradewinds (577
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rooms), and the Radisson Sandpiper (159); the Clearwater beachfront hotels are
the Sheraton Sand Key (390 rooms) and the Doubletree Surfside Resort (428
rooms). These hotels compete with the subject property only in the meeting and
group demand segment, and their total room count has been weighted to reflect an
overall competitiveness of 15%. We estimate the year-end 1996 occupancy and
average rate of the beachfront properties at 71% and $108.
Tampa/Westshore Hotels
Like the beachfront properties, the Tampa/Westshore hotels compete with the
Hilton only in the meeting and group segment; however, these hotels also enjoy a
strong level of commercial demand as a result of their proximity to office space
concentrations and Tampa International Airport. Although these properties
attract a number of corporate groups that originate in Tampa, the Hilton
competes for those organizations that may choose between Tampa and other
destinations based on accommodations and rate rather than location. For the most
part, the Hilton competes with the Tampa/Westshore hotels during slow periods
when commercial activity is limited (such as weekends) and for lower-rated
business generated by state associations and government groups. Like the subject
property, these lodging facilities have limited recreational amenities and must
compete by offering lower rates during off-peak occupancy periods.
The Tampa/Westshore hotels that are considered competitive with the Hilton are
the Wyndham Harbor Island (300 rooms), the Crowne Plaza Westshore (272 rooms),
the Hyatt Westshore (445 rooms), and the Sheraton Grand Hotel (324 rooms). As a
group, these lodging facilities are considered 25% competitive with the subject
property. We estimate the year-end 1996 occupancy and average rate of the
Tampa/Westshore hotels at 67% and $111.
Mid-Pinellas County Hotels
The mid-Pinellas County hotels compete with the Hilton as a result of their
proximity to Tampa and the region's international airport. Perhaps more
importantly, these properties are located near a concentration of commercial
demand generators, and are among the newest lodging facilities available in
Pinellas County. Until the mid-1980s, there were no hotels on Ulmerton Road, and
travelers seeking accommodations in this market generally used lodging
facilities located along U.S. 19, which was once the primary multiple-access,
north/south route serving Pinellas County. With the construction of Interstate
275, which created a bypass around U.S. 19, Ulmerton Road became the newest area
of hotel development. Although these properties were constructed during a period
of commercial expansion
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in Pinellas County, the new supply located on Ulmerton Road near the I-275
intersection is believed to have exceeded demand in the immediate area. As a
result, new demand that has become available and much of the existing demand
that was previously accommodated by older, unaffiliated hotels in Pinellas
County has been absorbed by the mid-Pinellas County (Ulmerton Road) hotels.
Overall, the new hotel development on Ulmerton Road has had an unfavorable
impact on the subject property's ability to attract commercial guests.
The competitive mid-Pinellas County hotels are the Courtyard by Marriott (149
rooms), the Holiday Inn (174 rooms), and the Hampton Inn (118 rooms). These
properties are all affiliated with lodging chains that enjoy strong national
reputations and reservation systems; in consideration of these attributes and
the caliber of the physical facilities, we judge these hotels to be 25%
competitive with the Hilton. All of these properties derive a majority of their
occupancy from commercial travelers. The Holiday Inn, which offers approximately
5,000 square feet of meeting space, also competes with the subject property in
the meeting and group segment. Overall, this competitive group is estimated to
derive 75% of its occupancy from commercial demand and 25% from the meeting and
group segment. We estimate the year-end 1996 occupancy and average rate of the
mid-Pinellas County hotels at 78% and $64.
Proposed Cometitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have not identified any properties that are proposed or under
development in the St. Petersburg area that are likely to compete with the
Hilton directly.
CONCLUSION
Smith Travel Research data indicates growth in the subject property's
competitive market from 1989 through August of 1996. Despite increases in the
guestroom supply, occupancy and average rate rose at average annual compounded
levels of 2.1% and 5.8%, respectively, between 1989 and 1995. Year-to-date
August, 1996 figures suggest that although occupancy remained fairly stable from
1995 to 1996, average rate continued to increase.
We identified four market segments that generate lodging demand in the subject
property's competitive market. Growth rates for each market segment were
projected based on an analysis of the economic and demographic trends that have
a significantly influence on lodging demand. In
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general, demand is anticipated to increase moderately throughout the projection
period.
Two properties in downtown St. Petersburg compete with the subject property
directly. We also identified a number of more distant hotels that are considered
secondarily competitive with the Hilton; these secondary competitors have been
grouped by location, and are considered in the aggregate. Overall, the subject
property's estimated year-end 1996 occupancy and average rate are lower than
those of the market as a whole.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding marketwide data (as provided by Smith Travel Research). In
addition to the annual percent change calculations, we have determined the
subject property's occupancy, average rate, and RevPAR penetration factors.
================================================================================
Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year to Date
--------------------
1991 1992 1993 1994 1995 1995 1996
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property
Occupancy 57.2% 50.8% 53.3% 70.0% 69.8% 72.9% 71.0%
Percent Change -- (11.2)% 4.9% 31.3% (0.3)% -- (2.7)%
Occupancy Penetration 91.5% 84.3% 88.1% 102.1% 99.2% 98.1% 95.5%
Average Rate $66.50 $68.44 $69.11 $61.00 $60.80 $62.80 $69.13
Percent Change -- 2.9% 1.0% (11.7)% (0.3)% -- 10.1%
Average Rate Penetration 110.0% 110.4% 91.8% 80.0% 75.5% 76.1% 77.2%
RevPAR $38.04 $34.77 $36.84 $42.70 $42.44 $45.81 $49.08
Percent Change -- (8.6)% 5.9% 15.9% (0.6)% -- 7.1%
RevPAR Penetration 100.6% 93.1% 80.8% 81.7% 74.9% 74.7% 73.8%
Areawide (STR)
Occupancy 62.5% 60.3% 60.5% 68.5% 70.4% 74.3% 74.3%
Percent Change -- (3.6)% 0.5% 13.2% 2.7% -- (0.0)%
Average Rate $60.48 $61.98 $75.31 $76.21 $80.51 $82.47 $89.51
Percent Change -- 2.5% 21.5% 1.2% 5.6% -- 8.5%
RevPAR $37.82 $37.34 $45.59 $52.24 $56.65 $61.31 $66.53
Percent Change -- (1.3)% 22.1% 14.6% 8.4% -- 8.5%
</TABLE>
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As illustrated by the previous table, the subject property's occupancy rose from
57.2% in 1991 to 69.8% in 1995. There was a dramatic 11.2% drop in 1992, and the
hotel registered an occupancy of only 50.8% in that year; we note that although
the marketwide level also declined, that decrease was only 3.6%. We believe that
the Hilton's poor 1992 performance can be attributed to the compounded effects
of the national recession and the opening of the Stouffer's (Renaissance) Vinoy
Hotel in downtown St. Petersburg. The Vinoy property now accommodates many of
the high-end commercial travelers who formerly used the Hilton. As a result of
this lower occupancy, the subject property's RevPAR decreased by 8.6% in 1992,
resulting in a RevPAR penetration of only 93.1%.
Occupancy at the Hilton rebounded by 4.9% in 1993 (as opposed to the marketwide
gain of 0.5%), as the hotel's marketing staff succeeded in replacing some of the
lost commercial business with meeting and group demand; the addition of the
executive conference center and several smaller meeting rooms reportedly aided
these efforts. The opening of the high-rated Vinoy Hotel in November of 1992 led
to a 21.5% increase in the marketwide average rate in 1993 (the property's first
full year of operation). The subject property's average rate increased by only
1.0% in that year, causing the hotel's RevPAR penetration to drop again, to
80.8%.
In 1994, the subject property's occupancy rose by a full 31.3%, largely as a
result of the Delta Airlines contract, which contributed an estimated 20,000
room nights in that year. The market also maintained a strong 13.2% occupancy
gain in 1994. Because of its volume of low-rated Delta contract business, the
Hilton's average rate decreased by 11.7%, dropping from $69.11 in 1993 to $61.00
in 1994. Conversely, the market registered a slight 1.2% increase. As occupancy
rose and average rate fell, the subject property's RevPAR penetration increased
slightly, to 81.7% in 1994.
In 1995, both occupancy and average rate decreased by 0.3% at the Hilton, while
the market as a whole achieve an occupancy gain of 2.7% and an average rate
increase of 5.6%. Year-to-date August figures show another occupancy decrease of
2.7% at the Hilton from 1995 to 1996. However, by virtue of a 10.1% gain in
average rate, the subject property's year-to-date RevPAR rose by 7.1% from 1995
to 1996. Marketwide data for the same year-to-date period show a similar trend
of relatively stable occupancy coupled with rising average rates.
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A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy in 1995 and 1996; we note that the figures for the last
several months of 1996 represent estimates.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1995 1996 Percent
Occupancy Occupancy Change
-------------------------------------------
December 53.0% 46.4% (12.5)%
January 69.8 76.1 9.0
February 87.5 86.7 (0.9)
March 89.9 85.5 (4.9)
April 81.7 78.3 (4.1)
May 70.8 66.3 (6.4)
June 67.4 60.0 (10.9)
July 64.1 63.2 (1.4)
August 53.8 52.8 (2.0)
September 61.3 60.6 (1.2)
October 79.0 81.2 2.8
November 61.1 63.1 3.2
-------------------------------------------
Full Year 69.8% 68.2% (2.3)%
- --------------------------------------------------------------------------------
The subject property's occupancy tends to peak in the late winter and spring.
October is also a strong month as a result of increased meeting and group
demand. The lowest occupancies typically occur in December and August, when they
average between 45% and 55%.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent management team to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365). The total annual number
of room nights occupied in
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the competitive hotels equates to the market's accommodated room night demand,
as shown in the following table.
================================================================================
Table 7-3 Estimated Year-End 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
------------------------ -----------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 72,000 19% 13,000 16%
Meeting and Group 265,000 71 48,000 58
Leisure 29,000 8 13,000 16
Airline/Contract 8,000 2 8,000 10
- --------------------------------------------------------------------------------
Total 374,000 100% 82,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. Based
on our fieldwork and analysis, we do not believe that there is any significant
amount of latent demand in the subject property's market.
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market. As noted above, our analysis does not consider any latent demand.
Accommodated demand is expected to increase in each year of the projection
period. Although leisure demand is expected to decline by 5.0% in 1997
(reflecting the closing of the Thunderdome, which is a major attraction in St.
Petersburg), anticipated growth in the other three segments should more than
offset this decrease, allowing a 1.3% gain in overall demand. Likewise, the
anticipated drop in airline/contract room nights in 1998 and 1999 is projected
to be accompanied by increases in the commercial, meeting and group, and leisure
segments, allowing overall demand growth of 1.5% in 1998 and 0.7% in 1999. In
subsequent years, total accommodated room night demand is projected to increase
at a moderate rate of 1.2%
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annually. The following table outlines the projected annual change in
accommodated room night demand in the subject property's competitive market.
================================================================================
Table 7-4 Total Usable Room Night Demand
<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- 2.0% 1.5% 1.5% 1.5% 1.5%
Accommodated Demand 72,079 73,521 74,624 75,743 76,879 78,032
Meeting and Group
Growth Rate -- 1.0% 2.0% 1.0% 1.0% 1.0%
Accommodated Demand 264,737 267,384 272,732 275,459 278,214 280,996
Leisure
Growth Rate -- (5.0)% 8.0% 3.0% 2.0% 2.0%
Accommodated Demand 28,817 27,376 29,566 30,453 31,062 31,683
Airline/Contract
Growth Rate -- 25.0% (30.0)% (30.0)% 0.0% 0.0%
Accommodated Demand 8,271 10,339 7,237 5,066 5,066 5,066
Totals
Commercial 72,079 73,521 74,624 75,743 76,879 78,032
Meeting and Group 264,737 267,384 272,732 275,459 278,214 280,996
Leisure 28,817 27,376 29,566 30,453 31,062 31,683
Airline/Contract 8,271 10,339 7,237 5,066 5,066 5,066
- -------------------------------------------------------------------------------------------------------
TOTAL DEMAND 373,904 378,620 384,159 386,721 391,221 395,777
Annual Demand Growth -- 1.3% 1.5% 0.7% 1.2% 1.2%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 1,483
guestrooms. As noted earlier, we anticipate no further additions to the market.
The following table shows the projected competitive supply of available rooms
and available room nights. To calculate the annual number of available room
nights, the number of available rooms is multiplied by 365.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 84
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International
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================================================================================
Table 7-5 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
------------------------------------------------------
Historical 373,904 541,295 69%
1997 378,620 541,295 70
1998 384,159 541,295 71
1999 386,721 541,295 71
2000 391,221 541,295 72
2001 395,777 541,295 73
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
As indicated by the table above, the overall occupancy of the competitive hotels
is expected to increase steadily, from an estimated level of 69% as of year-end
1996 to 73% in 2001. This reflects the slow growth in room night demand and the
lack of any additional supply entering the market.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline/ contract), or the
number of room nights actually accommodated per year, per room, per market
segment. For example, if a hotel has a commercial competitive index of 190, each
room in the property is occupied 190 times a year by a commercial traveler. The
competitive index is calculated by dividing a hotel's annual accommodated room
night demand in a particular market segment by that property's room count.
Competitive indexes will be used to illustrate each property's position in the
market based on its ability to compete with other local lodging facilities.
Commercial Segment
The estimated year-end 1996 commercial segment competitive indexes in the
subject property's market range from 40 to 214. The mid-Pinellas County hotels
are the most competitive properties in this segment as a result of their
proximity to a number of the area's primary commercial demand generators. The
Heritage Holiday Inn occupies the second position with an index of 115, which is
largely attributable to its chain affiliation and small size (which limits its
reliance on group demand). The subject property's low index of 40 reflects the
limited commercial activity in its immediate neighborhood and the hotel's
reliance on meeting and group demand. The beachfront and Tampa/Westshore hotels
do not compete with the Hilton in this market segment. We expect no changes in
the relative market
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 85
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HVS
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International
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positions of the competitive hotels during the projection period, as illustrated
by the following table.
================================================================================
Table 7-6 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 40 40 40 40 40 40
Renaissance Vinoy 76 76 76 76 76 76
Heritage Holiday Inn 115 115 115 115 115 115
Beachfront Hotels 0 0 0 0 0 0
Tampa/Westshore Hotels 0 0 0 0 0 0
Mid-Pinellas Hotels 214 214 214 214 214 214
- --------------------------------------------------------------------------------
Meeting and Group Segment
The selected beachfront hotels and the Tampa/Westshore lodging facilities lead
the market in the meeting and group segment, with estimated 1996 indexes of 259
and 245, respectively. Beginning in 1998 (when the Thunderdome facility
reopens), the subject property is expected to exhibit an improvement in its
competitive position in this segment, and its index is projected to increase
from 144 to 150. Because it is the hotel closest to the Thunderdome, the Hilton
is expected to accommodate a majority of the meeting and group demand generated
by baseball-related groups. We anticipate the meeting and group segment
competitive indexes of the other hotels to remain unchanged throughout the
projection period. The following table illustrates the competitive indexes in
the meeting and group segment.
================================================================================
Table 7-7 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 144 144 150 150 150 150
Renaissance Vinoy 151 151 151 151 151 151
Heritage Holiday Inn 23 23 23 23 23 23
Beachfront Hotels 259 259 259 259 259 259
Tampa/Westshore Hotels 245 245 245 245 245 245
Mid-Pinellas Hotels 71 71 71 71 71 71
- --------------------------------------------------------------------------------
Leisure Segment
The subject property competes with the Renaissance Vinoy and the Heritage
Holiday Inn in the leisure market. The Heritage Holiday Inn is the most
successful hotel in the leisure segment, with an estimated 1996 competitive
index of 92, followed by the subject property (with an index of 40).
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 86
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We do not project any changes in the competitive indexes of these three hotels
during the projection period, as illustrated by the following table.
================================================================================
Table 7-8 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 40 40 40 40 40 40
Renaissance Vinoy 25 25 25 25 25 25
Heritage Holiday Inn 92 92 92 92 92 92
Beachfront Hotels 0 0 0 0 0 0
Tampa/Westshore Hotels 0 0 0 0 0 0
Mid-Pinellas Hotels 0 0 0 0 0 0
- --------------------------------------------------------------------------------
Airline Segment
As a hotel's occupancy improves, its reliance on airline demand generally
diminishes. Because this segment commands deeply discounted rates, operators
prefer to accommodate more lucrative types of demand whenever possible.
The subject property is the only hotel in the competitive set that participates
in the airline/contract segment. Although the total demand generated by this
segment is expected to decline in 1998 and 1999, the subject property's
competitive position will remain unchanged.
================================================================================
Table 7-9 Airline Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 25 25 25 25 25 25
Renaissance Vinoy 0 0 0 0 0 0
Heritage Holiday Inn 0 0 0 0 0 0
Beachfront Hotels 0 0 0 0 0 0
Tampa/Westshore Hotels 0 0 0 0 0 0
Mid-Pinellas Hotels 0 0 0 0 0 0
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 87
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International
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number of room nights captured by the property's total number of available room
nights. Multiplying the subject property's projected market share by the
estimated room night demand in each segment results in the following estimate of
room nights captured by the hotel.
================================================================================
Table 7-10 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Commercial
Demand 73,521 74,624 75,743 76,879 78,032
Market Share 0.1840 0.1840 0.1840 0.1840 0.1840
- --------------------------------------------------------------------------------
Capture 13,529 13,732 13,938 14,147 14,359
Meeting and Group
Demand 267,384 272,732 275,459 278,214 280,996
Market Share 0.1811 0.1872 0.1872 0.1872 0.1872
- --------------------------------------------------------------------------------
Capture 48,421 51,062 51,572 52,088 52,609
Leisure
Demand 27,376 29,566 30,453 31,062 31,683
Market Share 0.4617 0.4617 0.4617 0.4617 0.4617
- --------------------------------------------------------------------------------
Capture 12,639 13,650 14,059 14,340 14,627
Airline/Contract
Demand 10,339 7,237 5,066 5,066 5,066
Market Share 1.0000 1.0000 1.0000 1.0000 1.0000
- --------------------------------------------------------------------------------
Capture 10,339 7,237 5,066 5,066 5,066
Total Capture 84,928 85,680 84,635 85,641 86,661
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 333 x 365) produces the
projected occupancy percentage.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 88
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HVS
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International
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================================================================================
Table 7-11 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Room Nights Captured 84,928 85,681 84,635 85,641 86,661
Available Room Nights 121,545 121,545 121,545 121,545 121,545
Occupancy 69.87% 70.49% 69.63% 70.46% 71.30%
Rounded 70% 70% 70% 70% 71%
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
================================================================================
Table 7-12 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
-------------------------------
1997 70%
1998 70
Stabilized 70
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 71% occupancy in 2001, we have chosen to use a stabilized level of 70%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 89
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Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate in 1995 and 1996. Once again, we note that figures for the last several
months of 1996 represent estimates rather than actual data.
================================================================================
Table 7-13 Subject Property's Occupancy and Average Rate by Month
- --------------------------------------------------------------------------------
1995 1996
------------------- -------------------------------------
Average Percent Average Percent
Occupancy Rate Occupancy Change Rate Change
- --------------------------------------------------------------------------------
December 53.0% $58.08 46.4% (12.5)% $59.05 1.7%
January 69.8 61.33 76.1 9.0 71.67 16.9
February 87.5 72.78 86.7 (0.9) 82.57 13.5
March 89.9 78.27 85.5 (4.9) 81.69 4.4
April 81.7 67.28 78.3 (4.1) 70.87 5.3
May 70.8 61.15 66.3 (6.4) 67.25 10.0
June 67.4 52.57 60.0 (10.9) 57.63 9.6
July 64.1 45.73 63.2 (1.4) 56.33 23.2
August 53.8 52.71 52.8 (2.0) 56.66 7.5
September 61.3 51.13 60.6 (1.2) 60.41 18.1
October 79.0 56.01 81.2 2.8 65.45 16.9
November 61.1 59.84 63.1 3.2 67.75 13.2
- --------------------------------------------------------------------------------
The previous table underscores the correlation between a hotel's occupancy and
its average rate: as occupancy increases, rates tend to follow. On a monthly
basis, the St. Petersburg Bayfront Hilton achieves its highest average rate
during February and March, when the hotel's occupancy reaches 85% to 90%.
In 1996, as management began to replace airline/contract demand with meeting and
group business, average rate has increased (particularly during the autumn
months). There was also a 23.2% jump in average rate in July of 1996 (which is
typically the month in which rates are lowest), and this occurred without a
large sacrifice in occupancy (which declined by only 1.4% during the same
month).
Competitive Positioning
The average rate of the St. Petersburg Bayfront Hilton will be projected using a
competitive positioning method. This technique begins with an analysis of the
average rates achieved by the subject property and its competitors. These rates
establish a range that reflects certain characteristics of the specific market,
such as price sensitivity, demand orientation, and occupancy. The subject
property's average rate is then compared to those of the
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 90
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hotels to which it is most similar in terms of size, quality, facilities,
amenities, market orientation, location, management, image, and affiliation.
Adjustments are made to reflect any relevant differences.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by RevPAR, which reflects a property's
ability to maximize rooms revenue. The following table summarizes the estimated
year-end 1996 average rate and RevPAR of the subject property and its
competitors.
================================================================================
Table 7-14 Estimated Year-End 1996 Average Rate and RevPAR Levels
- --------------------------------------------------------------------------------
Property Average Rate RevPAR
-----------------------------------------------------------
Subject Property $67.00 $45.56
Renaissance Vinoy 138.00 95.22
Heritage Holiday Inn 63.00 39.69
Beachfront Hotels 108.00 76.68
Tampa/Westshore Hotels 111.00 74.37
Mid-Pinellas Hotels 64.00 49.92
-----------------------------------------------------------
Average $101.22 $69.92
- --------------------------------------------------------------------------------
The competitive market includes a wide range of property types, ranging from the
luxury-class Renaissance Vinoy to two limited- service hotels located in the
mid-Pinellas County region (the Courtyard and Hampton Inn). The subject
property's average rate is lower than those registered by the beachfront and
Tampa/Westshore hotels, which are located in areas better suited to capture
high-end leisure and meeting and group demand, and by the Renaissance Vinoy,
which has far superior facilities. The estimated year-end 1996 average rate of
the Hilton is slightly higher than those of the Heritage Holiday Inn and the
mid-Pinellas County hotels, which are generally smaller and offer fewer
facilities and amenities. Given the hotel's advantages and disadvantages
relative to its competitors, the subject property's estimated year-end 1996
average rate of $67.00 appears appropriate, and it has been used as a basis for
projecting changes during the next few years.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 91
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Average Rate Increase
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Between 1990 and 1993, the Hilton's average rate growth was hindered by a
variety of factors, including the national recession, the property's physical
condition, and a decline in market demand. In 1994, average rate dropped by
roughly 12% as the hotel began to accommodate demand generated by
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and
Average Rate 92
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HVS
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International
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the Delta Airlines contract. This contract was accepted because it provided a
base level of occupancy. Year-to-date 1996 figures indicates a 10.1% rate gain
from 1995 to 1996, which is commensurate with marketwide increases and reflects
the hotel's reduced reliance on airline/contract business. Based on these
considerations, we forecast the following average rates.
================================================================================
Table 7-15 Average Rate Forecast
- --------------------------------------------------------------------------------
Marketwide Subject Property
---------------------- -------------------------
Rate Rate Projected
Year Occupancy Increase Increase Average Rate
- --------------------------------------------------------------------------------
Positioned Base -- -- -- $67.00
1997 70% 3% to 4% 4.0% 69.69
1998 71 4 to 5 5.0 73.17
1999 71 3 to 4 4.0 76.10
2000 72 3 to 4 3.5 78.76
2001 73 3 to 4 3.5 81.52
- --------------------------------------------------------------------------------
The subject property is expected to benefit from a variety of circumstances that
are likely to have a favorable impact on average rate in upcoming years,
including the introduction of baseball-related group business in 1998 and
anticipated increases in leisure demand throughout the market area. In
consideration of the sporting events that are to occur within the subject
property's immediate vicinity (including the NCAA games and Tampa Bay Devil Ray
games at the Thunderdome), we projected the average rate of the Hilton to
increase by 4.0% in from 1996 to 1997, 5.0% from 1997 to 1998, and 4.0% from
1998 to 1999 before stabilizing at the underlying monetary inflation rate of
3.5% annually. The following occupancy levels and average rates will be used to
project the subject property's rooms revenue.
================================================================================
Table 7-16 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
------------------------------------
1997 70% $69.69
1998 70 73.17
Stabilized 70 76.10
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Highest and Best Use 93
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved
property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
<PAGE>
HVS International, Mineola, New York Highest and Best Use 94
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be to hold for future development. Based on the fact that the
value of the land does not exceed the value of the hotel plus the cost of
demolition, it is our further opinion that the subject property's highest and
best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 95
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
<PAGE>
HVS International, Mineola, New York Approaches to Value 96
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
<PAGE>
HVS International, Mineola, New York Approaches to Value 97
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 98
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HVS
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================================================================================
10. Income Capitalization Approach
- --------------------------------------------------------------------------------
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 99
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HVS
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the St. Petersburg Bayfront Hilton is an existing hotel with an
established operating performance, its historical income and expense experience
can serve as a basis for projections. The subject property opened in 1971, and
achieved occupancy levels of 69.8% in 1995 and 71.0% through August of 1996. The
following income and expense statements were provided by Ashford Financial, and
are unaudited. The first table shows the operating statements for years 1995 and
estimated year-end 1996. The second compares year-to-date August data for 1995
and 1996. As a result of the change in ownership that occurred in 1994, complete
operating statements for years prior to 1995 are not available. Where
applicable, we have reorganized the statements in accordance with the Uniform
System of Accounts for Hotels.
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Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 Estimated Year-End 1996
----------------------------------------- ---------------------------------------------
No. of Rooms: 333 333
No. of Occupied Rooms: 84,867 83,218
No. of Complimentary Rooms: 2,847 0
No. of Days Open: 365 366
Occupancy: 69.8% Amount per Amount per 68.3% Amount per Amount per
Average Rate: $60.80 Percent Available Occupied $67.43 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,160 66.9% $15,496 $60.80 $5,612 68.5% $16,851 $67.43
Food 1,682 21.8 5,050 19.81 1,773 21.6 5,325 21.31
Beverage 503 6.5 1,510 5.93 547 6.7 1,644 6.58
Telephone 237 3.1 711 2.79 131 1.6 394 1.58
Net Rental & Other Income 137 1.8 410 13.95 129 1.6 386 1.55
Total 7,718 100.1 23,177 90.94 8,192 100.0 24,601 98.44
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,184 22.9 3,555 13.95 1,229 21.9 3,691 14.77
Food & Beverage 1,615 73.9 4,851 19.03 1,707 73.6 5,126 20.51
Telephone 121 51.2 364 1.43 0 0.0 0 0.00
Total 2,921 37.8 8,771 34.41 2,936 35.8 8,817 35.28
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 4,797 62.3 14,407 56.53 5,256 64.2 15,784 63.16
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 865 11.2 2,597 10.19 828 10.1 2,487 9.95
Management Fee 233 3.0 699 2.74 251 3.1 755 3.02
Marketing 582 7.5 1,747 6.85 502 6.1 1,506 6.03
Franchise Fees 229 3.0 688 2.70 253 3.1 761 3.04
Property Oper. & Maint. 385 5.0 1,156 4.53 389 4.7 1,168 4.67
Energy 533 6.9 1,602 6.29 566 6.9 1,700 6.80
Total 2,826 36.6 8,487 33.30 2,790 34.0 8,377 33.52
- -------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,971 25.7 5,920 23.23 2,466 30.2 7,407 29.64
- -------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 368 4.8 1,104 4.33 372 4.5 1,116 4.47
Insurance 110 1.4 330 1.30 126 1.5 378 1.51
Reserve for Replacement 310 4.0 931 3.65 335 4.1 1,007 4.03
Rent 39 0.5 118 0.46 41 0.5 122 0.49
Total 827 10.7 2,484 9.74 874 10.6 2,624 10.50
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME $1,144 15.0% 3,436 $13.49 $1,593 19.6% $4,783 $19.14
===============================================================================================================================
</TABLE>
*Departmental expense ratios are expressed
as a percentage of departmental revenues
- --------------------------------------------------------------------------------
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Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year-to-Date August, 1996 Year-to-Date August, 1995
--------------------------------------------- -----------------------------------------------
No. of Rooms: 333 333
No. of Occupied Rooms: 57,686 59,029
No. of Complimentary Rooms: 1,440 1,824
No. of Days Open: 244 243
Occupancy: 71.0% Amount per Amount per 72.9% Amount per Amount per
Average Rate: $69.13 Percent Available Occupied $62.80 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,988 68.8% $11,975 $69.13 $3,707 68.6% $11,133 $62.80
Food 1,157 20.0 3,476 20.07 1,110 20.5 3,332 18.80
Beverage 374 6.4 1,122 6.48 323 6.0 971 5.48
Telephone 190 3.3 569 3.29 175 3.2 526 2.97
Net Rental & Other Income 85 1.5 254 1.47 87 1.6 260 1.47
Total 5,793 100.0 17,397 100.42 5,402 99.9 16,223 91.52
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 833 20.9 2,503 14.45 767 20.7 2,303 12.99
Food & Beverage 1,139 74.4 3,421 19.75 1,061 74.1 3,187 17.98
Telephone 102 53.6 305 1.76 79 45.1 237 1.34
Total 2,074 35.8 6,229 35.96 1,907 35.3 5,728 32.31
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 3,719 64.2 11,168 64.47 3,495 64.6 10,495 59.20
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 558 9.6 1,675 9.67 629 11.6 1,888 10.65
Management Fee 397 3.0 525 3.03 359 3.0 489 2.76
Marketing +ERR 6.9 1,192 6.88 +ERR 6.6 1,078 6.08
Franchise Fees 120 2.1 359 2.07 185 3.4 557 3.14
Property Oper. & Maint 259 4.5 777 4.49 240 4.4 721 4.07
Energy 387 6.7 1,163 6.72 358 6.6 1,076 6.07
Total 1,895 32.8 5,692 32.86 1,934 35.6 5,809 32.77
- -------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,823 31.4 5,476 31.61 1,560 29.0 4,686 26.43
- -------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 228 3.9 685 3.95 193 3.6 578 3.26
Insurance 92 1.6 276 1.60 70 1.3 211 1.19
Reserve for Replacement 233 4.0 700 4.04 217 4.0 652 3.68
Rent 27 0.5 82 0.47 27 0.5 81 0.46
Total 581 10.0 1,744 10.07 507 9.4 1,522 8.59
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME $1,243 21.4% $3,732 $21.54 $1,054 19.6% $3,164 $17.84
===============================================================================================================================
</TABLE>
*Departmental expense ratios are expressed
as a percentage of departmental revenues
- --------------------------------------------------------------------------------
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Comparable Operating Statements
These historical income and expense statements show that the subject property's
profitability has increased both in terms of overall dollar amount and as a
percentage of revenues. Year-to-date August figures show that net income rose
from 19.6% of gross revenue in 1995 to 21.4% in 1996. Average rate increased by
10.1% on a year-to-date basis, from $62.80 in 1995 to $69.13 in 1996. By
attracting higher-rated demand, the subject property was also able to increase
its food, beverage, and telephone revenues on a per-occupied-room basis;
however, we also note that management was forced to increase many departmental
expenses in order to retain this type of clientele.
The year-to-date 1996 increase in net income largely stems from growth in total
revenue. Although year-to-date occupancy declined by 2.7% from 1995 to 1996,
average rate and rooms revenue rose by 10.1% and 7.6%, respectively. In general,
less rate-sensitive customers are also likely to use a hotel's various
facilities and services; consequently, food, beverage, and telephone revenues
all rose on a per-occupied-room basis. One exception was rent and other income,
which includes revenue derived from space rentals, commissions, interest,
vending, in-room movies, and other miscellaneous items. If activity involving
these various revenue generators had remained stable, we would expect this line
item to increase by inflation; however, year-to-date revenues remained
unchanged, indicating a slight decrease in activity. Total revenue increased by
7.2% on a year-to-date basis, from roughly $5,400,000 in 1995 to $5,800,000 in
1996.
Departmental expenses rose slightly as a percentage of gross revenues on a
year-to-date basis, from 35.4% in 1995 to 35.8% in 1996. Specifically, rooms,
food and beverage, and telephone expenses have increased at rates higher than
inflation on a per-occupied-room basis.
Marketing, energy, and property operations and maintenance expenses also
increases when considered as amounts per available room, although administrative
and general costs declined. Franchise fees also dropped by a substantial 35.5%
from August of 1995 to August of 1996; this reflects the new franchise agreement
with Hilton that was executed in August of 1995, which established a monthly
franchise fee of 3.0% of rooms revenue through August of 1997 and 5.0% of rooms
revenue for the remaining term of the agreement. Overall, year-to-date operating
expenses decreased from 35.6% of gross revenues in 1995 to 32.8% in 1996.
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Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
operating results. Depending on the dynamics of the local market, a typical
buyer's projection may be adjusted upward or downward. We have attempted to
consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
69.8%. This base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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================================================================================
Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
1995
-----------------------------------------------
No. of Rooms: 333
Occupancy: 69.8%
Average Rate: $60.80 Amount per Amount per
No. of Occupied Rooms: 84,867 Percent Available Occupied
(+000) of Gross Room Room
- --------------------------------------------------------------------------------
REVENUE
Rooms $5,160 65.7% $15,496 $60.80
Food 1,732 22.0 5,201 20.41
Beverage 578 7.4 1,737 6.82
Telephone 253 3.2 761 2.98
Net Rental & Other Income 131 1.7 394 1.54
Total 7,855 100.0 23,589 92.56
- --------------------------------------------------------------------------------
EXPENSES
Rooms* 1,279 24.8 3,840 15.07
Food & Beverage* 1,712 74.1 5,142 20.18
Telephone* 155 61.3 466 1.83
Administrative & General 822 10.5 2,467 9.68
Management Fee 236 3.0 708 2.78
Marketing 622 7.9 1,869 7.33
Franchise Fees 258 3.3 775 3.04
Property Oper. & Maint. 400 5.1 1,202 4.72
Energy 560 7.1 1,682 6.60
Property Taxes 261 3.3 785 3.08
Insurance 117 1.5 350 1.37
Reserve for Replacement 314 4.0 944 3.70
Rent 39 0.5 118 0.46
Total 6,776 86.3 20,347 79.84
- --------------------------------------------------------------------------------
NET INCOME $1,079 13.7% $3,241 $12.72
================================================================================
*Departmental expense ratios are expressed
as a percentage of departmental revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Although line items can be affected by different factors,
we must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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================================================================================
Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Webber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
------ ------
Averages 3.0% 2.9%
</TABLE>
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
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The preceding table shows inflation forecasts averaging 3.0% and 2.9%. Most of
the economists in the sample estimate inflation rates ranging from 2.5% to 3.4%,
but several anticipate slightly higher levels. As a further check on these
inflation projections, we have reviewed historical increases in the Consumer
Price Index. Because the value of real estate is predicated on cash flows over a
relatively long period, inflation should be considered from a long-term
perspective. Between 1986 and 1995, the national CPI increased at an average
annual compounded rate of 3.7%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-6 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
---------------------------------
1997 0.0%
1998 5.0
1999 4.0
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1995 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-7 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Occupancy Percentage 70.0% 70.0% 70.0%
Projected Average Rate $69.69 $73.17 $76.10
- --------------------------------------------------------------------------------
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Rooms revenue is calculated as follows.
================================================================================
Table 10-8 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Rooms
Number Days in Revenue
Year Occupancy Average Rate of Units in Year (+000)
- --------------------------------------------------------------------------------
1997 70% x $69.69 x 333 x 365 = $5,929
1998 70 x 73.17 x 333 x 365 = 6,225
Stabilized 70 x 76.10 x 333 x 365 = 6,475
- --------------------------------------------------------------------------------
Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue. Although food
and beverage revenues vary directly with changes in occupancy, the small portion
generated by banquet sales and outside capture is relatively fixed.
Food revenue was projected based on this relationship between the fixed and
variable components. The following table shows the projected food revenue and
several units of comparison that can be used to check the reasonableness of the
forecast.
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================================================================================
Table 10-9 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Food Revenue (+000) $1,859 $1,924 $1,991
Percent of Total Revenue 21.1% 20.9% 20.8%
Amount per Available Room $5,583 $5,778 $5,980
Amount per Occupied Room $21.85 $22.61 $23.40
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges. Based on a comparison of year-to-date August
figures for 1995 and 1996, beverage revenue has increased to approximating 33%
of food revenue. The following table illustrates the forecast of beverage
revenue, which is based on this information.
================================================================================
Table 10-10 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Beverage Revenue (+000) $621 $643 $665
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has
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declined as a result of the extensive use of long-distance carrier services that
can be accessed locally or through a toll-free number. When guests charge
long-distance calls to their personal or business accounts in this manner, the
hotel loses the revenue associated with long-distance tariffs and mark-ups, and
only receives an access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-11 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
-------------------------------------------------------------------------
Projected Telephone Revenue (+000) $272 $281 $291
Percent of Total Revenue 3.1% 3.1% 3.0%
Amount per Available Room $817 $845 $875
Amount per Occupied Room $3.20 $3.30 $3.42
- --------------------------------------------------------------------------------
Net Rental and Other Income
Rental income is derived from the property's gift shop and health club rentals,
as well as the other minor space rentals. Other income is derived from sources
other than guestrooms, food and beverages, telephone services, and rent.
Depending on the type of hotel and the facilities and amenities offered, other
income may include the following items.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
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o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-12 Forecast of Net Rental and Other Income
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Net Rental & Other Income (+000) $141 $145 $151
Percent of Total Revenue 1.6% 1.6% 1.6%
Amount per Available Room $422 $437 $452
Amount per Occupied Room $1.66 $1.70 $1.77
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
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================================================================================
Table 10-13 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Rooms Expense (+000) $1,371 $1,419 $1,469
Percent of Rooms Revenue 23.1% 22.8% 22.7%
Amount per Available Room $4,118 $4,262 $4,411
Amount per Occupied Room $16.11 $16.68 $17.27
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. After considering the fixed and variable components, we
forecast the subject property's food and beverage expense as follows.
================================================================================
Table 10-14 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Food & Beverage Expense (+000) $1,836 $1,900 $1,967
Percent of Food and Beverage Revenue 74.0% 74.0% 74.0%
Amount per Available Room $5,514 $5,707 $5,906
Amount per Occupied Room $21.58 $22.33 $23.12
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately
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correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-15 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Telephone Expense (+000) $166 $172 $178
Percent of Telephone Revenue 61.2% 61.3% 61.2%
Amount per Available Room $500 $517 $535
Amount per Occupied Room $1.95 $2.02 $2.09
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume. In recent years, several new items have been
added to the administrative and general expense category. Human resources
includes the cost of recruiting, relocating, and training personnel. Security
consists of the cost of contract security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems;
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and the guest transportation services provided by the hotel. The following table
illustrates our forecast of administrative and general expense.
================================================================================
Table 10-16 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------- ----------------
Projected Admin. & General Expense (+000) $893 $927 $960
Percent of Total Revenue 10.1% 10.1% 10.0%
Amount per Available Room $2,682 $2,784 $2,883
Amount per Occupied Room $10.50 $10.90 $11.29
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by the Remington Hotel Corporation, which
receives a base fee of 3% of gross revenues. Based on our review of the current
market for management contracts, it is our opinion that this fee is consistent
with prevailing market terms. Applying this management fee structure to the
projection of total revenue yields the following forecast of the subject
property's management fee.
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================================================================================
Table 10-17 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Management Fee (+000) $265 $277 $287
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue. Based on the location of the subject property, the
local market for transient accommodations, the competitive environment, and the
hotel's anticipated market segmentation, we have developed the following
marketing forecast using a fixed and variable component model.
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================================================================================
Table 10-18 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Marketing Expense (+000) $676 $702 $728
Percent of Total Revenue 7.7% 7.6% 7.6%
Amount per Available Room $2,031 $2,109 $2,185
Amount per Occupied Room $7.95 $8.25 $8.55
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Hilton Inns, Inc., a subsidiary of
the Hilton Hotel Corporation, for the use of the company's name, trademarks, and
service marks. The following table illustrates the projection of the subject
property's franchise fee.
================================================================================
Table 10-19 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Franchise Fees (+000) $217 $311 $324
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-
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quality building materials and construction methods generally reduces the need
for maintenance expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-20 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 Stabilized
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Projected Property Operations & Maint. Expense (+000) $435 $452 $468
Percentage of Total Revenue 4.9% 4.9% 4.9%
Amount per Available Room $1,306 $1,356 $1,405
Amount per Occupied Room $5.11 $5.31 $5.50
</TABLE>
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
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================================================================================
Table 10-21 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Energy Expense (+000) $603 $625 $647
Percentage of Total Revenue 6.8% 6.8% 6.8%
Amount per Available Room $1,811 $1,876 $1,942
Amount per Occupied Room $7.09 $7.34 $7.60
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-22 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Property Taxes (+000) $280 $290 $300
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $125,000, or $375 per available room, in 1997 (the first
projection period). In subsequent years, this amount is assumed to increase in
tandem with inflation. The following table outlines our projection of insurance
expense.
================================================================================
Table 10-23 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Insurance Expense (+000) $125 $129 $134
- --------------------------------------------------------------------------------
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Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions that are being made
currently. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-24 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Replacement Reserves (+000) $353 $369 $383
- --------------------------------------------------------------------------------
Rent Expense
The subject property's rent expense consists of the cost of renting two vans and
copier machines. We assume that the hotel will continue to lease these or
similar items under the current contracts or under new contracts with comparable
terms.
Based on historical levels and the current contracts, we project the subject
property's rent expense at $42,000 in 1997 (the first projection period). In
subsequent years, this amount is assumed to increase in tandem with inflation.
The following table outlines our projection of rent expense.
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Table 10-25 Forecast of Rent Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Projected Rent Expense (+000) $42 $44 $45
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years, and are expressed in inflated
dollars for each year.
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================================================================================
Table 10-26 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, St. Petersburg Bayfront Hilton,
St. Petersburg, Florida
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 Operating Results 1997
-------------------------------------- --------------------------------------
No. of Rooms: 333 333
Occupancy: 69.8% 70.0%
Average Rate: $60.80 $69.69
No. of Days Open: 365 Percent 365 Percent
No. of Occupied Rooms: 84,867 of 85,082 of
(+000) Gross PAR POR (+000) Gross PAR POR
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,160 66.9% $15,496 $60.80 $5,929 67.2% $17,805 $69.69
Food 1,682 21.8 5,050 19.81 1,859 21.1 5,583 21.85
Beverage 503 6.5 1,510 5.93 621 7.0 1,865 7.30
Telephone 237 3.1 711 2.79 272 3.1 817 3.20
Net Rental & Other Income 137 1.8 410 1.61 141 1.6 423 1.66
Total 7,718 100.1 23,177 90.94 8,822 100.0 26,492 103.69
- ---------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,184 22.9 3,555 13.95 1,371 23.1 4,117 16.11
Food & Beverage 1,615 73.9 4,851 19.03 1,836 74.0 5,514 21.58
Telephone 121 51.2 364 1.43 166 61.0 498 1.95
Total 2,921 37.8 8,771 34.41 3,373 38.2 10,129 39.64
- ---------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 4,797 62.3 14,407 56.53 5,449 61.8 16,363 64.04
- ---------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 865 11.2 2,597 10.19 893 10.1 2,682 10.50
Management Fee 233 3.0 699 2.74 265 3.0 796 3.11
Marketing 582 7.5 1,747 6.85 676 7.7 2,030 7.95
Franchise Fees 229 3.0 688 2.70 217 2.5 653 2.56
Property Oper. & Maint. 385 5.0 1,156 4.53 435 4.9 1,306 5.11
Energy 533 6.9 1,602 6.29 603 6.8 1,811 7.09
Total 2,826 36.6 8,487 33.30 3,089 35.0 9,277 36.31
- ---------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,971 25.7 5,919 23.23 2,360 26.8 7,086 27.73
- ---------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 368 4.8 1,104 4.33 280 3.2 841 3.29
Insurance 110 1.4 330 1.30 125 1.4 375 1.47
Reserve for Replacement 310 4.0 931 3.65 353 4.0 1,060 4.15
Rent 39 0.5 118 0.46 42 0.5 126 0.49
Total 827 10.7 2,484 9.74 800 9.1 2,402 9.40
- ---------------------------------------------------------------------------------------------------------------
NET INCOME $1,144 15.0% $3,436 $13.48 $1,560 17.7% $4,683 $18.33
===============================================================================================================
Food/Rooms 32.6% 31.4%
Beverage/Food 29.9% 33.4%
Telephone/Rooms 4.6% 4.6%
Other Income/Rooms 2.6% 2.4%
<CAPTION>
1998 Stabilized
-------------------------------------- --------------------------------------
No. of Rooms: 333 333
Occupancy: 70.0% 70.0%
Average Rate: $73.17 $76.10
No. of Days Open: 365 Percent 365 Percent
No. of Occupied Rooms: 85,082 of 85,082 of
(+000) Gross PAR POR (+000) Gross PAR POR
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $6,225 67.5% $18,694 $73.17 $6,475 67.7% $19,444 $76.10
Food 1,924 20.9 5,778 22.61 1,991 20.8 5,979 23.40
Beverage 643 7.0 1,931 7.56 665 6.9 1,997 7.82
Telephone 281 3.0 844 3.30 291 3.0 874 3.42
Net Rental & Other Income 145 1.6 435 1.70 151 1.6 453 1.77
Total 9,218 100.0 27,682 108.34 9,573 100.0 28,748 112.52
- ---------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,419 22.8 4,261 16.68 1,469 22.7 4,411 17.27
Food & Beverage 1,900 74.0 5,706 22.33 1,967 74.1 5,907 23.12
Telephone 172 61.2 517 2.02 178 61.2 535 2.09
Total 3,491 37.9 10,483 41.03 3,614 37.8 10,853 42.48
- ---------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 5,727 62.1 17,198 67.31 5,959 62.2 17,895 70.04
- ---------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 927 10.1 2,784 10.90 960 10.0 2,883 11.28
Management Fee 277 3.0 832 3.26 287 3.0 862 3.37
Marketing 702 7.6 2,108 8.25 728 7.6 2,186 8.56
Franchise Fees 311 3.4 934 3.66 324 3.4 973 3.81
Property Oper. & Maint. 452 4.9 1,357 5.31 468 4.9 1,405 5.50
Energy 625 6.8 1,877 7.35 647 6.8 1,943 7.60
Total 3,294 35.8 9,892 38.72 3,414 35.7 10,252 40.13
- ---------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 2,433 26.3 7,306 28.60 2,545 26.5 7,643 29.91
- ---------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 290 3.1 871 3.41 300 3.1 901 3.53
Insurance 129 1.4 387 1.52 134 1.4 402 1.57
Reserve for Replacement 369 4.0 1,108 4.34 383 4.0 1,150 4.50
Rent 44 0.5 132 0.52 45 0.5 135 0.53
Total 832 9.0 2,498 9.78 862 9.0 2,589 10.13
- ---------------------------------------------------------------------------------------------------------------
NET INCOME $1,601 17.3% $4,808 $18.82 $1,683 17.5% $5,054 $19.78
===============================================================================================================
Food/Rooms 30.9% 30.7%
Beverage/Food 33.4% 33.4%
Telephone/Rooms 4.5% 4.5%
Other Income/Rooms 2.3% 2.3%
</TABLE>
*Departmental expense ratios are expressed
as a percentage of departmental revenues
- --------------------------------------------------------------------------------
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================================================================================
Table 10-27 Ten-Year Forecast of Income and Expense, St. Petersburg Bayfront
Hilton, St. Petersburg, Florida (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
--------------- ---------------- ---------------- --------------- ---------------
No. of Rooms: 333 333 333 333 333
No. of Occupied Rooms: 85,082 85,082 85,082 85,082 85,082
Occupancy: 70.0% % of 70.0% % of 70.0% % of 70.0% % of 70.0% % of
Average Rate: $69.69 Gross $73.17 Gross $76.10 Gross $78.76 Gross $81.52 Gross
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,929 67.2% $6,225 67.5% $6,475 67.7% $6,701 67.7% $6,936 67.7%
Food 1,859 21.1 1,924 20.9 1,991 20.8 2,061 20.8 2,133 20.8
Beverage 621 7.0 643 7.0 665 6.9 688 6.9 712 6.9
Telephone 272 3.1 281 3.0 291 3.0 302 3.0 312 3.0
Net Rental & Other Income 141 1.6 145 1.6 151 1.6 156 1.6 161 1.6
Total 8,822 100.0 9,218 100.0 9,573 100.0 9,908 100.0 10,254 100.0
- -----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,371 23.1 1,419 22.8 1,469 22.7 1,520 22.7 1,574 22.7
Food & Beverage 1,836 74.0 1,900 74.0 1,967 74.1 2,035 74.0 2,107 74.1
Telephone 166 61.0 172 61.2 178 61.2 185 61.3 191 61.2
Total 3,373 38.2 3,491 37.9 3,614 37.8 3,740 37.7 3,872 37.8
DEPARTMENTAL INCOME 5,449 61.8 5,727 62.1 5,959 62.2 6,168 62.3 6,382 62.2
- -----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 893 10.1 927 10.1 960 10.0 994 10.0 1,029 10.0
Management Fee 265 3.0 277 3.0 287 3.0 297 3.0 308 3.0
Marketing 676 7.7 702 7.6 728 7.6 753 7.6 779 7.6
Franchise Fees 217 2.5 311 3.4 324 3.4 335 3.4 347 3.4
Property Oper. & Maint. 435 4.9 452 4.9 468 4.9 484 4.9 501 4.9
Energy 603 6.8 625 6.8 647 6.8 669 6.8 693 6.8
Total 3,089 35.0 3,294 35.8 3,414 35.7 3,532 35.7 3,657 35.7
- -----------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 2,360 26.8 2,433 26.3 2,545 26.5 2,636 26.6 2,725 26.5
- -----------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 280 3.2 290 3.1 300 3.1 310 3.1 321 3.1
Insurance 125 1.4 129 1.4 134 1.4 138 1.4 143 1.4
Reserve for Replacement 353 4.0 369 4.0 383 4.0 396 4.0 410 4.0
Rent 42 0.5 44 0.5 45 0.5 47 0.5 48 0.5
Total 800 9.1 832 9.0 862 9.0 891 9.0 922 9.0
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME $1,560 17.7% $1,601 17.3% $1,683 17.5% $1,745 17.6% $1,803 17.5%
=======================================================================================================================
<CAPTION>
2002 2003 2004 2005 2006
--------------- --------------- --------------- --------------- ---------------
No. of Rooms: 333 333 333 333 333
No. of Occupied Rooms: 85,082 85,082 85,082 85,082 85,082
Occupancy: 70.0% % of 70.0% % of 70.0% % of 70.0% % of 70.0% % of
Average Rate: $84.37 Gross $87.33 Gross $90.38 Gross $93.55 Gross $96.82 Gross
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $7,179 67.7% $7,430 67.7% $7,690 67.7% $7,959 67.6% $8,238 67.7%
Food 2,208 20.8 2,285 20.8 2,365 20.8 2,448 20.8 2,534 20.8
Beverage 737 6.9 763 6.9 790 6.9 818 7.0 846 6.9
Telephone 323 3.0 334 3.0 346 3.0 358 3.0 371 3.0
Net Rental & Other Income 167 1.6 173 1.6 179 1.6 185 1.6 192 1.6
Total 10,614 100.0 10,985 100.0 11,370 100.0 11,768 100.0 12,181 100.0
- --------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,629 22.7 1,686 22.7 1,745 22.7 1,806 22.7 1,869 22.7
Food & Beverage 2,181 74.1 2,257 74.0 2,336 74.0 2,418 74.0 2,502 74.0
Telephone 198 61.3 205 61.4 212 61.3 219 61.2 227 61.2
Total 4,008 37.8 4,148 37.8 4,293 37.8 4,443 37.8 4,598 37.7
- --------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 6,606 62.2 6,837 62.2 7,077 62.2 7,325 62.2 7,583 62.3
- --------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,065 10.0 1,102 10.0 1,141 10.0 1,181 10.0 1,222 10.0
Management Fee 318 3.0 330 3.0 341 3.0 353 3.0 365 3.0
Marketing 807 7.6 835 7.6 864 7.6 894 7.6 926 7.6
Franchise Fees 359 3.4 372 3.4 385 3.4 398 3.4 412 3.4
Property Oper. & Maint. 519 4.9 537 4.9 556 4.9 575 4.9 595 4.9
Energy 717 6.8 742 6.8 768 6.8 795 6.8 823 6.8
Total 3,785 35.7 3,918 35.7 4,055 35.7 4,196 35.7 4,343 35.7
- --------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 2,821 26.5 2,919 26.5 3,022 26.5 3,129 26.5 3,240 26.6
- --------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 333 3.1 344 3.1 356 3.1 369 3.1 382 3.1
Insurance 148 1.4 153 1.4 159 1.4 164 1.4 170 1.4
Reserve for Replacement 425 4.0 439 4.0 455 4.0 471 4.0 487 4.0
Rent 50 0.5 52 0.5 54 0.5 55 0.5 57 0.5
Total 956 9.0 988 9.0 1,024 9.0 1,059 9.0 1,096 9.0
- --------------------------------------------------------------------------------------------------------------------------
NET INCOME $1,865 17.5% $1,931 17.5% $1,998 17.5% $2,070 17.5% $2,144 17.6%
==========================================================================================================================
</TABLE>
*Departmental expense ratios are expressed
as a percentage of departmental revenues
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-28 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
----------------------------------------------------------
1st Quarter 1996 7.79% 7.37%
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a
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hotel mortgage and the concurrent yield on an average A corporate bond. Through
a regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The average yield on A corporate bonds for the third quarter of 1996, as
reported by Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the
equation presented above produces an estimated hotel/motel interest rate of
8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of 65% to 75%, and
amortization periods of 25 to 30 years. The exact terms offered depend on
specific factors such as the property's location, the age and quality of the
physical facility, local hostelry market conditions, and
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(perhaps more significantly) the profile of the borrower. The strongest projects
typically command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 25-year
amortization mortgage with a 9.5% interest rate and a .104844 constant is
appropriate for the subject property. We believe that a mortgage lender will
lend up to 70% of the hotel's market value as determined by this appraisal.
Equity Compnent
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-29 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. These sources of equity funds have
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
================================================================================
Table 10-30 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22.0% before payment of incentive management
fees. This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a .104844 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Table 10-31 Capitalization Rate Calculation
- --------------------------------------------------------------------------------
Percent Rate of Weighted
of Value Return Average
---------------------------------------------------
Mortgage 70% x 0.10484 = 0.07339
Equity 30% x 0.12000 = 0.03600
---------
Overall Capitalization Rate 0.10939
- --------------------------------------------------------------------------------
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11.0%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-32 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow (as
derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at roundly $14,229,000.
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22.0%, then $14,229,000 is the correct value by the
income capitalization approach. Using the assumed financial structure set forth
in the previous calculations, market value can be allocated between the debt and
equity as follows.
Mortgage Component (70%) $9,961,000
Equity Component (30%) 4,269,000
-----------
Total $14,229,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $9,961,000
Mortgage Constant 0.104844
----------
Annual Debt Service $1,044,347
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-33 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $1,560,000 - $1,044,000 = $516,000
1998 1,601,000 - 1,044,000 = 557,000
1999 1,683,000 - 1,044,000 = 639,000
2000 1,745,000 - 1,044,000 = 701,000
2001 1,803,000 - 1,044,000 = 759,000
2002 1,865,000 - 1,044,000 = 821,000
2003 1,931,000 - 1,044,000 = 887,000
2004 1,998,000 - 1,044,000 = 954,000
2005 2,070,000 - 1,044,000 = 1,026,000
2006 2,144,000 - 1,044,000 = 1,100,000
- --------------------------------------------------------------------------------
The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ( $2,219,000 / 0.110 ) $20,173,000
Less: Brokerage and Legal Fees 605,000
Less: Mortgage Balance 8,334,000
-----------
Net Sale Proceeds to Equity $11,234,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
================================================================================
Table 10-34 Overall Property Yields
- --------------------------------------------------------------------------------
Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
----------------------------------------------------------------------
Total Property $14,229,000 14.3%
Mortgage 9,961,000 9.5
Equity 4,269,000 22.0
- --------------------------------------------------------------------------------
The following tables demonstrate that the property receives its anticipated
yields, proving that the value of approximately $14,229,000 is correct based on
the assumptions used in this approach.
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Table 10-35 Total Property Yield
- --------------------------------------------------------------------------------
Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor at 14.3% Cash Flow
- --------------------------------------------------------------------------------
1997 $1,560,000 x 0.874513 = $1,364,000
1998 1,601,000 x 0.764774 = 1,224,000
1999 1,683,000 x 0.668805 = 1,126,000
2000 1,745,000 x 0.584879 = 1,021,000
2001 1,803,000 x 0.511484 = 922,000
2002 1,865,000 x 0.447300 = 834,000
2003 1,931,000 x 0.391169 = 755,000
2004 1,998,000 x 0.342083 = 683,000
2005 2,070,000 x 0.299156 = 619,000
2006 21,712,000* x 0.261616 = 5,680,000
-----------
Total Property Value $14,228,000
*Tenth-year net income of $2,144,000 plus sales proceeds of $19,568,000
- --------------------------------------------------------------------------------
================================================================================
Table 10-36 Mortgage Component Yield
- --------------------------------------------------------------------------------
Present Worth of $1 Discounted
Year Debt Service Factor at 9.5% Cash Flow
- --------------------------------------------------------------------------------
1997 $1,044,000 x 0.913841 = $954,000
1998 1,044,000 x 0.835106 = 872,000
1999 1,044,000 x 0.763155 = 797,000
2000 1,044,000 x 0.697402 = 728,000
2001 1,044,000 x 0.637315 = 665,000
2002 1,044,000 x 0.582405 = 608,000
2003 1,044,000 x 0.532226 = 556,000
2004 1,044,000 x 0.486370 = 508,000
2005 1,044,000 x 0.444465 = 464,000
2006 9,378,000* x 0.406170 = 3,809,000
----------
Value of the Mortgage Component $9,961,000
*Tenth-year debt service of $1,044,000
plus outstanding mortgage balance of $8,334,000
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Table 10-37 Equity Component Yield
- --------------------------------------------------------------------------------
Net Income Present Worth of $1 Discounted
Year to Equity Factor at 22.0% Cash Flow
- --------------------------------------------------------------------------------
1997 516,000 x 0.819637 = 423,000
1998 557,000 x 0.671805 = 374,000
1999 639,000 x 0.550636 = 352,000
2000 701,000 x 0.451321 = 316,000
2001 759,000 x 0.369920 = 281,000
2002 821,000 x 0.303200 = 249,000
2003 887,000 x 0.248514 = 220,000
2004 954,000 x 0.203691 = 194,000
2005 1,026,000 x 0.166953 = 171,000
2006 12,334,000* x 0.136841 = 1,688,000
---------
Value of the Equity Component 4,268,000
*Tenth-year net income to equity of $1,100,000
plus sales proceeds of $11,234,000
- --------------------------------------------------------------------------------
Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.3%.
After reviewing the total property yields indicated by recent hotel sales, it is
our opinion that a 14.0% discount factor is appropriate for the St. Petersburg
Bayfront Hilton. The following table illustrates the discounted cash flow
analysis using this 14.0% factor.
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Table 10-38 Discounted Cash Flow Analysis
- --------------------------------------------------------------------------------
Discount
Net Factor Discounted
Year Income at 14.0% Cash Flow
- ---------------------------------------------------------------------------
1997 $1,560,000 x 0.87719 = $1,368,421
1998 1,601,000 x 0.76947 = 1,231,918
1999 1,683,000 x 0.67497 = 1,135,977
2000 1,745,000 x 0.59208 = 1,033,180
2001 1,803,000 x 0.51937 = 936,422
2002 1,865,000 x 0.45559 = 849,669
2003 1,931,000 x 0.39964 = 771,700
2004 1,998,000 x 0.35056 = 700,417
2005 2,070,000 x 0.30751 = 636,541
2006 21,711,545* x 0.26974 = 5,856,555
-----------
Estimated Market Value $14,520,799
(Say) $14,500,000
Reversion Analysis
11th-Year Net Income $2,219,000
Capitalization Rate 11.0%
-----------
Total Sales Proceeds $20,172,727
Less: Brokerage & Legal Fees at 3.0% 605,182
-----------
Net Sales Proceeds $19,567,545
*Tenth-year net income of $2,144,000 plus sales proceeds of $19,567,545
- --------------------------------------------------------------------------------
Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors...This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $14,229,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
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Property: Lexington Hyatt Regency
Location: 400 West Vine Street, Lexington, KY
Date of Sale: May, 1996
Sales Price: $14,000,000
Grantor: Lexington Hotel and Mall Corporation
Grantee: Patriot American
Year Opened: 1977
Number of Rooms: 365
Price per Room: $38,356
Confirmed By: Patriot American
Sale #2:
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Property: Hyatt Pittsburgh
Location: 112 Washington Place, Pittsburgh, PA
Date of Sale: April, 1996
Sales Price: $18,500,000
Grantor: Elteq Equities Inc., Pittsburgh
Grantee: Interstate/Host Marriott
Year Opened: 1966
Number of Rooms: 400
Price per Room: $46,250
Confirmed By: Host Marriott
Sale #3:
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Property: Baton Rouge Hilton
Location: 5500 Hilton Avenue, Baton Rouge, LA
Date of Sale: April, 1996
Sales Price: $14,500,000
Grantor: Not available
Grantee: Davidson Hotels
Year Opened: 1976
Number of Rooms: 298
Price per Room: $48,658
Confirmed By: Davidson Hotels
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Sale #4:
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Property: Hyatt Newporter
Location: 1107 Jamboree Road, Newport Beach, CA
Date of Sale: April, 1996
Sales Price: $17,450,000
Grantor: Not available
Grantee: Patriot American
Year Opened: 1962
Number of Rooms: 410
Price per Room: $42,561
Confirmed By: Patriot American
Sale #5:
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Property: Marina Hotel and Conference Center
Location: 1515 Prudential Drive, Jacksonville, FL
Date of Sale: November, 1995
Sales Price: $15,900,000
Grantor: New York Life
Grantee: GenCom Hospitality
Year Opened: 1980
Number of Rooms: 322
Price per Room: $49,379
Confirmed By: National Hotel Realty Advisors
Sale #6:
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Property: Daytona Beach Marriott
Location: 100 North Atlantic Ave., Daytona Beach, FL
Date of Sale: February, 1995
Sales Price: $20,600,000
Grantor: Barclays Bank
Grantee: Adam's Mark Hotels
Year Opened: 1989
Number of Rooms: 402
Price per Room: $51,244
Confirmed By: Adam's Mark Hotels
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We have also considered the 1994 sale of the subject property and the 1995 sale
of the Stouffer Renaissance Vinoy (one of the Hilton's primary competitors). The
details of these transactions are summarized as follows.
Sale #7:
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Property: Stouffer Renaissance Vinoy
Location: 501 5th Avenue NE, St. Petersburg, FL
Date of Sale: December, 1995
Sales Price: $45,000,000
Grantor: Barclays Bank
Grantee: Renaissance Hotels
Year Opened: 1925/1992
Number of Rooms: 360
Price per Room: $125,000
Confirmed By: Aetna
Comments: Grantor obtained the property through foreclosure;
by virtue of an extensive renovation that occurred
in 1992, this property was in very good condition at
the time of sale.
Subject Property:
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Property: St. Petersburg Hilton
Location: 333 1st Street South, St. Petersburg, FL
Date of Sale: September, 1994
Sales Price: $4,500,000
Grantor: St. Petersburg Harbor View Hotel Corp.
Grantee: St. Petersburg Florida Hotel Limited Partnership (an
entity controlled by the Ashford Financial
Corporation)
Year Opened: 1971
Number of Rooms: 333
Price per Room: $13,516
Confirmed By: Ashford Financial Corporation
The 1995 sale of the Stouffer Renaissance Vinoy is included in our discussion as
a result of the hotel's close proximity to the subject property. However, the
Vinoy's far superior facilities exclude it from consideration in our range of
value indications via the sales comparison approach.
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In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. In June of 1994, the Ashford
Financial Corporation acquired 100% of the outstanding industrial development
revenue bonds secured by the subject property; the all-cash purchase price was
$4,005,000. In July, Ashford entered into a settlement agreement with the debtor
and owner of the property, St. Petersburg Harbor View Hotel Corporation; the
terms of the agreement principally consisted of the conveyance of the real
property and all furniture, fixtures, and equipment in exchange for the release
of liability of all obligors. The subject property was also acquired subject to
delinquent property taxes, which were under litigation. The unpaid tax amount
was roundly $500,000; accordingly, the total investment for the acquisition of
the property was approximately $4,500,000. Based on our understanding of the
terms of this transaction, we do not believe that the sale was reflective of
market value.
The relevance of the transaction involving the subject property is also
undermined by the significant change in market conditions that occurred between
the date of this sale and the date of value of this appraisal. Areawide
occupancy and average rate have improved in the intervening months, and this
favorable trend is expected to continue. As previously discussed, the market for
hotel investments has also improved significantly as a result of changes in
lender and investor attitudes. For these reasons, it is our opinion that the
1994 sale of the subject property is not a reliable indicator of the hotel's
current value.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific,
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detailed information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the sales of the Renaissance Vinoy and the
subject property, the prices range from approximately $38,000 to $51,000 per
room, or roughly 12,700,000 to $17,000,000 for the 333-unit subject property.
The income capitalization approach indicates a value of $14,229,000, which falls
within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence becomes
increasingly difficult to quantify accurately. Loss in value
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attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1970, and will be approximately 26 years
old as of the date of this appraisal. The property, which has not received a
major renovation since 1987, appeared to be in good condition at the time of our
inspection. The depressed hotel market conditions that prevailed in the late
1980s and the early 1990s have also led to a degree of external obsolescence. In
our opinion, it is impossible to identify and quantify the impact of these
factors on the property's value with any accuracy, so we will only estimate the
replacement cost.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May issue
of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $42,000 333 $13,986,000
FF&E 12,000 333 3,996,000
Pre-Opening 2,800 333 932,400
Operating Capital 2,000 333 666,000
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Total $58,800 $19,580,400
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
St. Petersburg Bayfront Hilton appears to represent the highest and best use of
the property, the ground lease approach is an appropriate method of determining
land value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3 and 5% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4% of stabilized rooms revenue. The subject property's stabilized
rooms revenue has been deflated to reflect 1997 dollars. The following
calculation shows the derivation of the subject property's economic ground rent.
Stabilized Rooms Revenue (1997 dollars) $6,043,918
Rental Percentage 0.04
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Economic Ground Rent $241,757
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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HVS International, Mineola, New York Cost Approach 149
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Economic Ground Rent $241,757 $2,417,567
-------------------------- = -------- =
Capitalization Rate 0.10
Estimated Land Value (Say) $2,420,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 17% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
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Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $19,580,400
Land Value 2,420,000
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Total Replacement Cost $22,000,400
(Say) $22,000,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the St. Petersburg Bayfront Hilton. However, we have estimated the subject
property's replacement cost as new, which may set the upper limit of the hotel's
value.
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HVS International, Mineola, New York Reconciliation of Value Indications 150
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $14,229,000
Sales Comparison $12,700,000 - $17,000,000
Cost (Replacement Cost) $22,000,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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HVS International, Mineola, New York Reconciliation of Value Indications 151
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $38,000 to $51,000 per available room. The income capitalization approach
indicates a per-room value of approximately $42,700. This information suggests
that a slight upward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. The subject property's estimated replacement is more than 50% higher
than the value indicated by the income capitalization approach; this high
replacement cost represents a barrier to entry for prospective hotel
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HVS International, Mineola, New York Reconciliation of Value Indications 152
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developers. Consequently, a slight upward adjustment of the value arrived at by
the income capitalization approach is warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market value
of the fee simple interest in the St. Petersburg Bayfront Hilton , as of January
1, 1997, is:
$14,300,000
FOURTEEN MILLION THREE HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $43,000 per room, which is well supported
by market sales and approximately 0.7% higher than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
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HVS International, Mineola, New York Reconciliation of Value Indications 153
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A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the St. Petersburg Bayfront Hilton indicates that the personal
property and fixtures are in good condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $12,000 per available room. Assuming an average
useful life of ten years and an effective age of six years, the value of the
furniture, fixtures, and equipment currently in place is approximately $4,800
per room, or a total of $1,598,000. Because furniture, fixtures, and equipment
are essential to a hotel's income-generating ability and are seldom removed from
the property or sold separately, the separation of the personal property
component from the real property is not particularly meaningful.
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HVS International, Mineola, New York Statement of Assumptions and
Limiting Conditions 154
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and
Limiting Conditions 155
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and
Limiting Conditions 156
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
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HVS International, Mineola, New York Certification 157
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Catherine M. Tam personally inspected the property described in this
report; Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings, but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 158
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Catherine M. Tam
------------------------------------
Catherine M. Tam
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
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Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
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Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property's main entrance
[GRAPHIC OMITTED]
View of the Subject Property's grand ballroom
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Charmene's Restaurant
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
The Heritage Holiday Inn
[GRAPHIC OMITTED]
The Renaissance Vinoy Hotel
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L A W Y E R S T I T L E
I N S U R A N C E C O R P O R A T I O N
N A T I O N A L H E A D Q U A R T E R S
R I C H M 0 N D, V I R G I N I A
Schedule "A" Lands
TRACT A:
Lots 9 through 16, inclusive, and the South 30 feet of Lots 1 through 8,
inclusive, Block 57, REVISED MAP OF THE CITY OF ST. PETERSBURG, as recorded in
Plat Book 1, page 49, public records of Hillsborough County, Florida, of which
Pinellas County was formerly a part; together with the vacated East/West alley
in said Block 57, said tract being more particularly described as follows:
From a point of beginning at the Southwest corner of Block 57, REVISED MAP OF
THE CITY OF ST. PETERSBURG, as recorded in Plat Book 1, page 49, public records
of Hillsborough County, Florida, of which Pinellas County was formerly a part;
run North 250.00 feet along the West boundary of said Block 57; thence North
89(Degree)58'4l" East, 400.47 feet to the East boundary of said Block 57; thence
South 0(Degree)01'07" East, 250.00 feet to the Southeast corner of said Block
57; thence South 89(Degree)58'4l" West, 400.55 feet to the point of beginning.
TRACT B:
Lots 1 through 8, inclusive, LESS the South 30 feet thereof, Block 57, REVISED
MAP OF THE CITY OF ST. PETERSBURG, as recorded in Plat Book 1, page 49, public
records of Hillsborough County, Florida, of which Pinellas County was formerly a
party; together with the South 90 feet of vacated 3rd Avenue South, lying North
of said Block 57. Said tract being more particularly described as follows:
From the Southwest corner of Block 57, REVISED MAP OF THE CITY OF ST.
PETERSBURG, as recorded in Plat Book 1, page 49, public records of Hillsborough
County, Florida, of which Pinellas County was formerly a part; run North 250.00
feet along the West boundary of said Block 57 to the point of beginning; thence
continue North 260.00 feet along said West boundary of Block 57 and its
Northerly extension; thence North 89(Degree)58'4l" East, 400.38 feet to the East
boundary of said Block 57, extended Northerly; thence South 0(Degree)0l'07"
East, 260.00 feet along said Northerly extension and the East boundary of Block
57; thence South 89(Degree)58'41" West, 400.47 feet to the point of beginning.
Commitment No.9401697
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HVS International, Mineola, New York Synopsis of Franchise and
License Agreements
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Synopsis of Franchise and License Agreements
Date: September 1, 1995
Licensor: Hilton Inns, Inc.
Licensee: St. Petersburg Florida Hotel Limited Partnership
Premises: St. Petersburg Bayfront Hilton, St. Petersburg, Florida
Term: Ten years
Renewal: None stated
Fees: Licensee shall pay a monthly percentage fee for each
fractional or full calendar month in the amount of 3% of
gross room sales from September 1, 1995 through August 31,
1997; thereafter, for the remaining term of the agreement,
the fee is 5% of gross room sales.
Licensee shall also pay a monthly advertising fee for each
fractional of full calendar month in the amount of 1% of
gross room sales.
Licensor Services: Operation review; inspections; Hilton Reservation Service;
regional and national directories; operating manuals;
infringement protection; purchase and lease arrangements;
technical assistance; central purchasing services;
advertising and promotion
Licensee
Obligations: Operate hotel as a system hotel; use only the Hilton name
and "H" service mark; operate, furnish, maintain, and equip
hotel in a first-class manner; refer guests and customers,
wherever possible, only to other system hotels; honor all
nationally recognized credit cards and credit vouchers
generally honored at other system hotels; feature the name
Hilton where appropriate, including the hotel's exterior;
advertise in a first-class manner; identify itself and any
other management company to all persons; indemnify, defend,
and save licensor; deliver monthly, quarterly, and annual
operating statements
Termination: By default by either party
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HVS International, Mineola, New York Simultaneous Valuation Formula 1
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The Simultaneous Valuation Formula as Used in
the Valuation of the Subject Property
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily. This process can be expressed in two algebraic equations
that set forth the mathematic relationships between the known and unknown
variables using the following symbols.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula 2
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to
calculate the total property reversion (sales price at the end of
the projection period)
1/S^n = Present worth of a $1 factor (discount factor) at the equity yield
rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
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HVS International, Mineola, New York Simultaneous Valuation Formula 3
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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HVS International, Mineola, New York Simultaneous Valuation Formula 4
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S2^) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 5
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most instances, net
income before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
================================================================================
Table 1: Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
- --------------------------------------------------------------------------------
The following table illustrates the present worth of a $1 factor at the 22.0%
equity yield rate.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 6
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Table 2: Present Worth of $1 Factor at Equity Yield Rate
- --------------------------------------------------------------------------------
Present Worth of $1
Year Factor at 22.0%
------------------------------------
1997 0.819637
1998 0.671805
1999 0.550636
2000 0.451321
2001 0.369920
2002 0.303200
2003 0.248514
2004 0.203691
2005 0.166953
2006 0.136841
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.104844 - 0.09) / ( 0.155277 - 0.095) = 0.163306
The annual debt service is calculated as f x M x V.
( f x M x V ) = 0.104844 x 0.70 x V = 0.073391 V
Inserting the known variables into the hotel valuation formula produces the
following.
( 1,560,000 - 0.073391 V ) x 0.819672 +
( 1,601,000 - 0.073391 V ) x 0.671862 +
( 1,683,000 - 0.073391 V ) x 0.550707 +
( 1,745,000 - 0.073391 V ) x 0.451399 +
( 1,803,000 - 0.073391 V ) x 0.369999 +
( 1,865,000 - 0.073391 V ) x 0.303278 +
( 1,931,000 - 0.073391 V ) x 0.248589 +
( 1,998,000 - 0.073391 V ) x 0.203761 +
( 2,070,000 - 0.073391 V ) x 0.167017 +
( 2,144,000 - 0.073391 V ) x 0.136899 +
((( 2,219,000 / 0.110 ) - ( 0.03 x ( 2,219,000 / 0.110 )) -
(( 1 - 0.163306 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
<PAGE>
Like terms are combined as follows.
$9,506,757 - 0.368105 V = (1 - 0.70) V
$9,506,757 = 0.66810 V
V = $9,506,757 / 0.66810
V = $14,229,444
Value Indicated by the
Income Capitalization
Approach (Say) $14,229,000
<PAGE>
HVS International, Mineola, New York Qualifications of Catherine M. Tam
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Catherine M. Tam
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports,
and Investment Counseling)
1995 CORNELL UNIVERSITY SCHOOL OF HOTEL ADMINISTRATION
Ithaca, New York
1995 RADNOR HOTEL
Saint Davids, Pennsylvania
1994 to 1995 STATLER HOTEL Ithaca, New York
1992 to 1993 CORNELL UNIVERSITY Ithaca, New York
Education BS - School of Hotel Administration, Cornell University
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
==============================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
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Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Radisson Plaza
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Fort Worth, Texas
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[ Letterhead of HVS International]
November 23, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Radisson Plaza
Fort Worth, Texas
Ref. #9610276
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Tarrant County
area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the fee simple and leasehold
interests in the subject property described in this report, as of January 1,
1997, is:
$25,850,000
TWENTY FIVE MILLION EIGHT HUNDRED
FIFTY THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Kate B. Henriksen
Kate B. Henriksen
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones, CRE
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore, CRE, MAI, CHA
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary .................................................. 1
2. Nature of the Assignment ........................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood .................................... 7
4. Market Area Analysis ............................................... 23
5. Overview of External Forces Affecting the U.S. Lodging Industry .... 33
6. Lodging Market Supply and Demand Analysis .......................... 49
7. Projection of Occupancy and Average Rate ........................... 66
8. Highest and Best Use ............................................... 77
9. Approaches to Value ................................................ 79
10. Income Capitalization Approach ..................................... 82
11. Sales Comparison Approach .......................................... 122
12. Cost Approach ...................................................... 129
13. Reconciliation of Value Indications ................................ 136
14. Statement of Assumptions and Limiting Conditions ................... 140
15. Certification ...................................................... 143
Addenda
Photographs of the Subject Property
Photographs of the Competitors
Legal Description
Synopsis of Franchise and License Agreements
Synopsis of Ground Leases (West Tower and Parking Garage)
Explanation of the Simultaneous Valuation Formula
Qualifications
Kate B. Henriksen
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Radisson Plaza
Location: 815 Main Street
Fort Worth, Texas 76102
Date of Inspection: October 21, 1996
Interest Appraised: Fee simple and leasehold
Date of Value: January 1, 1997
Land Description
Area: +/-2.5 acres, or +/-109,000 square feet
Zoning: H - Business District
Assessor's Parcel Number: Block 111, Lots 2-3; Block 112, Lots 1-16;
Block 114, Lots 9-16; Block 115,
Lots 1-8 & 13-16
Improvements Description
Age: Constructed in 1921
Property Type: Full-service
Guestrooms: 517
Number of Stories: 15 (West Tower) and 13 (East Tower)
Food and Beverage Facilities: Texas Cafe (178 seats); Cactus Grill
(145 seats); Skylight Lounge (40 seats)
Meeting Space: Eight rooms totaling +/-62,738 square feet
Parking: Leased underground parking garage across
from the West Tower; parking garage on the
first five levels of the East Tower
Summary of Value Parameters
Highest and Best Use (as if vacant): Hold for future development
Highest and Best Use (as improved): Lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Three
Stabilized Year: 1999
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 25 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22.0%
Terminal Capitalization Rate: 11.5%
Brokerage and Legal Fees: 3.0%
Holding Period: Ten years
Calculated Discount Rate: 14.3%
Estimates of Value
Income Capitalization Approach: $26,171,000
Sales Comparison Approach: $25,200,000 - $28,300,000
Cost Approach (Replacement Cost): $46,700,000
Market Value Conclusion: $25,850,000
Market Value Conclusion per Room: $50,000
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in
approximately 50,000 square feet (1.15 acres) of land improved with a 517-room,
full-service lodging facility known as the Radisson Plaza. This analysis also
considers the leasehold interest in a +/-10,000-square-foot (0.23-acre) parcel
improved with a portion of the hotel, and the leasehold interest in an
underground parking garage situated on roughly +/-49,000 square feet (1.12
acres) of land. The hotel opened in 1921, and a second guestroom tower was added
in 1983. In addition to guestrooms, the subject property contains a fitness
room, an outdoor swimming pool, a gift shop, two restaurants, a lounge, roughly
62,738 square feet of meeting space, a leased beauty shop, a leased flower shop,
a leased airline ticket office, and typical back-of-the-house facilities.
The hotel's West Tower occupies the entire block bounded by Eighth Street to the
south, Commerce Street to the east, Seventh Street to the north, and Main Street
to the west. The East Tower is situated directly across Commerce Street from the
West Tower, and the underground parking garage is located directly south and
southwest of the West Tower. Municipal jurisdictions governing the property
include the City of Fort Worth, Tarrant County, and the State of Texas. The
hotel's civic address is 815 Main Street, Fort Worth, Texas, 76102.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Fort
Worth area for the purpose of estimating the market value of the subject
property. Market value is defined by the Office of the Comptroller of the
Currency (OCC), 12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
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HVS International, Mineola, New York Nature of the Assignment 4
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Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under
conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what
they consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for the use of Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by the Ashford Financial
Corporation or related entities. The information presented in this report should
not be disseminated to the public or third parties without the express written
consent of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by the Ashford Financial Corporation, the Remington
Hotel Company, and the subject property's management representatives. Unless
noted otherwise, we have inspected the competitive lodging facilities and
analyzed the sales summarized in this report, and our value conclusion is based
on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements (including the furniture, fixtures, and equipment), as well as the
leasehold interest in a portion of the property and in the underground parking
garage (which is situated on two other parcels). The subject property is
appraised as a going concern (i.e., an open and operating facility).
The property rights appraised are the fee simple interest in the land and
improvements, including the furniture, fixtures, and equipment, and the
(1)Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
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leasehold interest in the improvements, including the furniture, fixtures, and
equipment. The fee simple interest is defined as "absolute ownership
unencumbered by any other interest or estate subject only to the four powers of
government."(1) The leasehold interest is defined as "the right to use and
occupy real estate for a stated term and under certain conditions; conveyed by a
lease."(2)
Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(3) Hotels,
Motels and Restaurants: Valuations and Market Studies,(4) The Computerized
Income Approach to Hotel/Motel Market Studies and Valuations,(5) and Hotels and
Motels: A Guide to Market Analysis, Investment Analysis, and Valuations.(6)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
(1) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 177.
(3) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(4) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(5) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(6) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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Ownership, Franchise, and Management
A photocopy of the subject property's legal description, which was provided by
the Ashford Financial Corporation, is presented in the Addenda to this report;
the appraisers assume no responsibility regarding the accuracy of this document.
The portion of the subject property now referred to as the West Tower opened in
1921 with close to 800 rooms. The hotel's East Tower was constructed in 1983.
Today, the West Tower contains 292 guestrooms, and the East Tower houses 225
units. The property operated as an independent facility known as the Hotel Texas
for many years; Hyatt assumed operation at around the time the East Tower
opened. In 1991, the property acquired a franchise affiliation with Radisson; at
that time, the hotel was owned by Aetna Insurance Company and operated by Rank
Hotels North America. The hotel was sold to Fort Tower I Associates Hotel
Limited Partnership and Fort Tower II Associates Hotel Limited Partnership on
June 13, 1994 for an all-cash purchase price of $8,650,000. The limited
partnerships noted above are entities controlled by the Ashford Financial
Corporation; Remington Hospitality, Inc., another subsidiary of Ashford, began
operating the property on or about June 1, 1994.
The subject property operates under a franchise agreement with Radisson; this
agreement expires in 2001. The hotel is managed by Remington Hospitality, Inc.,
and an abstract of this contract is presented in the Addenda to this report. For
the purpose of this appraisal, we assume the continued ownership of the subject
property by the Ashford Financial Corporation and operation by Remington
Hospitality, Inc. as a Radisson Plaza.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Kate B. Henriksen on October 21, 1996.
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HVS International, Mineola, New York Description of the Land, Improvements 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and
Topography
The subject site consists of portions of four blocks of land in the Fort Worth
central business district. The hotel's West Tower occupies the entire block
formed by Eighth Street to the south, Commerce Street to the east, Seventh
Street to the north, and Main Street to the west. The East Tower lies on the
western half of the block formed by Commerce Street to the west, Seventh Street
to the north, Calhoun Street to the east, and Eighth Street to the south. The
leased underground parking garage is located in the western half and the
northeastern quadrant of the block formed by Eighth Street to the north,
Commerce Street to the east, Ninth Street to the south, and Main Street to the
west, as well as the eastern half of the block formed by Eighth Street to the
north, Main Street to the east, Ninth Street to the south, and Houston Street to
the west. Municipal jurisdictions governing the property include the City of
Fort Worth, Tarrant County, and the State of Texas.
According to surveys performed by the Tarrant County Tax Assessor's Office, the
subject site totals approximately +/-109,000 square feet (or +/-2.5 acres), and
is regular in shape; taken together, the various parcels form a rough "S" shape.
The site is generally level. Primary vehicular access to the Radisson is
provided by Eighth Street and Commerce Street. Overall, the property's size and
topography appear suitable for hotel use. The site is fully developed, and there
is no excess land available for expansion.
Easements
The subject property is encumbered by a number of easements regarding the tunnel
that extends from the parking garage to the West Tower (under Eighth Street) and
the hotel canopy that spans Eighth Street between
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HVS International, Mineola, New York Description of the Land, Improvements 8
Zoning, Taxes, and Neighborhood
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Commerce Street and Main Street. We assume that these easements will not affect
the use or marketability of the subject property. A copy of the easement
agreement is included with the legal description, and is presented in the
Addenda to this report.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is accessible to a variety of local, county, state, and interstate highways.
Interstate 30 is located approximately 12 blocks south of the Radisson; this
roadway traverses the center of Fort Worth on an east-west axis and connects the
city with Dallas before terminating in Little Rock, Arkansas. North-south
transportation from Laredo, Texas to Duluth, Minnesota is available via
Interstate 35W, which also crosses the center of Fort Worth. Access to
Dallas-Fort Worth International Airport from the downtown district is provided
by Texas State Highway 121 (the Airport Freeway), and U.S. Route 287 (the Martin
Luther King, Jr. Freeway), which extends from downtown Fort Worth to Interstate
820 (in the southeastern portion of the city). Interstate 20, which crosses the
southern portion of Fort Worth, extends from west Texas to Birmingham, Alabama.
Interstate 820 forms a horseshoe around the area and intersects I-20 at the
city's eastern and western boundaries. This network of highways links downtown
Fort Worth with the cities and commercial concentrations throughout the
Dallas/Fort Worth metropolitan area. Overall, regional access to the Radisson
Plaza is favorable.
Local Access and Visibility
Local access to the subject property is only average. Many of the streets in
downtown Fort Worth carry one-way traffic, necessitating a rather circuitous
route for many of the hotel's guests. Although parking in the downtown area is
scarce, the Radisson does offer valet parking as well as garages across Eighth
Street from the West Tower and in the first five floors of the East Tower. By
virtue of the hotel's height, the property is highly visible; however, its
signage is placed on the porte cochere and along the skyway, which are too low
to be seen until motorists have reached Commerce Street.
Airport Access
Dallas-Fort Worth International Airport is located roughly 20 miles northeast of
the Radisson, within an approximate 25-minute drive. To reach the hotel from the
airport, motorists take Highway 121 to its terminus just north of the downtown
district. As a result of the proliferation of one-way local routes, motorists
must then travel west on Weatherford Street before traveling south on Houston
Street for approximately nine blocks to Ninth Street. Travelers then turn east
(or left) on Ninth Street and north (or left) on
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Zoning, Taxes, and Neighborhood
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Commerce Street and continue to the Eighth Street intersection. Guests also have
the option of using a shuttle service for a minimal fee.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-1 Available Utilities
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Utility Provider
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Water Forth Worth Water
Electricity TU Electric
Telephone MCI
Sewer Fort Worth Water
Gas Lone Star Gas
Steam Fort Worth Water
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of this factor.
Flood Zone
Possible locational hazards include flood potential. According to Flood
Insurance Rate Map Number 48439C0290 H, Panel 290 of 595 (dated August 2, 1995)
as provided by the Federal Emergency Management Agency, the subject property is
located in Flood Zone X. This designation indicates that the hotel is situated
outside of the 500-year flood plain.
Seismicity
Information regarding seismicity was not available, and we assume that the
property is not situated in an area of seismic danger.
Land Conclusion
The subject parcel appears suitable for the operation of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and drawbacks.
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HVS International, Mineola, New York Description of the Land, Improvements 10
Zoning, Taxes, and Neighborhood
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Advantages
o The subject property offers valet parking and two parking garages in a
neighborhood where parking is scarce.
o The hotel enjoys good visibility by virtue of its height.
o The property is located only one block north of the Tarrant County
Convention Center, a primary demand generator.
o The subject property has all necessary utilities in sufficient capacity.
Disadvantages
o The abundance of one-way roads in the hotel's immediate vicinity can
complicate access for motorists.
o The signage is relatively low, limiting travelers' ability to identify the
hotel from a distance.
o The property is located on portions of four separate parcels, thus
limiting the ability to connect the lots (either above or below ground).
The advantages noted above are important locational characteristics. Although
the surrounding infrastructure places some restrictions on the layout of the
improvements, the site is considered suitable for its current use.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by management representatives.
The Radisson Plaza is a full-service lodging facility containing 517 rentable
units, +/-62,738 square feet of meeting space, two restaurants, one lounge, a
fitness room, an outdoor swimming pool, a gift shop, an airline ticket counter,
a beauty shop, and appropriate back-of-the-house facilities. The property opened
in 1921 and an addition was constructed in 1983; reports indicate that the
original structure also underwent an extensive renovation at that time. When the
hotel was acquired by the Ashford Financial Corporation in mid-1994, it was in
extremely poor condition, and a $2,200,000
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renovation was completed subsequent to the sale. This renovation included
replacement of carpets in the guestrooms and hallways, replacement of guestroom
soft goods, installation of new ceramic bathroom tile in 270 units, refinishing
of case goods, and repair and upgrading of the vinyl wall coverings in the
guestroom corridors. Meeting rooms on the third floor also received new
carpeting, vinyl wallcovering, artwork, and lighting. Airwalls in the Crystal
Ballroom were refinished and soundproofed, and a new HVAC system was installed.
The hotel is now judged to be in good condition, and management representatives
report that all building systems are in working order. The hotel operates under
a license agreement with Radisson, and reportedly meets the standards for
lodging facilities of that brand. Based on our inspection and information
provided by management representatives, the following table summarizes the
facilities available at the subject property.
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HVS International, Mineola, New York Description of the Land, Improvements 12
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Table 3-2 Facilities Summary
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Guestrooms (No. of Units)
Kings 246
Double/doubles 259
Suites 12
-----------
Total 517
Food and Beverage Outlets (No. of Seats)
Texas Cafe 178
Cactus Grill 145
Skylight Lounge 40
Meeting and Banquet Rooms (Square Footage)
Grand Crystal Ballroom 13,624
Texas Ballroom 3,192
Continental Room 1,156
Citizens Room 1,847
General Worth Board Room 378
Tarrant Room 378
Metropolitan Room 644
Pavilion Exhibit Hall 41,519
-----------
Total 62,738
Recreational & Other Amenities
Outdoor swimming pool, fitness room, sauna
Parking Spaces
Valet parking, two parking garages
Elevators
Six guest, two service/employee, two kitchen
Laundry
Three washers, four dryers, two folders, one ironer
- --------------------------------------------------------------------------------
Layout and Design
The subject property's West Tower, which was built in 1921, is a 15-story,
brick-covered structure; the 13-story East Tower opened in 1983. The two
buildings are connected at the second story by a skywalk over Commerce Street.
Another skywalk connects the West Tower to a large office building known as
Continental Plaza, which is located directly across Seventh Street from the
Radisson. The West Tower also features three below-ground levels.
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HVS International, Mineola, New York Description of the Land, Improvements 13
Zoning, Taxes, and Neighborhood
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Reports indicate that the West Tower's lower basement levels were once leased as
office space, but they are now vacant. Consideration has been given to finding
another tenant, or renovating this area for use as additional function space.
For the purpose of this analysis, we assume that this space will remain largely
vacant, and that the cost of a renovation sufficient enough to attract a tenant
or to allow the area to be used as meeting space will offset any potential
rental revenue.
The upper basement level of the West Tower features an underground connection to
a parking garage that the subject property leases from the City of Fort Worth.
This level also houses the hotel's maintenance room, laundry, personnel office,
purchasing area, storage areas, an employee cafeteria, the employee entrance,
and a leased flower shop.
The property's two restaurants, the gift shop, a bell stand, and the front desk
are all located on the first floor of the West Tower. The second floor houses
the Crystal Ballroom and the Skylight Lounge. Facilities situated on the third
floor include the Texas Ballroom, the Continental Ballroom, and four small
meeting rooms. Standard guestrooms are situated on the fourth through 12th
floors of the West Tower; there is no designated 13th floor. Plaza Levels, which
offer more upscale guestrooms and suites, occupy the 14th and 15th floors; three
small meeting rooms are also available on the 15th floor. The 16th level of the
West Tower is currently used for storage, and provides access to the mechanical
areas and the rooftop.
There are no basement levels in the East Tower. Leased areas are located on the
first floor; some of this space is occupied by an American Airlines ticket
office and a beauty shop, and the remainder is vacant. Parking facilities
comprise the remainder of the first floor as well as the second through fifth
floors of the East Tower. In addition to guestrooms, the sixth floor houses the
hotel's swimming pool, the fitness center and sauna, and a small vending room.
Guestrooms occupy the seventh through 14th floors. Like the West Tower, the East
Tower has no designated 13th floor.
Lobby
The lobby is the located on the ground level of the southern portion of the West
Tower. The main entrance, on Eighth Street, provides entry into the lobby, and
access to the lobby is also available from Main Street. Upon entering the lobby
from Eighth Street, the concierge and front desk are to the right. One set of
guestroom elevators is located next to the front desk. An escalator to the
second floor is situated to the left as one enters the lobby from the main
entrance. The two-story lobby was refurbished in 1994,
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HVS International, Mineola, New York Description of the Land, Improvements 14
Zoning, Taxes, and Neighborhood
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before the current owners purchased the property, and it appears to be in good
condition.
Food and Beverage Outlets
Three food and beverage outlets are available at the Radisson: the Texas Cafe,
the Cactus Grill, and the Skylight Lounge. The Texas Cafe is a 178-seat
restaurant, located across the lobby from the main entrance of the hotel. It
serves breakfast and lunch, and offers a buffet during both periods. Lunch and
dinner are available in the 145-seat Cactus Grill, which serves American and
Southwestern cuisine. This facility is located in the northwest corner of the
West Tower, and can be reached from the hotel interior or from Main Street. The
two restaurants were refurbished in 1994, and appear to be fairly well
maintained.
The Skylight Lounge is located on the second floor, and is open only during
periods of peak demand. When the Skylight Lounge is not open, the Cactus Grill
is a popular alternative for beverage service. In 1994, the Skylight Lounge
received new soft goods, carpet, and some new furniture, and the remaining
furniture was refinished. The lounge is not enclosed, and by virtue of its
location near the Crystal Ballroom, many guests congregate in this space before
and after meetings even when beverage service is not available.
Meeting and Banquet Space
Function space is concentrated on the second and third floors of the West Tower
and on the garage level. The subject property has roughly 62,738 square feet of
meeting space, the bulk of which is housed in the 41,519-square-foot Pavilion
Exhibit Hall. This is a unique space that is actually part of the parking
garage, it but can be paneled and floored for use as meeting space. It is also
equipped with adequate lighting and air conditioning. Although the Pavilion
Exhibit Hall does not receive frequent use, management representatives indicate
that it is a unique amenity that other hotels in the market do not provide.
The 13,624-square-foot Crystal Ballroom is the largest facility of its type in
Fort Worth, and it can accommodate up to 1,200 people banquet-style. A smaller
facility known as the Texas Ballroom is located on the third floor, along with
four additional meeting rooms. The 15th floor of the West Tower also houses
three small meeting rooms.
Although an extensive renovation of the meeting space was carried out in late
1994 and early 1995, these areas appear to be in only fair condition. Carpets in
the Crystal Ballroom have small stains and are worn in places,
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HVS International, Mineola, New York Description of the Land, Improvements 15
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and some of the wallcoverings are torn. In 1996, the ceiling of the Crystal
Ballroom was repainted, brass moldings were placed on the partitions, and the
banquet chairs were upgraded. The pre-function space received new paint, wall
vinyl, and artwork in 1996, and appears to be in good condition.
Guestrooms are slightly larger than standard units, and feature a typical layout
and design. Most units contain the following furniture and fixtures.
o One king bed or two double beds
o Two nightstands
o Two wall lamps
o Clock/radio
o Telephone
o Small dresser
o Color television
o Desk with two chairs and a small lamp
o Artwork
o Vinyl wallcovering
o Hard-wired smoke detector
o Individual heating, ventilation, and air conditioning control panel
o Wall-mounted mirror
o Closet and vanity area
o Bathroom with tile floor, tile walls, tub/shower combination, commode, and
one counter-style sink
Overall, the guestrooms and corridors appeared to be in good condition at the
time of our inspection. In mid-1995, carpets were replaced in all guestrooms and
corridors, guestroom soft goods were replaced, new ceramic tile was installed in
270 bathrooms, and case goods were refinished.
Management has set aside approximately 70% of the guestrooms for non-smoking
guests; this type of amenity costs very little and requires no structural
changes. We expect that the number of rooms allocated for this
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HVS International, Mineola, New York Description of the Land, Improvements 16
Zoning, Taxes, and Neighborhood
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purpose will be increased or reduced depending on demand and guest response.
Recreational Amenities
Recreational amenities at the subject property consist of a fitness room, a
sauna, and an outdoor swimming pool. These facilities are located on the sixth
floor of the East Tower.
Back-of-the-House Space
The subject property has one kitchen located in the northern portion of West
Tower's main floor. Although the two restaurants have direct kitchen access, the
meeting areas do not. Food and supplies for the meeting rooms must be
transported up service elevators to service areas adjacent to the meeting space;
this creates some problems in terms of keeping food hot, there is insufficient
elevator capacity when there are numerous events being staged at once.
The bulk of the back-of-the-house space is located on the upper basement level
of the West Tower, including maintenance, the laundry, the personnel office,
purchasing, storage rooms, and employee areas. This configuration causes some
problems for the housekeeping department. All laundry equipment is located in
the basement level of the West Tower, and because the East Tower contains no
basement and is not equipped with employee elevators, the housekeeping staff
must transport laundry from the East Tower guestrooms down the guest elevators,
across the skywalk between the buildings, and down the employee elevators in the
West Tower to the basement. To help ease this problem, all guestroom floors are
equipped with housekeeping closets. The subject property's main administrative
offices are located on the second floor of the East Tower, just across the
skyway from the West Tower.
Vertical Transportation
Vertical transportation is provided by six guest elevators (three in each
tower), two employee/service elevators in the West Tower, and two kitchen
elevators.
Heating, Ventilation, and Air Conditioning
Heating, ventilation, and air conditioning (HVAC) is provided to the guestrooms
by a centralized two-pipe system that employs three boilers and three chillers.
Public areas use a centralized system with 28 air handling units. As a result of
the property's age, the operating systems often require extensive maintenance.
Management representatives indicate that these systems are now in working
condition, although one of the chillers is scheduled to be overhauled in the
next year.
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HVS International, Mineola, New York Description of the Land, Improvements 17
Zoning, Taxes, and Neighborhood
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Fire Protection
The subject property is equipped with a partial sprinkler system. Single-station
smoke alarms are located in all guestrooms, public spaces, and employee areas,
and are wired to both the front desk and the fire department.
Security
Management representatives indicate that there are no unusual safety or security
concerns at the Radisson Plaza.
Asbestos
According to an independent analysis performed by Entrix, Inc. and provided to
us by the Ashford Financial Corporation, some asbestos may be present in the
subject property's improvements; however, we are not qualified to evaluate the
severity of this condition. For the purpose of this analysis, we assume that all
asbestos problems have been remedied or are not serious in nature; however, the
reader should be advised that any costs associated with asbestos removal or
containment could have an unfavorable impact on the hotel's market value. We
suggest that interested parties initiate an investigation regarding current
asbestos levels and the capital expenditures that may be necessary to remove any
asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Improvements Conclusion
Overall, the subject property's improvements appear appropriate for hotel use,
although some functional obsolescence is apparent as a result of the property's
age and design. One example, the East Tower does not have a service elevator,
and access to the laundry room from the East Tower is difficult. In addition,
the parking garage in the East Tower contains no elevators and provides access
to the hotel only from the first floor. Thus, guests who park on the upper
levels of the garage must navigate several flights of stairs between the hotel
entrance and their vehicles.
For the purpose of this appraisal, we assume that the subject property will be
maintained in its current condition throughout the ten year holding period.
Specifically, our analysis is predicated on the fact that management will employ
standard preventive maintenance measures, and that a reserve for replacement
fund will be established to cover the cost of any future capital expenditures
that may be necessary.
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HVS International, Mineola, New York Description of the Land, Improvements 18
Zoning, Taxes, and Neighborhood
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Zoning
According to the City of Fort Worth's zoning regulations, the subject property
is zoned as follows.
H - Business District
The purpose of the H zoning designation is to provide a specific central
business district for more intense application of all commercial uses permitted
in other commercial districts, with less restrictive height regulations.
Permitted uses in this zoning category include offices and businesses,
apartments, garages, publishing and printing buildings, as well as all uses
allowed in other commercial districts (including hotels). Based on this
information, the subject property appears to conform to local zoning
regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning ordinances, building codes, and
all other applicable regulations. Our zoning analysis should be verified before
any physical changes are made to the hotel.
Assessed Value and Taxes
Property tax is one of the primary revenue sources of municipalities. Based on
the concept that the tax burden should be distributed in proportion to the value
of all properties within a taxing jurisdiction, a system of assessments is
established. Theoretically, the assessed value placed on each parcel bears a
definite relationship to market value, so properties of equal market value will
have similar assessments and properties with higher and lower values will have
proportionately larger and smaller assessments. Depending on the taxing policy
of the municipality, property taxes can be based on the value of the real
property or the value of the personal property and the real property. Because
the objective of assessed value is to maintain a specific value relationship
among all properties in a taxing jurisdiction, comparable hotel assessments
should be evaluated to determine whether the subject property's assessed value
is equitable.
The taxing jurisdiction governing the subject property assesses both real and
personal property. There is no equalization rate, so the assessed value ratio is
reported to be approximately 100% of market value. It is our understanding that
properties are reassessed during each even-numbered year. The following table
outlines the assessments of the subject property and two comparable hotels in
Tarrant County.
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HVS International, Mineola, New York Description of the Land, Improvements 19
Zoning, Taxes, and Neighborhood
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Table 3-3 Assessed Value of Comparable Hotels
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Total Assessment Assessment per Room
------------------------- -------------------------
No. of
Hotel Rooms Land Improvements Land Improvements
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Subject Property 517 $2,400,000 $8,767,278 $4,642 $16,958
Worthington 504 6,280,000 10,220,000 12,460 20,278
Remington 300 1,000,000 3,242,218 3,333 10,807
Source: Tarrant County Assessor's Office
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Based on the information presented in the previous table, the assessed values of
the subject property's land and improvements fall between the range indicated by
the comparable properties. The tax rates applicable to the Radisson Plaza are
presented in the following table.
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Table 3-4 Tax Rates Applicable to the Subject Property
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Tax Rate
per $100 of
Jurisdiction Assessment
- ---------------------------------------------------------------
City of Fort Worth $0.38
Fort Worth School District 1.46
Tarrant County 0.26
Other 0.56
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Total $2.66
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The subject property's 1996 tax burden is calculated as follows.
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Table 3-5 1996 Assessed Value and Tax Burden
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<TABLE>
<CAPTION>
Block 111 Block 112 Block 114 Block 115 Total
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Land $600,000 $1,800,000 $0 $0 $2,400,000
Improvements 2,679,458 5,567,820 280,000 240,000 8,767,278
Personal Property 0 0 0 0 2,258,402
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Total 3,279,458 7,367,820 280,000 240,000 13,425,680
1996 Tax Rate 2.66 2.66 2.66 2.66 2.66
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Tax Burden (Payable 1/97) $87,234 $195,984 $7,448 $6,384 $357,123
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</TABLE>
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HVS International, Mineola, New York Description of the Land, Improvements 20
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The following table shows how tax rates in the subject property's jurisdiction
have changed since 1991.
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Table 3-6 Historical Tax Rates
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Tax Rate per $1,000 Percent
Year of Assessment Change
- --------------------------------------------------------------------
1991 $2.69 ---
1992 3.31 22.7%
1993 2.93 (11.5)
1994 3.01 2.9
1995 2.98 (1.0)
1996 2.66 (10.7)
Avg. Annual
Comp. Change,
1991-96 (0.0)%
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Although tax rates declined by 10.7% in 1996, there was a reassessment, and all
of the comparable properties that we investigated were reassessed at levels
ranging from 7.8% and 49.2% higher than previously. Consequently, the subject
property's tax burden rose despite the drop in the tax rate. We also note that
although there have been annual fluctuations in the tax rate since 1991, they
have remained relatively stable between 1991 and 1996. For the purpose of this
appraisal, we assume that the subject property's tax burden will increase at the
underlying inflation rate of 3.5% annually throughout the projection period,
yielding the following forecast.
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Table 3-7 Forecast of Property Tax Expense
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1997 1998 Stabilized
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Projected Property Taxes (+000) $357 $370 $383
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
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HVS International, Mineola, New York Description of the Land, Improvements 21
Zoning, Taxes, and Neighborhood
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The Radisson is situated in downtown Fort Worth, Texas; the downtown district is
situated on a bluff just southeast of a bend in the Trinity River. The
neighborhood surrounding the subject property is characterized primarily by
commercial office buildings, small retail outlets, restaurants, hotels, and
parking facilities. The Tarrant County Convention Center is located just south
of Ninth Street and approximately one block south of the hotel, between Commerce
and Houston Streets.
Immediately across Eighth Street from the subject property's West Tower is a
plaza that covers the underground parking garage that the hotel leases from the
city. A small office building is located on the southeastern corner of the
plaza; this building is home to the Moncrief Oil Company. Immediately across
Eighth Street from the East Tower are a Greyhound bus station and a small office
building known as Winfield Place.
Houston and Main Streets are the main retail corridors in downtown Fort Worth.
Across Main Street from the West Tower are Del Frisco's Steakhouse and the TU
Electric office building. Continental Plaza, a multi-story office building
housing companies such as Overton Bank and Trust, A.G. Edwards, and Burlington
Northern - Santa Fe is located immediately across Seventh Street from the
subject property's West Tower. As noted earlier, a skywalk connects this
building to the second story of the Radisson's West Tower.
The competitive hotels in the downtown area are located within blocks of the
subject property. The Worthington is situated on Main Street, approximately six
blocks north of the Radisson Plaza. The Remington is located on Commerce Street,
approximately two blocks northeast of the East Tower, and the Ramada Downtown is
located south of the convention center on Commerce Street, roughly nine blocks
southeast of the Radisson Plaza.
Just north of the subject property is Sundance Square, a 14-block, multi-use
development spearheaded by the Bass Brothers. This district offers cinemas,
theaters, restaurants, and a variety of retail outlets. Additional office space
and the Nancy Lee & Perry R. Bass Performance Hall are also under construction
in this district.
Overall, the subject property's location near the convention center and various
office buildings allows the hotel to draw an adequate share of demand from the
meeting and group and commercial market segments. The area is widely perceived
as being safe, and pedestrians have no difficulty reaching
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HVS International, Mineola, New York Description of the Land, Improvements 22
Zoning, Taxes, and Neighborhood
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various destinations in the downtown district. Overall, the neighborhood
surrounding the Radisson Plaza appears appropriate for the operation of a
lodging facility.
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HVS International, Mineola, New York Market Area Analysis 23
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property's market area can be defined as the City of Fort Worth; on
a broader scale, the market consists of Tarrant County, the Fort Worth-Arlington
Metropolitan Statistical Area (MSA), and the Dallas-Fort Worth Consolidated
Metropolitan Statistical Area (CMSA). Four counties comprise the Fort
Worth-Arlington MSA: Tarrant, Hood, Johnson, and Parker. The MSA is located in
northcentral Texas, approximately 30 miles west of Dallas, 270 miles northwest
of Houston, and 270 miles northeast of San Antonio. The Dallas-Fort Worth CMSA
is often referred to as the "Metroplex," and has a population of over 4,400,000.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
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AREA MAP
[GRAPHIC OMITTED]
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HVS International, Mineola, New York Market Area Analysis 24
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adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
Population
Between 1980 and 1995, the populations of the Fort Worth MSA and Tarrant County
rose at average annual compounded rates of 2.7% and 2.8%, respectively, while
the CMSA, the state, and the nation all registered slower growth rates. The
county's population is expected to increase by 2.7% annually from 1995 through
the year 2000, while the MSA is expected to achieve a slightly lower rate of
growth of 2.6%. Both of these rates are higher than those projected for the
CMSA, the state, and the nation. We find that the rate of population growth
generally establishes a minimum rate of increase for commercial hotel demand;
this observation also holds true for the meeting and group segment if a majority
of the meetings are business-oriented.
Retail Sales
Trends in retail sales reflect changes in population as well as the propensity
of residents and visitors to purchase retail goods. Like population trends,
retail sales have no direct correlation with hotel room night demand, although
they do tend to gauge the economic health and vitality of the market.
According to Woods and Poole Economics, retail sales growth in the Fort Worth
MSA outpaced that of the CMSA, the state, and the nation between 1980 and 1995,
although the statewide gain was higher than that of the MSA from 1990 to 1995.
Retail sales in both Tarrant County and the Fort Worth MSA are projected to
increase at an average annual compounded rate of 2.6% between 1995 and the year
2000; this compares favorably to the 1.8%, 1.5%, and 0.9% annual increases
anticipated for the CMSA, the state, and the nation, respectively.
Personal Income
Trends in personal income reflect the ability of residents to spend money in the
local economy. Between 1980 and 1995, personal income rose at an
inflation-adjusted average annual compounded rate of 3.6% in both Tarrant County
and the Fort Worth MSA; in both areas, this rate dropped to 3.0% between 1990
and 1995. By comparison, the Dallas-Fort Worth CMSA achieved historical personal
income growth of 3.5% annually between 1980 and 1995 and 3.1% between 1990 and
1995. Long-term growth in the State of Texas and the United States was lower, at
rates of 2.5% and 2.3%, respectively. Projections indicate average annual
compounded gains of 3.8% in the county and the MSA from 1995 through the end of
the decade, which is
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HVS International, Mineola, New York Market Area Analysis 25
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again higher than the levels anticipated for the CMSA, the state, and the nation
as a whole.
Work Force Characteristics
Although Woods and Poole Economics reports that total employment in the Fort
Worth MSA increased at an average annual compounded rate of 3.2% from 1980 to
1995, the 1.9% growth rate reported from 1990 to 1995 was noticeably lower. This
is partially attributable to the national recession that marked the early 1990s,
as well as military cutbacks at Carswell Air Force Base. In 1995, services was
the largest sector in the MSA, accounting for approximately 29.3% of all
employment, followed by trade (at 24.3%), manufacturing (at 13.6%), and
government (at 11.2%).
Forecasts indicate that employment growth in the Fort Worth MSA is expected to
remain consistent with short-term historical trends, and an average annual
compounded increase of 1.9% is anticipated between 1995 and the year 2000. The
services sector is projected to expand slightly (to roughly 30.0% of total
employment), again followed by trade (at 24.4%), manufacturing (at 12.8%), and
government (at 10.9%) as of the year 2000. Because the local economy is not tied
to the prosperity of any single sector, the impact of normal business cycles is
cushioned.
The major employers in Forth Worth represent a cross section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in service
industries. The following table outlines some of the major employers in Tarrant
County.
================================================================================
Table 4-1 Major Employers
- --------------------------------------------------------------------------------
No. of
Firm Product Employees
- --------------------------------------------------------------------------------
American Airlines Commercial Airlines 30,000
Lockheed Martin Tactical Aircraft Systems Aircraft Manufacturing 12,000
Bell Helicoptor Textron Helicoptor Manufacturing 6,262
Harris Methodist Health Systems Health Care 5,115
Radio Shack Retail Electronics 4,310
IBM Computers, Software 3,000
Burlington Northern - Santa Fe Corp. Transportation 2,500
Alcon Laboratories Pharmaceutical 2,300
Tandy Corporation Electronics 2,300
Southwestern Bell Telecommunications 2,100
Source: Fort Worth Chamber of Commerce
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HVS International, Mineola, New York Market Area Analysis 26
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Office Space
According to Downtown Fort Worth, Inc., a semi-private, non-profit corporation,
the inventory of office space in downtown Fort Worth totaled 7,701,192 square
feet at year-end 1995. Occupancy rates are much higher for better-quality space,
as illustrated by the following table.
================================================================================
Table 4-2 Office Space - Downtown Fort Worth
- --------------------------------------------------------------------------------
Average
Occupancy Lease Rate
Type Rate per Sq. Ft.
- --------------------------------------------------------------------------------
Class A 87.95% $14.91
Class B 84.22 10.92
Class C 68.98 9.43
Class D 33.58 10.72
- --------------------------------------------------------------------------------
According to CB Commercial, there are two office buildings under construction in
downtown Fort Worth, but the square footage of these projects is unknown.
Airport Traffic
The subject property's market is served by Dallas-Fort Worth International
Airport, which is located within 20 to 25 miles of downtown Fort Worth. At
present, this facility is a major hub for American Airlines.
Convention Center
A multi-use arena known as the Fort Worth/Tarrant County Convention Center
opened in the late 1960s. This facility contains approximately 145,000 square
feet of exhibit space, an arena with 13,000 permanent seats, and a performance
hall seating roughly 3,000 people. From late October through March, the arena is
home to the Central Hockey League's Fort Worth Fire; concerts and other special
events are also held at this venue. When the center is hosting large
conventions, the arena floor may be used to provide 26,000 square feet of
additional exhibit space.
Coopers and Lybrand recently completed a feasibility study regarding future
plans for the convention center, but the results of this analysis have not been
made public. Reportedly, a few of the options that were considered include the
renovation and/or the reconfiguration of space in the convention center;
expansion of the facility; transfer of ownership from the county to the city, to
allow the convention center to attract groups that would generate more hotel
room nights; and the construction of a 400-room hotel. At this point, comments
regarding any of these options are premature. Under any circumstances, it will
be a number of years before plans can be
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finalized, approvals and financing obtained, and construction completed;
consequently, our analysis does not consider any potential changes to the
convention center.
Tourist Attractions
Although Fort Worth is not a primary tourist destination, it does offer a number
of attractions. The Stockyards, an area situated just north of the downtown
district, provides shopping, dining, and family entertainment in an Old
West-style setting. Sundance Square in downtown Fort Worth offers shopping,
dining, and entertainment alternatives. The Will Rogers Auditorium is the site
of various equestrian shows and rodeos. The area also features the Six Flags
Over Texas amusement park in nearby Arlington, the Fort Worth Zoo, and the Water
Gardens, a 4.3-acre, man-made "garden" of concrete and waterfalls in downtown
Fort Worth.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area experienced above-average historical growth, and
projections suggest a continuation of these trends. The following table
summarizes the economic and demographic trends discussed throughout this
section. All figures that reflect dollar amounts have been adjusted for
inflation, and thus reflect real change. It should be noted that the percent
changes indicated in the following tables are based on unrounded figures, and
thus may not calculate exactly.
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Tarrant County 1980-1995 868.3 1,293.8 2.7%
Fort Worth-Arlington MSA 1980-1995 999.3 1,505.3 2.8
Dallas-Fort Worth CMSA 1980-1995 3,069.1 4,453.0 2.5
State of Texas 1980-1995 14,337.8 18,664.4 1.8
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Tarrant County 1990-1995 1,176.3 1,293.8 1.9
Fort Worth-Arlington MSA 1990-1995 1,367.8 1,505.3 1.9
Dallas-Fort Worth CMSA 1990-1995 4,057.3 4,453.0 1.9
State of Texas 1990-1995 17,045.4 18,664.4 1.8
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Tarrant County 1995-2000 1,293.8 1,474.5 2.7
Fort Worth-Arlington MSA 1995-2000 1,505.3 1,708.0 2.6
Dallas-Fort Worth CMSA 1995-2000 4,453.0 4,900.0 1.9
State of Texas 1995-2000 18,664.4 20,073.0 1.5
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Tarrant County 1980-1995 6,604.3 9,681.9 2.6
Fort Worth-Arlington MSA 1980-1995 7,296.0 10,890.5 2.7
Dallas-Fort Worth CMSA 1980-1995 23,129.6 33,745.4 2.6
State of Texas 1980-1995 97,713.3 124,784.7 1.6
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Tarrant County 1990-1995 8,226.7 9,681.9 3.3
Fort Worth-Arlington MSA 1990-1995 9,194.5 10,890.5 3.4
Dallas-Fort Worth CMSA 1990-1995 28,880.7 33,745.4 3.2
State of Texas 1990-1995 103,868.0 124,784.7 3.7
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Tarrant County 1995-2000 9,681.9 11,019.0 2.6
Fort Worth-Arlington MSA 1995-2000 10,890.5 12,355.3 2.6
Dallas-Fort Worth CMSA 1995-2000 33,745.4 36,925.5 1.8
State of Texas 1995-2000 124,784.7 134,120.1 1.5
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales per Capita
Tarrant County 1980-1995 7,606.1 7,483.5 (0.1)
Fort Worth-Arlington MSA 1980-1995 7,301.0 7,234.6 (0.1)
Dallas-Fort Worth CMSA 1980-1995 7,536.3 7,578.2 0.0
State of Texas 1980-1995 6,815.1 6,685.7 (0.1)
United States 1980-1995 5,900.6 6,719.5 0.9
</TABLE>
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Retail Sales per Capita
Tarrant County 1990-1995 6,993.5 7,483.5 1.4%
Fort Worth-Arlington MSA 1990-1995 6,722.3 7,234.6 1.5
Dallas-Fort Worth CMSA 1990-1995 7,118.1 7,578.2 1.3
State of Texas 1990-1995 6,093.6 6,685.7 1.9
United States 1990-1995 6,244.5 6,719.5 1.5
Projected Retail Sales per Capita
Tarrant County 1995-2000 7,483.5 7,472.9 (0.0)
Fort Worth-Arlington MSA 1995-2000 7,234.6 7,233.7 (0.0)
Dallas-Fort Worth CMSA 1995-2000 7,578.2 7,535.8 (0.1)
State of Texas 1995-2000 6,685.7 6,681.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
Tarrant County 1980-1995 635.6 1,123.9 3.9
Fort Worth-Arlington MSA 1980-1995 681.0 1,224.3 4.0
Dallas-Fort Worth CMSA 1980-1995 2,224.6 3,741.1 3.5
State of Texas 1980-1995 8,606.1 13,050.1 2.8
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
Tarrant County 1990-1995 917.5 1,123.9 4.1
Fort Worth-Arlington MSA 1990-1995 998.5 1,224.3 4.2
Dallas-Fort Worth CMSA 1990-1995 3,173.2 3,741.1 3.3
State of Texas 1990-1995 10,794.4 13,050.1 3.9
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Tarrant County 1995-2000 1,123.9 1,316.8 3.2
Fort Worth-Arlington MSA 1995-2000 1,224.3 1,432.0 3.2
Dallas-Fort Worth CMSA 1995-2000 3,741.1 4,201.1 2.3
State of Texas 1995-2000 13,050.1 14,471.7 2.1
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales per Capita
Tarrant County 1980-1995 732.1 868.7 1.1
Fort Worth-Arlington MSA 1980-1995 681.5 813.3 1.2
Dallas-Fort Worth CMSA 1980-1995 724.8 840.1 1.0
State of Texas 1980-1995 600.2 699.2 1.0
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales per Capita
Tarrant County 1990-1995 779.9 868.7 2.2
Fort Worth-Arlington MSA 1990-1995 730.0 813.3 2.2
Dallas-Fort Worth CMSA 1990-1995 782.1 840.1 1.4
State of Texas 1990-1995 633.3 699.2 2.0
United States 1990-1995 646.3 704.1 1.7
</TABLE>
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Eating and Drinking Place Sales per Capita
Tarrant County 1995-2000 868.7 893.0 0.%
Fort Worth-Arlington MSA 1995-2000 813.3 838.4 0.6
Dallas-Fort Worth CMSA 1995-2000 840.1 857.4 0.4
State of Texas 1995-2000 699.2 721.0 0.6
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Tarrant County 1980-1995 13,277.1 22,505.2 3.6
Fort Worth-Arlington MSA 1980-1995 15,001.8 25,578.9 3.6
Dallas-Fort Worth CMSA 1980-1995 48,595.8 81,662.5 3.5
State of Texas 1980-1995 197,605.0 285,315.1 2.5
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
Short-Term Historical Personal Income (+000,000)
Tarrant County 1990-1995 19,605.8 22,505.2 2.8
Fort Worth-Arlington MSA 1990-1995 22,217.0 25,578.9 2.9
Dallas-Fort Worth CMSA 1990-1995 70,164.2 81,662.5 3.1
State of Texas 1990-1995 248,474.8 285,315.1 2.8
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Tarrant County 1995-2000 22,505.2 27,130.5 3.8
Fort Worth-Arlington MSA 1995-2000 25,578.9 30,753.7 3.8
Dallas-Fort Worth CMSA 1995-2000 81,662.5 94,764.5 3.0
State of Texas 1995-2000 285,315.1 327,233.2 2.8
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Tarrant County 1980-1995 15,291.0 17,395.0 0.9
Fort Worth-Arlington MSA 1980-1995 15,012.0 16,992.0 0.8
Dallas-Fort Worth CMSA 1980-1995 15,834.0 18,339.0 1.0
State of Texas 1980-1995 13,782.0 15,287.0 0.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Tarrant County 1990-1995 16,667.0 17,395.0 0.9
Fort Worth-Arlington MSA 1990-1995 16,243.0 16,992.0 0.9
Dallas-Fort Worth CMSA 1990-1995 17,293.0 18,339.0 1.2
State of Texas 1990-1995 14,577.0 15,287.0 1.0
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Tarrant County 1995-2000 17,395.0 18,399.0 1.1
Fort Worth-Arlington MSA 1995-2000 16,992.0 18,005.0 1.2
Dallas-Fort Worth CMSA 1995-2000 18,339.0 19,340.0 1.1
State of Texas 1995-2000 15,287.0 16,302.0 1.3
United States 1995-2000 16,908.0 18,097.0 1.4
</TABLE>
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Employment - Tarrant County (+000)
Farming 1980-1995 1.5 1.3 (0.8%)
Agricultural Services 1980-1995 1.6 5.7 9.1
Mining 1980-1995 7.6 10.1 1.9
Construction 1980-1995 28.1 39.4 2.3
Manufacturing 1980-1995 101.5 102.8 0.1
Transportation, Communications, & Public Utilities 1980-1995 26.0 58.5 5.6
Total Trade 1980-1995 112.9 183.9 3.3
Wholesale 1980-1995 27.1 40.4 2.7
Retail 1980-1995 85.8 143.5 3.5
Finance, Insurance, & Real Estate 1980-1995 36.5 48.0 1.8
Services 1980-1995 95.5 221.1 5.8
Total Government 1980-1995 57.8 84.6 2.6
Federal Civilian 1980-1995 11.1 14.2 1.7
Federal Military 1980-1995 7.3 5.1 (2.3)
State & Local 1980-1995 39.5 65.2 3.4
Total 1980-1995 469.0 755.4 3.2
Short-Term Historical Employment - Tarrant County (+000)
Farming 1990-1995 1.3 1.3 0.2
Agricultural Services 1990-1995 4.3 5.7 5.8
Mining 1990-1995 10.6 10.1 (1.0)
Construction 1990-1995 32.0 39.4 4.3
Manufacturing 1990-1995 115.0 102.8 (2.2)
Transportation, Communications, & Public Utilities 1990-1995 58.7 58.5 (0.1)
Total Trade 1990-1995 163.6 183.9 2.4
Wholesale 1990-1995 37.8 40.4 1.4
Retail 1990-1995 125.8 143.5 2.7
Finance, Insurance, & Real Estate 1990-1995 47.0 48.0 0.4
Services 1990-1995 176.7 221.1 4.6
Total Government 1990-1995 76.8 84.6 2.0
Federal Civilian 1990-1995 13.6 14.2 1.0
Federal Military 1990-1995 9.4 5.1 (11.5)
State & Local 1990-1995 53.8 65.2 3.9
Total 1990-1995 686.2 755.4 1.9
</TABLE>
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Employment - Tarrant County (+000)
Farming 1995-2000 1.3 1.3 (0.5%)
Agricultural Services 1995-2000 5.7 6.6 2.8
Mining 1995-2000 10.1 11.7 3.0
Construction 1995-2000 39.4 41.7 1.1
Manufacturing 1995-2000 102.8 106.1 0.6
Transportation, Communications, & Public Utilities 1995-2000 58.5 68.3 3.1
Total Trade 1995-2000 183.9 202.4 1.9
Wholesale 1995-2000 40.4 44.2 1.8
Retail 1995-2000 143.5 158.1 2.0
Finance, Insurance, & Real Estate 1995-2000 48.0 51.6 1.5
Services 1995-2000 221.1 249.9 2.5
Total Government 1995-2000 84.6 90.8 1.4
Federal Civilian 1995-2000 14.2 15.2 1.3
Federal Military 1995-2000 5.1 5.2 0.2
State & Local 1995-2000 65.2 70.5 1.6
Total 1995-2000 755.4 830.4 1.9
</TABLE>
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In later sections of this economic study and appraisal, we will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect changes in room night demand in the subject
property's area.
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5. Overview of External Forces Affecting the
U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
Year 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in
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1994 and 1995. During the low-volume years, many sellers remained on the
sidelines waiting for values to increase before placing their properties on the
market. The jump in 1994 is attributable to a number of factors, including the
greater availability of mortgage funds, a return of institutional investors to
the market, and a resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- ------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 4.8 2.6 64.7
1995 4.8 2.8 65.5
1996 5.0 3.0 66.0
1997 5.5 3.5 67.0
1998 6.0 4.0 68.0
1999 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
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This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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Valuation Index Per Room
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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Annual Percent Change
<TABLE>
<CAPTION>
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
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is a good indication that hotel values will return to record levels in the
next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Supply and Demand Trends (STR)
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<TABLE>
<CAPTION>
Year to Date Avg. Annual
------------------ Comp. Change,
1989 1990 1991 1992 1993 1994 1995 1995 1996 1989-95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 2,205 2,205 2,205 2,205 2,205 2,205 2,205 2,205 2,205
Annual Guestroom Supply 804,825 804,825 804,825 804,825 804,825 804,825 804,825 535,815 535,815
Percent Change -- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -- 0.0% 0.0%
Room Night Demand 475,326 508,599 514,522 416,131 467,877 504,423 515,819 363,525 328,503
Percent Change -- 7.0% 1.2% (19.1)% 12.4% 7.8% 2.3% -- (9.6)% 1.4%
Occupancy 59.1% 63.2% 63.9% 51.7% 58.1% 62.7% 64.1% 67.8% 61.3%
Percent Change -- 7.0% 1.2% (19.1)% 12.4% 7.8% 2.3% -- (9.6)% 1.4%
Average Rate $ 60.78 $ 61.53 $ 63.09 $ 59.06 $ 66.10 $ 73.94 $ 80.73 $ 81.46 $ 84.07
Percent Change -- 1.2% 2.5% (6.4)% 11.9% 11.9% 9.2% -- 3.2% 4.8%
RevPAR $ 35.90 $ 38.88 $ 40.33 $ 30.54 $ 38.43 $ 46.34 $ 51.74 $ 55.27 $ 51.54
Percent Change -- 8.3% 3.7% (24.3)% 25.8% 20.6% 11.6% -- (6.7)% 6.3%
</TABLE>
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
It is important to note that during 1989, 1990, and 1991, the Holiday Inn -
Central and the Worthington did not report to Smith Travel Research. In 1991,
the Ramada also failed to contribute to the database; in 1992, the Worthington
was the only hotel that did not participate in the survey. Statistics for 1993,
1995, and year-to-date 1996 reflect all of the competitive hotels, but the 1994
data exclude the Holiday Inn - Central. In the absence of specific information
from all of the market's hotels, the database model assumes that the
non-participating hotels achieved occupancy and average rate levels commensurate
with the average achieved by the contributing properties. Consequently, if the
non-contributing hotels achieve occupancy and/or average rate levels that are
materially different from the marketwide average, the STR data can be skewed.
Specifically, the subsequent inclusion of actual operating results can cause
implied changes in demand or room rates which reflect a change in the weighted
average of the data rather than fluctuations in market activity.
As illustrated by the previous table, guestroom supply in the subject property's
market has remained constant since 1989. As a result of the stable supply, both
room night demand and occupancy increased at an average annual compounded rate
of 1.4% between 1989 and 1995. The 19.1% drop in occupancy in 1992 can be
attributed to a number of factors. First, the national recession and an overall
decline in manufacturing activity (particularly with respect to defense-related
products) had an unfavorable influence on the Fort Worth economy. We also note
that this was the year that the closing of the Carswell Air Force Base was first
announced. The base did close, causing a drop in hotel demand, but it has since
been restructured as a reserve station for several branches of the U.S. Navy. As
indicated above, both the Holiday Inn - Central and the Ramada began to report
their operating results to STR in 1992; because both of these hotels were
achieving occupancy levels that were lower than marketwide averages, the
inclusion of their actual operating data caused contributed to the 19.1%
occupancy decline calculated by STR. In reality, the decline in
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demand is believed to have been less substantial. These factors also influenced
the 6.4% reported decline in average rate in 1992.
Year-to-date August statistics indicate a 9.6% drop in occupancy, from 67.8% in
1995 to 61.3% in 1996. We again note inconsistencies resulting from the
methodology employed by STR, which calculates demand based on the occupancies
reported by each participating hotel rather than on the number of occupied room
nights. Moreover, the computer model does not adapt easily to changes in a
particular hotel's room count. If a certain property reports to STR that it has
added guestrooms, the new guestroom count is then used to calculate historical,
as well as current, demand levels. As a result, the stated demand levels are
skewed, because total demand should be calculated by multiplying the number of
available rooms by the reported occupancy rate.
As a case in point, the room count of the Ramada increased by roughly 170
guestrooms in 1996, with the reopening of units in the south tower that had been
closed following a natural gas explosion a number of years ago. The 1995
occupancy reported by the Ramada Inn (57%) was based on a total of 260 rooms.
The year-to-date 1996 occupancy (45%) is calculated on the basis of 430 rooms,
and because the number of occupied rooms did not increase by the same magnitude
as the number of available rooms, the hotel's occupancy declined substantially.
Smith Travel Research calculates demand based on reported occupancy, resulting
in a significant implied decrease in demand. Our calculations indicate that
demand in the market actually increased by roundly 10%, partially as a result of
the availability of the additional rooms at the Ramada.
Between 1989 and 1995, average rate increased at a healthy average annual
compounded rate of 4.8%. The substantial gain of 11.9% that was recorded in 1993
is partially attributable to the fact that the Worthington (which is the
market's rate leader) did not report to STR prior to that year. Consequently, it
is not surprising that the marketwide average rate rose dramatically when it was
included in the survey, and we do not believe that this jump is reflective of a
significant change in market conditions at that time. Likewise, the 11.9%
increase reported in 1994 was influenced by the fact that the low-rated Holiday
Inn - Central did not report in that year. Nonetheless, the strong increases in
average rate achieved between 1993 and 1995 and again in year-to-date 1996
(periods for which the complete data are available) indicates that the market
has sustained healthy rate growth in the recent past.
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According to the data set forth previously, the marketwide RevPAR rose at an
average annual compounded rate of 6.3% between 1989 and 1995; however, the
numerous inconsistencies in occupancy and average rate growth noted above cast
some doubt on the accuracy of this statistic.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in Forth Worth
area is generated primarily by the following three market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the year-end 1996 distribution of accommodated hotel room
night demand as follows.
================================================================================
Table 6-2 Estimated Year-End 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
----------------------- -------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 128,000 30% 35,000 30%
Meeting and Group 233,000 56 75,000 65
Leisure 60,000 14 6,000 5
- --------------------------------------------------------------------------------
Total 420,000 100% 116,000 100%
- --------------------------------------------------------------------------------
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Meetings and groups dominate the market demand; we estimate this segment's
year-end 1996 contribution at roundly 56% of the overall occupancy. Commercial
guests follow with a 30% share, and leisure travelers contribute the remaining
14%. The Radisson Plaza derives a still larger percentage of its demand from the
meeting and group segment (estimated at 65% as of year-end 1996). Commercial
demand comprises another 30%, and leisure travelers account for only 5% of the
subject property's overall occupancy. Using the distribution of accommodated
hotel demand as a starting point, we will analyze the characteristics of each
market segment in an effort to determine future trends in room night demand.
Commercial Segment
The commercial segment consists of individual businesspeople who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
A number of local, regional, and national firms maintain offices or headquarters
in Fort Worth, and contribute to the area's commercial-oriented hotel demand.
According to the Fort Worth Chamber of Commerce, American Airlines, Lockheed
Martin, Bell Helicopter, Textron IBM, the Burlington Northern - Santa Fe
Corporation, the Tandy Corporation, Bass Companies, and Pier 1 Imports all have
headquarters or regional offices in or near downtown Fort Worth. Moreover, the
potential for demand from this segment is growing. In 1995, with 175 major
announcements, the Fort Worth-Arlington area ranked fourth in the nation in
terms of the number of new and expanded distribution, manufacturing, and
headquarters facilities.
The area north of Fort Worth (near Alliance Airport) is expected to undergo
significant development during the next few years. This region is rapidly
becoming a second commercial center in Fort Worth, and numerous office complexes
and industrial parks have opened recently or are planned. There is also renewed
interest in the downtown district, which forms the
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subject property's primary market, as a result of recent developments such as
Sundance Square and the outlet mall in Tandy Center.
Based on the economic and demographic trends discussed earlier in this report
and our interviews with local hoteliers, we estimate that commercial hotel in
the local market will increase at a strong rate of 3.0% annually through the
year 2000, then stabilize at a growth rate of 2.0% annually in subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
In the subject property's market, meeting and group demand is generated
primarily by events held at the Fort Worth/Tarrant County Convention Center and
groups that use the facilities of local hotels. Management representatives at
the Radisson Plaza indicate that they derive meeting and group demand from
organizations that are using the convention center as well as in-house groups.
Functions typically held at the convention center include religious conventions,
state association meetings, performing arts events, and consumer shows. Events
held at local are similar in profile, and also include corporate and
professional events such as training sessions.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect
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business purpose, the economic considerations that have an impact on commercial
travel also affect meeting and group demand. The exception is non-commercial
meetings, which are tied to the economic factors that influence leisure travel.
It should be noted that meetings and similar events are booked in advance, and
thus growth in this segment tends to lag slightly behind increases in commercial
demand.
Meeting and group demand dominates the Fort Worth area; both the subject
property and the overall competitive market draw a majority of their occupancy
from this segment. As noted earlier in this report, a feasibility study was
completed recently regarding future plans for the convention center, but at the
time of our research the results of this study had not been made public. If the
convention center is expanded or renovated, it is likely to be a number of years
before plans are finalized and all necessary approvals are obtained. Given the
speculative nature of this issue, we estimate that meeting and group demand will
increase at a moderate rate of 2.0% annually through the year 2000, and then
stabilize at a growth rate of 1.5% annually throughout the remainder of the
projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations.
Most leisure demand in the subject property's market is generated by the
Stockyards National Historical District. We also note that the 1.5-mile Texas
Motor Speedway, which will be used for NASCAR racing, is under construction in
north Fort Worth, near Alliance Airport, and its first season scheduled for
1997. The opening of this facility is expected to result in
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an increase in leisure demand in the area. Moreover, the development of Sundance
Square, a retail, restaurant, and entertainment district, is drawing more
visitors into downtown Fort Worth. As part of the Sundance Square development,
private security officers were hired to patrol the streets of the downtown
district; this move is intended to enhance the public's perception of safety and
increase the number of people visiting the area (particularly after working
hours).
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation.
Attendance at local attractions can also form a basis for projections. The
following table outlines 1995 attendance levels at a variety of events in the
Forth Worth area.
================================================================================
Table 6-3 1995 Event Attendance
- --------------------------------------------------------------------------------
Event Attendance
- --------------------------------------------------------------------------------
Southwestern Exhibition & Livestock Show 789,000
Main Street Fort Worth Arts Festival 350,000
Mayfest 350,000
MasterCard Colonial Golf Tournament 140,000
Chisholm Trail Round-Up/Chief Quanah Parker Comanche Pow-Wow 150,000
Pioneer Days 75,000
Fort Worth International Air Show 75,000
Red Steagall Cowboy Gathering & Western Swing Festival 35,000
Source: Forth Worth Convention and Visitors Bureau
- --------------------------------------------------------------------------------
We estimate that leisure demand will increase by 5.0% in 1997 with the opening
of the Texas Motor Speedway; this growth rate is expected to decline to 4.0% in
1998, 3.0% in 1999, and 2.0% in the year 2000 before stabilizing at 1.0%
annually throughout the remainder of the projection period.
Growth Rates
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure,
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we forecast the following average annual compounded market segment growth rates.
================================================================================
Table 6-4 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Commercial 3.0% 3.0% 3.0% 3.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 2.0 1.5 1.5
Leisure 5.0 4.0 3.0 2.0 1.0 1.0
Overall Annual Growth 2.7% 2.6% 2.5% 2.3% 1.6% 1.6%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Fort Worth area is served by
numerous hotels and motels located throughout the region. The Radisson Plaza is
located in the downtown district, which can be characterized as a mid-sized
urban center. Other concentrations of lodging facilities are located in the
northern section of Fort Worth (near Alliance Airport) and along the highways
that serve the region.
We have identified two properties that are considered primarily competitive with
the Radisson Plaza . Including the subject property, these primary competitors
total 1,451 rooms. Four additional lodging facilities are judged to be only
secondarily competitive; although the facilities, rate structures, or market
orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent;
the room count of each secondary competitor has been weighted to reflect this
degree of competitiveness. The aggregate weighted room count of the secondary
competitors is 513.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
estimated year-end 1996 penetration factors; penetration is the ratio between a
specific hotel's operating results and the corresponding data for the market. If
the penetration factor is greater than
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100%, the property is performing better than the market as a whole; conversely,
if the penetration is less than 100%, the hotel is performing at a level below
the marketwide average.
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Table 6-5 Primary Competitors and Aggregate Secondary Competitors
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<TABLE>
<CAPTION>
Square Footage Estimated 1996
---------------------- Market Segmentation Estimated 1995
Meeting ------------------------- ------------------------------
No. of Year Meeting Space Mtg. & Average
Property/Location Rooms Opened Space per Room Comm. Group Leisure Occ. Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Radisson Plaza
815 Main Street 517 1921 62,738* 121 30% 65% 5% 57.0% $72.90 $41.55
Worthington Hotel
200 Main Street 504 1981 55,000 109 35 55 10 67.0 92.00 61.64
Ramada Plaza
1701 Commerce Street 430 1973 20,500 48 20 65 15 59.0 59.00 34.81
- ------------------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 1,451 46,079 93 30% 61% 9% 61.3% $78.39 $48.09
Secondary Competitors 513 32 39 29 56.0 53.45 29.93
- ------------------------------------------------------------------------------------------------------------------------------------
Totals and Averages 1,964 30% 56% 14% 59.8% $71.72 $42.90
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Estimated 1996
-------------------------------------------------------------
Average Occupancy Yield
Property/Location Occ. Rate RevPAR Penetration Penetration
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Radisson Plaza
815 Main Street 61.0% $77.37 $47.20 104.0% 104.9%
Worthington Hotel
200 Main Street 71.0 104.00 73.84 121.0 164.2
Ramada Plaza
1701 Commerce Street 45.0 57.00 25.65 76.7 57.0
- ---------------------------------------------------------------------------------------------
Sub-Totals and Averages 59.7% $83.82 $50.07 101.8% 111.3%
Secondary Competitors 56.0 54.91 30.75 95.5 68.4
- ---------------------------------------------------------------------------------------------
Totals and Averages 58.7% $76.66 $44.97 100.0% 100.0%
- ---------------------------------------------------------------------------------------------
</TABLE>
* Includes 41,519 square feet of exhibition space on the garage level
<PAGE>
COMPETITION MAP
[GRAPHIC OMITTED]
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HVS International, Mineola, New York Lodging Market Supply and Demand 61
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Our survey of the primary competitors shows a representation of two national
chains and one independent hotel. These properties range in size from 430 rooms
(at the Ramada) to 517 rooms (at the subject property). As noted earlier, the
market has a meeting and group orientation. We estimate the year-end 1996 market
segmentation of the primary competitors at 61% meeting and group, 30%
commercial, and 9% leisure.
We estimate the year-end 1996 occupancy and average rate of the primary
competitors at 59.7% and $83.82, yielding RevPAR of $50.07. As indicated by the
previous table, there are significant differences in the occupancies achieved by
the three hotels. The Worthington is clearly the market leader, with an
estimated 1996 occupancy of 71.0%; the subject property follows at 61.0%, and
the Ramada's occupancy of 45.0% trails those of its two competitors by a
substantial margin. Average rate also covers a wide spread, with the Worthington
achieving an estimated 1996 level of $104.00 in 1996, followed by the Radisson
Plaza (at $77.37) and the Ramada (at $57.00). Overall, the subject property is
expected to have achieved an occupancy penetration of 104.0% in 1996, and a
yield penetration of 104.9%. Each primary competitor was inspected and
evaluated, and descriptions of our findings are presented below.
Worthington
The 504-room Worthington Hotel, which is owned by the Bass Brothers, is the
market's premier lodging facility. This four-star, four-diamond property opened
in 1981 as the Americana Hotel, and became the Worthington in 1985. Facilities
and amenities include +/-55,000 square feet of meeting space, four restaurants
and lounges, 24-hour room service, and an athletic club with two tennis courts
and an indoor swimming pool. Typical king rooms measure roundly 381 square feet,
and double/doubles average 414 square feet. The hotel also offers two-level
suites with up to +/-2,141 square feet of space. A complete guestroom renovation
was completed in 1994 at a reported cost of $20,000,000. Meeting space is
scheduled to be renovated and reconfigured in 1997, at an estimated cost of
$10,000,000.
We estimate the Worthington's year-end 1996 market segmentation at 55% meeting
and group, 35% commercial, and 10% leisure. As noted earlier, this property
leads the market in terms of occupancy and average rate, with estimated year-end
1996 levels of 71.0% and $104.00. Consequently, its RevPAR is also the highest
in the market, at $73.84 in 1996.
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Ramada Plaza
In 1973, the Ramada Plaza opened as a 260-room Hilton, and the remaining rooms
were added in 1981. The facility closed in 1991 following a foreclosure, and
reopened in mid-1992 as a Ramada Inn. It was converted to a Ramada Plaza earlier
this year.
As noted previously, a natural gas explosion near the hotel caused some damage
to the south tower in 1986; until recently, the guestrooms in this tower were in
very poor condition and used only during periods of peak demand. At the time of
our research, the Ramada was undergoing a renovation of the guestrooms, meeting
areas, and fitness room, and the guestrooms in the south tower were being
reopened. Facilities at the Ramada now include 430 guestrooms, +/-20,500 square
feet of meeting space, a restaurant and lounge, an indoor swimming pool, and a
fitness room.
As of year-end 1996, we estimate the Ramada's demand segmentation at 65% meeting
and group, 20% commercial, and 15% leisure. As discussed earlier in this
section, the substantial drop in the Ramada's occupancy (from 59.0% in 1995 to
an estimated level of 45.0% in 1996) is primarily the result of the return of
the south tower guestrooms to the rentable inventory. We estimate that average
rate dropped by approximately two dollars, to reach $57.00 in 1996.
Secondary Competitors
Four additional lodging facilities are considered to be secondarily competitive
with the Radisson Plaza. Although the facilities, rate structures, or market
orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The following table summarizes the historical operating characteristics of the
secondary competitors.
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Table 6-6 Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation
Weighted ----------------------------------
Year No. of Percent No. of. Mtg. &
Property Opened Rooms Competitive Rooms Comm. Group Leisure
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Remington Hotel 1981 300 50 % 150 40 % 40 % 20 %
Green Oaks Park Hotel 1965 284 50 142 10 60 30
Holiday Inn - South 1984 247 50 124 50 15 35
Holiday Inn - Central 1973 194 50 97 33 34 33
- -------------------------------------------------------------------------------------------------------------------
Totals and Averages 1,025 513 32 % 39 % 29 %
<CAPTION>
Estimated 1995 Estimated 1996
----------------------------------------- ----------------------------------------------
Average Average
Property Occ. Rate RevPAR Occ. Rate RevPAR
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Remington Hotel 40 % $35.00 $14.00 50 % $40.00 $20.00
Green Oaks Park Hotel 64 51.00 32.64 65 52.00 33.80
Holiday Inn - South 67 64.00 42.88 64 68.00 43.52
Holiday Inn - Central 55 62.00 34.10 40 64.00 25.60
- ----------------------------------------------------------------------------------------------------------------------------
Totals and Averages 56 % $53.45 $29.93 56 % $54.91 $30.75
</TABLE>
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The Remington Hotel was built in 1981, and is located just north of the subject
property. At present, this 300-room hotel is poor condition. The property was
foreclosed upon in 1992, and there have been no capital expenditures since. The
property was purchased in September of 1996, and the new owners reportedly plan
to invest $2,000,000 in renovations in order to reposition the hotel in the
market. The Remington is considered to be 50% competitive with the subject
property.
The 285-room Green Oaks Park Hotel is located on the west side of Fort Worth.
This two-story property was constructed in 1965, and its design includes
exterior corridors. Although the building exterior is dated, the interior
remains in good condition, and the public areas were renovated during the past
two years. By virtue of its large inventory of function space (totaling roughly
13,000 square feet), this property does a large volume of meeting and group
business. The Green Oaks Park Hotel is considered 50% competitive with the
subject property.
The Holiday Inn - South is a 247-room hotel built in 1984. The property
accommodates a considerable number of commercial guests, and its year-end 1996
occupancy and average rate are estimated at 64.0% and $68.00. This hotel is
considered 50% competitive with the Radisson Plaza.
The 192-room Holiday Inn - Central opened in 1973 as a Clarion, and was
converted to its current affiliation in September of 1995. As a result of a
$1,000,000 renovation that kept a number of rooms out of order for part of the
year, this property's year-end 1996 occupancy is estimated at a low 40%. Like
the other secondary competitors, the Holiday Inn - Central is considered 50%
competitive with the subject property.
Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have identified one proposed property in the downtown Fort Worth
market that is expected to compete with the Radisson Plaza directly.
A 203-room Courtyard by Marriott is proposed for the former Blackstone Hotel
building located at 601 Main Street in Fort Worth, two blocks north of the
subject property. The developer, Historic Resources, Inc. of New Orleans, is in
the process of obtaining the necessary approvals. City officials indicate that
they believe these approvals will be secured. Moreover,
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representatives of Marriott International report that the hotel has received all
necessary franchise approvals, and they expect the property to open in the
spring of 1998. For the purpose of our analysis, we assume that the Courtyard
will enter the market on April 1, 1998, and will be 100% competitive with the
Radisson Plaza.
A number of new hotels are planned or under development in northern Fort Worth,
near Alliance Airport and the new Texas Motor Speedway. Because of differences
in location and markets served, these hotels are not expected to compete with
the subject property directly; however, the presence of additional supply is
likely to dilute demand throughout the area to some extent. We have considered
this factor in our selection of the subject property's stabilized occupancy and
average rate.
CONCLUSION
Despite some inconsistent data, the local market appears to have undergone slow
demand growth since 1989. The economic recession had a significant and
unfavorable impact on the market in the early 1990s, but operating performance
has improved recently. There have been no supply additions during the 1990s,
although a Courtyard by Marriott is expected to open in the spring of 1998, and
a number of new projects are proposed for northern Fort Worth, outside of the
Radisson's immediate market area.
Three segments were defined as representing the subject property's lodging
market. After evaluating various economic and demographic trends, we have
arrived at a forecast of growth rates in each segment. Overall, room night
demand is expected to increase at moderate rates throughout the projection
period.
Our analysis indicates that two hotels are directly competitive with the
Radisson Plaza, and four additional lodging facilities compete on a secondary
basis. Overall, we estimate that the competitive market registered a slight dip
in occupancy but healthy average rate growth from 1995 to 1996.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
================================================================================
Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year-to-Date August
-----------------------------
1993 1994 1995 1995 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
Occupancy 62.7% 63.3% 56.7% 56.2% 60.5%
Percent Change --- 1.0% (10.4)% --- 7.7%
Occupancy Penetration 107.9% 101.0% 88.5% 82.8% 98.7%
Average Rate $62.66 $67.44 $72.90 $72.41 $77.74
Percent Change --- 7.6% 8.1% --- 7.4%
Average Rate Penetration 94.8% 91.2% 90.3% 88.9% 92.5%
RevPAR $39.29 $42.69 $41.33 $40.69 $47.03
Percent Change --- 8.7% (3.2)% --- 15.6%
RevPAR Penetration 102.2% 92.1% 79.9% 73.6% 91.3%
Areawide (STR)
Occupancy 58.1% 62.7% 64.1% 67.8% 61.3%
Percent Change --- 7.8% 2.3% --- (9.6)%
Average Rate $66.10 $73.94 $80.73 $81.46 $84.07
Percent Change --- 11.9% 9.2% --- 3.2%
RevPAR $38.43 $46.34 $51.74 $55.27 $51.54
Percent Change --- 20.6% 11.6% --- (6.7)%
</TABLE>
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Between 1993 and 1995, the subject property's occupancy fell from 62.7% to
56.7%, but year-to-date August statistics show a higher level of 60.5% in 1996.
There was a substantial 10.4% decline in occupancy in 1995, which is partially
attributable to the renovation that was underway in that year. Despite this
drop, the hotel has maintained consistently strong average rate increases.
Although the rate gain in 1995 was not enough to offset the decrease in
occupancy, causing RevPAR to decline by 3.2%, year-to-date August figures show
an impressive RevPAR increase of 15.6% in 1996.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365). The total annual number
of room nights occupied in the competitive hotels equates to the market's
accommodated room night demand, as shown in the following table.
================================================================================
Table 7-2 Estimated Year-End 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
----------------------- ------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 128,000 30% 35,000 30%
Meeting and Group 233,000 56 75,000 65
Leisure 60,000 14 6,000 5
- --------------------------------------------------------------------------------
Total 420,000 100% 116,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the
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existing competitive supply, and can be divided into unaccommodated demand and
induced demand. At present, we have no reason to believe that there is any
significant amount of latent demand in the subject property's market. Currently,
there is no presence of latent demand in this market.
Total Room Night Demand
The following table shows the projected annual change in accommodated room night
demand in the subject property's competitive market.
================================================================================
Table 7-3 Total Usable Room Night Demand
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate --- 3.0% 3.0% 3.0% 3.0% 2.0% 2.0%
Accommodated Demand 127,800 131,634 135,583 139,650 143,840 146,717 149,651
Meeting and Group
Growth Rate --- 2.0% 2.0% 2.0% 2.0% 1.5% 1.5%
Accommodated Demand 232,885 237,543 242,294 247,140 252,083 255,864 259,702
Leisure
Growth Rate --- 5.0% 4.0% 3.0% 2.0% 1.0% 1.0%
Accommodated Demand 59,772 62,761 65,271 67,229 68,574 69,260 69,953
Totals
Commercial 127,800 131,634 135,583 139,650 143,840 146,717 149,651
Meeting and Group 232,885 237,543 242,294 247,140 252,083 255,864 259,702
Leisure 59,772 62,761 65,271 67,229 68,574 69,260 69,953
- -------------------------------------------------------------------------------------------------------------------------
TOTAL DEMAND 420,457 431,938 443,148 454,019 464,497 471,841 479,306
Overall Annual Growth --- 2.7% 2.6% 2.5% 2.3% 1.6% 1.6%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 1,964
guestrooms. As noted earlier, a 203-room Courtyard by Marriott is proposed for
construction in downtown Fort Worth, and is expected to open on April 1, 1998.
Because of this mid-year opening, its guestrooms have been phased into the
supply. The following table shows the projected competitive supply of available
rooms and available room nights. To calculate the annual number of available
room nights, the number of available rooms is multiplied by 365.
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Table 7-4 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------
Historical 420,457 716,678 59%
1997 431,938 716,678 60
1998 443,148 772,523 57
1999 454,019 790,773 57
2000 464,497 790,773 59
2001 471,841 790,773 60
2002 479,306 790,773 61
2003 486,895 790,773 62
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
The previous table shows a slight increase in the overall competitive occupancy
during the first projection year. In 1998, when the proposed Courtyard is
scheduled to open, the occupancy is expected to decline. In the year 2000, when
the Courtyard's rooms have been absorbed, occupancy is expected to resume
gradual growth.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, or leisure), or the number of room nights
actually accommodated per year, per room, per market segment. For example, if a
hotel has a commercial competitive index of 190, each room in the property is
occupied 190 times a year by a commercial traveler. The competitive index is
calculated by dividing a hotel's annual accommodated room night demand in a
particular market segment by that property's room count. Competitive indexes
will be used to illustrate each property's position in the market based on its
ability to compete with other local lodging facilities.
Commercial Segment
The 1996 commercial segment competitive indexes in the subject property's market
are estimated to range from 33 to 91. The Worthington is the most competitive
property in this demand segment. The Radisson Plaza maintains an index of 67,
followed by the secondary competitors (at an index of 65). The Ramada trails its
competitors in the this segment by a considerable margin.
As a result of recent renovations and the stabilization of operations following
the recent change in ownership, the subject property's commercial
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segment competitive index is projected to increase to 72 in 1997. The Ramada
Plaza was also renovated recently, and we expect its index to increase to a
stabilized level of 50% in 1998. Because two of the secondary competitors have
been upgraded, the aggregate commercial segment competitive index of the
secondary properties is projected to increase to 70 in 1997. When it opens in
1998, the Courtyard by Marriott is anticipated to assume the role of market
leader in this segment, increasing to a stabilized index of 175 in its third
year of operation. The following table outlines the projected commercial segment
competitive indexes of the area's hotels.
================================================================================
Table 7-5 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Radisson Plaza 67 72 72 72 72 72 72
Worthington Hotel 91 91 91 91 91 91 91
Ramada Plaza 33 45 50 50 50 50 50
Secondary Competitors 65 70 70 70 70 70 70
Courtyard by Marriott 0 0 155 165 175 175 175
- --------------------------------------------------------------------------------
Meeting and Group Segment
Again as a result of recent renovations, we anticipate some changes in the
meeting and group segment competitive indexes of the area hotels. The subject
property is expected to achieve a stabilized level of 150 in 1997, up from 145
in 1996. The Ramada Plaza is expected to register a gain in 1997 before reaching
a stabilized index of 120 in 1998. Upon opening, the Courtyard by Marriott is
expected to register a meeting and group segment competitive index of 50, and
this level is projected to increase to 55 in 1999 and 60 in subsequent years.
Because this hotel will offer a minimal amount of meeting space, it is expected
to trail the market in this segment. The following table sets forth the
competitive indexes in the meeting and group segment.
================================================================================
Table 7-6 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Radisson Plaza 145 150 150 150 150 150 150
Worthington Hotel 143 143 143 143 143 143 143
Ramada Plaza 107 115 120 120 120 120 120
Secondary Competitors 79 79 79 79 79 79 79
Courtyard by Marriott 0 0 50 55 60 60 60
- --------------------------------------------------------------------------------
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Leisure Segment
Recent renovations are also expected to make a number of the area's hotels more
attractive to leisure travelers, and we expect the subject property, the Ramada
Plaza, and the secondary competitors to register increases in their competitive
indexes in this segment. The new Courtyard by Marriott is expected to be
relatively successful in attracting this type of business, and it is projected
to achieve a leisure segment competitive index of 60 by its third year of
operation. The following table illustrates the competitive indexes in the
leisure segment.
================================================================================
Table 7-7 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Radisson Plaza 11 15 15 15 15 15 15
Worthington Hotel 26 26 26 26 26 26 26
Ramada Plaza 25 30 30 30 30 30 30
Secondary Competitors 59 65 65 65 65 65 65
Courtyard by Marriott 0 0 50 55 60 60 60
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights. Multiplying the subject property's projected market share
by the estimated room night demand in each segment results in the following
estimate of room nights captured by the hotel.
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Table 7-8 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001 2002
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial
Demand 131,634 135,583 139,650 143,840 146,717 149,651
Market Share 0.2691 0.2267 0.2140 0.2115 0.2115 0.2115
- ------------------------------------------------------------------------------------------------
Capture 35,426 30,741 29,883 30,424 31,033 31,653
Meeting and Group
Demand 237,543 242,294 247,140 252,083 255,864 259,702
Market Share 0.3237 0.3110 0.3067 0.3054 0.3054 0.3054
- ------------------------------------------------------------------------------------------------
Capture 76,897 75,353 75,791 76,998 78,153 79,325
Leisure
Demand 62,761 65,271 67,229 68,574 69,260 69,953
Market Share 0.1156 0.1038 0.0991 0.0979 0.0979 0.0979
- ------------------------------------------------------------------------------------------------
Capture 7,257 6,774 6,664 6,710 6,777 6,845
</TABLE>
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 517 x 365) produces the
projected occupancy percentage.
================================================================================
Table 7-9 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001 2002
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Room Nights Captured 119,580 112,868 112,338 114,132 115,963 117,823
Available Room Nights 188,705 188,705 188,705 188,705 188,705 188,705
Occupancy 63.37 % 59.81 % 59.53 % 60.48 % 61.45 % 62.44 %
Rounded 63 % 60 % 60 % 60 % 61 % 62 %
</TABLE>
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
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Table 7-10 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
- ---------------------------------------------
1997 63%
1998 60
Stabilized 60
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 62% occupancy in 2002, we have chosen to use a stabilized level of 60%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Competitive Positioning
The Radisson Plaza 's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
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project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the estimated year-end 1996 average rate and RevPAR
of the subject property and its primary competitors.
================================================================================
Table 7-11 Estimated Year-End 1996 Average Rate and RevPAR
- --------------------------------------------------------------------------------
Property Average Rate RevPAR
- --------------------------------------------------------------------------------
Radisson Plaza $77.37 $47.20
Worthington Hotel 104.00 73.84
Ramada Plaza 57.00 25.65
- --------------------------------------------------------------------------------
Average $83.82 $50.07
- --------------------------------------------------------------------------------
We estimate the year-end 1996 average rate of the Radisson Plaza at $77.37,
between the $104.00 level registered by the Worthington and the $57.00 rate of
the Ramada Plaza. It is our opinion that this rate positioning is beneficial;
although the subject property competes well with the Worthington, its
substantially lower rates give it an advantage in terms of more price-sensitive
consumers. Moreover, because the Worthington's estimated 19956 average rate is
more than $25.00 higher than that of the Radisson Plaza, the subject property
has considerable potential for future rate increases before reaching the ceiling
of what the market will bear.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
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prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Between 1993 and 1996, the subject property's average rate has increased at an
average annual compounded level of 7.3%, and there was a 6.1% gain from 1995 to
1996. In light of these historical trends, we project the following average rate
increases.
================================================================================
Table 7-12 Average Rate Forecast
- --------------------------------------------------------------------------------
Marketwide Subject Property
--------------------------- -----------------------------------
Rate Rate Projected
Year Occupancy Increase Increase Average Rate
- --------------------------------------------------------------------------------
Positioned Base --- --- --- $77.37
1997 60 % 4% to 5% 4.0% 80.47
1998 57 1 to 2 1.0 81.28
1999 57 2 to 3 2.0 82.91
2000 59 3 to 4 3.5 85.81
2001 60 3 to 4 3.5 88.81
2002 61 3 to 4 3.5 91.92
- --------------------------------------------------------------------------------
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As illustrated by the previous table, we forecast the subject property's average
rate to increase to $80.47 in the first projection year, reflecting a 4.0% gain
from the estimated year-end 1996 level. Growth is expected to slow to 1.0% in
1998, when the Courtyard by Marriott enters the market, and then increase to
2.0% in 1999, as those rooms are absorbed. In subsequent years, average rate
increases are expected to mirror the underlying inflation rate of 3.5% annually.
The following table presents our forecast of occupancy and average rate through
the stabilized year.
================================================================================
Table 7-13 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
- --------------------------------------------------------
1997 63 % $80.47
1998 60 81.28
Stabilized 60 82.90
- --------------------------------------------------------------------------------
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8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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HVS International, Mineola, New York Highest and Best Use 78
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be to hold for future development. Based on the fact that the
value of the land does not exceed the value of the hotel plus the cost of
demolition, it is our further opinion that the subject property's highest and
best use, as improved, is its current use as a lodging facility.
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9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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HVS International, Mineola, New York Approaches to Value 81
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 82
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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HVS International, Mineola, New York Income Capitalization Approach 83
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total
property yield derived by Method One. Occasionally, the
discount rate may be adjusted slightly based on the
total property yields indicated by recent transactions
involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the
11th-year net income by the terminal capitalization rate
and deducting typical brokerage and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Radisson Plaza is an existing hotel with an established operating
performance, its historical income and expense experience can serve as a basis
for projections. The subject property opened in 1921, and achieved occupancy
levels of 58.5% in 1994 and 56.7% in 1995. The following income and expense
statements were provided by the Ashford Financial Corporation, and are
unaudited. Where applicable, we have reorganized the statements in accordance
with the Uniform System of Accounts for Hotels.
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Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994 (Partial Year)
--------------------------------------------------- ----------------------------------------------
No. of Rooms: 517 517
No. of Occupied Rooms: 106,977 61,094
No. of Days Open: 365 202
Occupancy: 56.7% Amount per Amount per 58.5% Amount per Amount per
Average Rate: $72.91 Percent Available Occupied $70.25 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $7,799 66.7 % $15,086 $72.91 $4,292 64.8 % $8,302 $70.25
Food 2,662 22.8 5,148 24.88 1,536 23.2 2,971 25.14
Beverage 350 3.0 676 3.27 249 3.8 481 4.07
Telephone 303 2.6 587 2.84 195 2.9 377 3.19
Valet Parking 445 3.8 861 4.16 286 4.3 552 4.67
Other Income 140 1.2 271 1.31 67 1.0 130 1.10
Total 11,699 100.1 22,629 109.36 6,625 100.0 12,814 108.43
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,617 20.7 3,128 15.12 818 19.1 1,582 13.39
Food & Beverage 2,290 76.0 4,429 21.40 1,306 73.2 2,527 21.38
Telephone 187 61.5 361 1.75 98 50.1 189 1.60
Valet Parking 91 20.5 176 0.85 52 18.3 101 0.86
Other Income 15 10.6 29 0.14 8 11.4 15 0.13
Total 4,200 35.9 8,123 39.26 2,282 34.4 4,414 37.35
------
- -------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 7,500 64.2 14,506 70.10 4,343 65.6 8,399 71.08
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,340 11.5 2,591 12.52 717 10.8 1,386 11.73
Management Fee 351 3.0 678 3.28 199 3.0 384 3.25
Marketing 751 6.4 1,452 7.02 250 3.8 483 4.09
Franchise Fees 309 2.6 598 2.89 312 4.7 603 5.11
Property Oper. & Maint. 681 5.8 1,317 6.36 348 5.3 674 5.70
Energy 890 7.6 1,721 8.31 455 6.9 879 7.44
Total 4,321 36.9 8,357 40.39 2,280 34.5 4,410 37.32
- -------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 3,179 27.3 6,149 29.71 2,063 31.1 3,989 33.76
- -------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 289 2.5 559 2.70 146 2.2 282 2.38
Insurance 22 0.2 43 0.21 68 1.0 131 1.11
Reserve for Replacement 468 4.0 906 4.38 0 0.0 0 0.00
Equipment Leases 244 2.1 473 2.28 135 2.0 262 2.21
Ground Leases 102 0.9 197 0.95 55 0.8 107 0.91
Total 1,126 9.7 2,178 10.52 404 6.0 781 6.61
===============================================================================================================================
NET INCOME $2,053 17.6 % 3,971 $19.19 $1,659 25.1 % $3,208 $27.15
===============================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
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Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year-to-Date August, 1996 Year-to-Date August, 1995
------------------------------------------------ --------------------------------------------------
No. of Rooms: 517 517
No. of Occupied Rooms: 76,370 70,579
No. of Days Open: 244 243
Occupancy: 60.5% Amount per Amount per 56.2% Amount per Amount per
Average Rate: $77.74 Percent Available Occupied $72.40 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,937 67.9 % $11,484 $77.74 $5,110 68.6 % $9,884 $72.40
Food 1,798 20.6 3,478 23.55 1,570 21.1 3,037 22.25
Beverage 248 2.8 479 3.24 192 2.6 371 2.72
Telephone 330 3.8 639 4.33 191 2.6 369 2.70
Valet Parking 315 3.6 609 4.12 293 3.9 566 4.15
Other Income 114 1.3 220 1.49 90 1.2 174 1.27
Total 8,742 100.0 16,910 114.47 7,445 100.0 14,401 105.49
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,209 20.4 2,339 15.83 1,059 20.7 2,048 15.01
Food & Beverage 1,565 76.5 3,027 20.49 1,452 82.4 2,808 20.57
Telephone 133 40.3 258 1.74 122 63.9 236 1.73
Valet Parking 61 19.3 118 0.80 61 20.9 118 0.87
Other Income 8 7.5 16 0.11 11 11.8 21 0.15
Total 2,977 34.0 5,758 38.98 2,704 36.3 5,230 38.31
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 5,766 66.0 11,152 75.50 4,741 63.7 9,171 67.18
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 839 9.6 1,623 10.99 892 12.0 1,725 12.64
Management Fee 262 3.0 507 3.43 223 3.0 432 3.16
Marketing 444 5.1 859 5.81 492 6.6 952 6.98
Franchise Fees 241 2.8 467 3.16 195 2.6 378 2.77
Property Oper. & Maint. 596 6.8 1,152 7.80 441 5.9 853 6.25
Energy 592 6.8 1,146 7.76 591 7.9 1,143 8.37
Total 2,975 34.1 5,754 38.95 2,835 38.0 5,483 40.17
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 2,791 31.9 5,398 36.55 1,906 25.7 3,688 27.01
- ----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 212 2.4 410 2.78 199 2.7 385 2.82
Insurance 92 1.1 178 1.21 78 1.0 150 1.10
Reserve for Replacement 350 4.0 676 4.58 298 4.0 576 4.22
Equipment Leases 172 2.0 333 2.26 162 2.2 314 2.30
Ground Leases 70 0.8 134 0.91 68 0.9 131 0.96
Total 896 10.3 1,733 11.73 805 10.8 1,556 11.40
==================================================================================================================================
NET INCOME $1,895 21.6 % $3,665 $24.82 $1,102 14.9 % $2,132 $15.61
==================================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
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Comparable Operating Statements
We note that we were unable to obtain a full-year 1994 operating statement as a
result of the subject property's change in ownership in that year. However, the
historical income and expense statements show that the hotel's revenues and
operational efficiency have improved since the time of its acquisition.
Year-to-date August statements show that total revenues rose by more than
$1,000,000 from 1995 to 1996. Telephone revenues also increased substantially on
a year-to-date basis, from $2.70 per occupied room in 1995 to $4.33 in 1996, and
our projections have been adjusted accordingly. There was an approximate $34,000
gain in other income from 1995 to 1996, again on a year-to-date August basis;
this was partly the result of increased space rentals.
In calendar year 1995, departmental expenses equated to 35.9% of revenues, and
this ratio declined slightly (to 34.0%) in year-to-date 1996. Telephone expense
declined significantly as a percentage of telephone revenue, to reach 40.3% in
year-to-date 1996, primarily as a result of the substantial rise in the
associated income. We have adjusted our projections to reflect this lower ratio.
Likewise, year-to-date other income expense dropped as a percentage of other
income from 1995 to 1996, again reflecting greater revenues in this department.
Our projections have been adjusted slightly in consideration of this greater
efficiency.
On a year-to-date August basis, administrative and general expense declined from
$1,725 per available room in 1995 to $1,623 in 1996 as greater operational
efficiencies were achieved. We have considered this decline in formulating our
projections. Marketing expense equated to 6.4% of total revenue in calendar year
1995, and this ratio dropped to 5.1% in year-to-date 1996. House profit rose
significantly on a year-to-date basis, from roughly $1,906,000 in 1995 to
$2,791,000 in 1996; this reflects the higher revenues and lower expense levels
outlined above.
A discrepancy should be noted in the insurance expense. According to information
received from the Ashford Financial Corporation, the subject property's calendar
year 1995 insurance expense was roughly $22,000, while the year-to-date August,
1995 statement shows a level of $78,000. Ashford representatives indicate that
this anomaly may be the result of end-of-the-year adjustments made to the
insurance ledger. Because of this inconsistency, our base-year income and
expense statement shows an insurance expense of $350.00 per available room,
which is based on industry standards for full-service hotels. Other fixed
expenses remained relatively stable throughout the historical period. As noted
earlier in this report, a property
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tax reassessment took place in 1996, necessitating an upward adjustment of the
base-year property tax expense.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
operating results. Depending on the dynamics of the local market, a typical
buyer's projection may be adjusted upward or downward. We have attempted to
consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
56.7%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
1995
------------------------------------------------
No. of Rooms: 517
Occupancy: 56.7%
Average Rate: $72.91 Amount per Amount per
No. of Occupied Rooms: 106,977 Percent Available Occupied
(+000) of Gross Room Room
- -----------------------------------------------------------------------------
REVENUE
Rooms $7,799 65.6% $15,086 $72.91
Food 2,662 22.4 5,148 24.88
Beverage 384 3.2 744 3.59
Telephone 448 3.8 866 4.18
Valet Parking 445 3.7 861 4.16
Other Income 154 1.3 298 1.44
Total 11,892 100.0 23,003 111.17
- -----------------------------------------------------------------------------
EXPENSES
Rooms* 1,617 20.7 3,128 15.12
Food & Beverage* 2,290 75.2 4,429 21.40
Telephone* 224 50.0 433 2.09
Valet Parking* 91 20.5 176 0.85
Other Income* 15 10.0 30 0.14
Administrative & General 1,199 10.1 2,319 11.21
Management Fee 357 3.0 690 3.34
Marketing 643 5.4 1,244 6.01
Franchise Fees 253 2.1 490 2.37
Property Oper. & Maint. 749 6.3 1,448 7.00
Energy 847 7.1 1,639 7.92
Property Taxes 333 2.8 645 3.12
Insurance 181 1.5 350 1.69
Reserve for Replacement 476 4.0 920 4.45
Equipment Leases 244 2.1 473 2.28
Ground Leases 102 0.9 197 0.95
Total 9,622 80.9 18,611 89.94
- -----------------------------------------------------------------------------
NET INCOME $2,270 19.1% $4,392 $21.22
=============================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Although line items can be affected by different factors,
we must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
---- ----
Average 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
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The preceding table shows inflation forecasts averaging 3.0% and 2.9%. Most of
the economists in the sample estimate inflation rates ranging from 2.5% to 3.4%,
although several anticipate slightly higher levels. As a further check on these
inflation projections, we have reviewed historical increases in the Consumer
Price Index. Because the value of real estate is predicated on cash flows over a
relatively long period, inflation should be considered from a long-term
perspective. Between 1986 and 1994, the national CPI increased at an average
annual compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-6 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
- ------------------------------------------------------------
1997 4.0%
1998 1.0
1999 2.0
Thereafter 3.5
3.5
- --------------------------------------------------------------------------------
The subject property leases the land housing its underground parking garage, and
a portion of the land underneath the West Tower. Ground lease expense has been
projected based on the lease terms, and it does not conform to the underlying
inflation rates set forth above. Our estimate of the subject property's ground
lease expense will be outlined later in this section.
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
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Table 10-7 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- ---------------------------------------------------------------------
Projected Occupancy Percentage 63.0% 60.0% 60.0%
Projected Average Rate $80.47 $81.28 $82.91
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-8 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Rooms
Number Days Revenue
Year Occupancy Average Rate of Units in Year (+000)
- --------------------------------------------------------------------------------
1997 63 % x $80.47 x 517 x 365 = $9,567
1998 60 x 81.28 x 517 x 365 = 9,203
Stabilized 60 x 82.91 x 517 x 365 = 9,387
2000 60 x 85.81 x 517 x 365 = 9,716
2001 60 x 88.81 x 517 x 365 = 10,056
- --------------------------------------------------------------------------------
Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue. Although food
revenue varies directly with changes in occupancy, the small portion generated
by banquet sales and outside capture is relatively fixed. The following table
shows the projected food revenue and several units of comparison that can be
used to check the reasonableness of the forecast.
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Table 10-9 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Food Revenue (+000) $ 3,090 $ 3,081 $ 3,188
Percent of Total Revenue 21.6% 22.1% 22.3%
Amount per Available Room $ 5,976 $ 5,959 $ 6,167
Amount per Occupied Room $ 25.99 $ 27.21 $ 28.16
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges. The following table illustrates the forecast
of beverage revenue.
================================================================================
Table 10-10 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Beverage Revenue (+000) $446 $445 $460
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the early 1980s, hotels were limited to a 15%
commission on long-distance calls, which allowed few profits. Deregulation and
the development of sophisticated call-accounting equipment have resulted in
profitable telephone departments. State-of-the-art equipment is capable of
least-cost routing, automatic price billing, and posting telephone charges to
guest folios. Hotels can select among various long-distance services, and can
also work with any one of a number of Alternative Operator Services (AOS). These
systems route and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge
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long-distance calls to their personal or business accounts in this manner, the
hotel loses the revenue associated with long-distance tariffs and mark-ups, and
only receives an access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-11 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Revenue (+000) $ 527 $ 522 $ 541
Percent of Total Revenue 3.7% 3.8% 3.8%
Amount per Available Room $ 1,020 $ 1,010 $ 1,046
Amount per Occupied Room $ 4.43 $ 4.61 $ 4.78
- --------------------------------------------------------------------------------
Valet Parking Revenue
Valet parking revenue is derived from the fees charged to guests who park their
cars in the one of the subject property's two garages. In most cases, the daily
parking fee is added to the guest's folio. For the purpose of our projections,
we have used the historical figure of $445,000 as the base year amount. The
following table outlines our forecast of valet parking revenue.
================================================================================
Table 10-12 Forecast of Valet Parking Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Valet Parking Revenue (+000) $ 493 $ 502 $ 520
Percent of Total Revenue 3.4% 3.6% 3.6%
Amount per Available Room $ 954 $ 972 $ 1,006
Amount per Occupied Room $ 4.15 $ 4.43 $ 4.59
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
telephone services, and valet parking. Depending on the type of hotel and the
facilities and amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
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o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-13 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Other Income (+000) $ 170 $ 174 $ 180
Percent of Total Revenue 1.2% 1.2% 1.3%
Amount per Available Room $ 330 $ 336 $ 348
Amount per Occupied Room $ 1.43 $ 1.54 $ 1.59
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a
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result, salaries, wages, and employee benefits are only moderately sensitive to
changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-14 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Rooms Expense (+000) $ 1,810 $ 1,835 $ 1,899
Percent of Rooms Revenue 18.9% 19.9% 20.2%
Amount per Available Room $ 3,500 $ 3,549 $ 3,674
Amount per Occupied Room $ 15.22 $ 16.21 $ 16.77
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. After considering the fixed and variable components, we
forecast the subject property's food and beverage expense as follows.
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Table 10-15 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Food and Beverage Expense (+000) $ 2,545 $ 2,589 $ 2,679
Ratio to Food and Beverage Revenue 72.0% 73.4% 73.4%
Amount per Available Room $ 4,923 $ 5,008 $ 5,182
Amount per Occupied Room $ 21.41 $ 22.87 $ 23.66
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-16 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Expense (+000) $ 249 $ 253 $ 262
Percent of Telephone Revenue 47.3% 48.5% 48.5%
Amount per Available Room $ 482 $ 490 $ 507
Amount per Occupied Room $ 2.09 $ 2.23 $ 2.31
- --------------------------------------------------------------------------------
Valet Parking Expense
Valet parking expense primarily consists of the salaries and benefits paid to
the parking attendants in the garage and at the hotel's main entrance. Our
projections, which are presented in the following table, are based on the 1995
expense of $91,000.
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Table 10-17 Forecast of Valet Parking Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Valet Parking Expense (+000) $ 99 $ 102 $ 106
Percent of Valet Parking Revenue 20.1% 20.3% 20.3%
Amount per Available Room $ 192 $ 197 $ 204
Amount per Occupied Room $ 0.83 $ 0.90 $ 0.94
- --------------------------------------------------------------------------------
Other Income Expense
Other income expense consists of costs associated with other income, and is
dependent on the nature of the revenue. For example, if a hotel leases its gift
shop to an outside operator, the expenses are limited to items such as rental
fees and commissions. If the property operates its own gift shop, both revenues
and expenses will be higher, and the hotel is responsible for the cost of goods
sold, payroll, and so forth. Using a fixed and variable forecasting model, we
project the subject property's other income expense as follows.
================================================================================
Table 10-18 Forecast of Other Income Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Other Income Expense (+000) $ 17 $ 17 $ 18
Percent of Other Income Revenue 9.8% 9.9% 9.9%
Amount per Available Room $ 32 $ 33 $ 34
Amount per Occupied Room $ 0.14 $ 0.15 $ 0.16
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of
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recruiting, relocating, and training personnel. Security consists of the cost of
contract security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel.
Administrative and general expenses at the Radisson Plaza equated to roughly
$2,591 per available room in 1995. This level is uncharacteristically high for a
large, full-service hotel. Consequently, we estimate the subject property's
administrative and general expense at a more reasonable level of roughly $2,319
per available room in the base year. Inflating this amount throughout the
projection period yields the following forecast.
================================================================================
Table 10-19 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Admin. & General Expense (+000) $ 1,331 $ 1,352 $ 1,395
Percentage of Total Revenue 9.3% 9.7% 9.8%
Amount per Available Room $ 2,574 $ 2,615 $ 2,698
Amount per Occupied Room $ 11.20 $ 11.94 $ 12.32
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost
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always based on a percentage of total revenue, which means they have no fixed
component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Hospitality, Inc. under a contact
that requires a management fee of 3.0% of gross revenues. Based on our review of
the current market for management contracts, we are of the opinion that this fee
is consistent with prevailing market terms. Applying this management fee
structure to the projection of total revenue yields the following forecast of
the subject property's management fee.
================================================================================
Table 10-20 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Management Fee (+000) $429 $418 $428
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing
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campaign tend to linger, and a property often enjoys the benefits of
concentrated sales efforts for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
The subject property's historical marketing expenses are slightly higher than
industry standards. In 1995, marketing costs equated to $1,452 per available
room, and we have adjusted this figure downward to $1,244 in the base year.
Inflating this amount throughout the projection period yields the following
forecast.
================================================================================
Table 10-21 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Marketing Expense (+000) $ 714 $ 725 $ 749
Percentage of Total Revenue 5.0% 5.2% 5.2%
Amount per Available Room $ 1,382 $ 1,403 $ 1,448
Amount per Occupied Room $ 6.01 $ 6.41 $ 6.61
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Radisson for the use of the
company's name, trademarks, and service marks. The franchise agreement calls for
a fee of 3.25% of gross rooms revenue, and based on this formula, the following
table sets forth our forecast of franchise fees.
================================================================================
Table 10-22 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Franchise Fees (+000) $311 $299 $305
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
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Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-23 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Prop. Oper. & Maint. Expense (+000) $ 831 $ 844 $ 871
Percentage of Total Revenue 5.8% 6.1% 6.1%
Amount per Available Room $ 1,608 $ 1,633 $ 1,685
Amount per Occupied Room $ 6.99 $ 7.46 $ 7.69
- --------------------------------------------------------------------------------
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Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-24 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Energy Expense (+000) $ 919 $ 945 $ 977
Percentage of Total Revenue 6.4% 6.8% 6.8%
Amount per Available Room $ 1,777 $ 1,827 $ 1,889
Amount per Occupied Room $ 7.73 $ 8.34 $ 8.63
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-25 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Property Taxes (+000) $357 $370 $383
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
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liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
As noted previously, there is a discrepancy in the 1995 year-end insurance
expense, and thus our projections are calculated from a base year figure of $350
per available room, which reflects industry standards for hotels of this type.
In subsequent years, this amount is assumed to increase in tandem with
inflation. The following table outlines our projection of insurance expense.
================================================================================
Table 10-26 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Insurance Expense (+000) $194 $201 $208
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
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Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-27 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Replacement Reserves (+000) $572 $557 $571
- --------------------------------------------------------------------------------
Equipment Leases
The subject property leases various equipment, including two copiers, ice
machines, televisions, a point-of-sales system, and telephone equipment. We
estimate the hotel's base-year equipment lease expense at $244,000, based on
historical levels. This figure has been inflated to arrive at the following
projections.
================================================================================
Table 10-28 Forecast of Equipment Lease Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Projected Equipment Lease Expense (+000) $262 $271 $280
- --------------------------------------------------------------------------------
Ground Lease
The subject property leases land for its underground parking garage and a
portion of the West Tower. The lease payments for the northeastern portion of
the lot improved with the West Tower are fixed at $30,000 annually throughout
the projection period. Pursuant to the terms of the lease, parking garage lease
payments are projected at $75,000 in calendar years 1996 through 2000, $80,000
in calendar years 2001 through 2005, and $85,000 in calendar years 2006 though
2010. The following table outlines these projections.
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================================================================================
Table 10-29 Forecast of Ground Lease Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Garage $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 85,000
West Tower 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000
- --------------------------------------------------------------------------------------------------------------
Total 105,000 105,000 105,000 105,000 110,000 110,000 110,000 110,000 110,000 115,000
</TABLE>
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years, and are expressed in inflated
dollars for each year.
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================================================================================
Table 10-30 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Radisson Plaza , Fort Worth, Texas
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1995 Results 1997
------------------------------------------------- -----------------------------------------------
No. of Rooms: 517 517
Occupancy: 56.7% 63.0%
Average Rate: $72.91 $80.47
No. of Days Open: 365 Percent 365 Percent
No. of Occupied Rooms: 106,977 of 118,884 of
(+000) Gross PAR POR (+000) Gross PAR POR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $7,799 66.7% $15,086 $72.91 $9,567 67.0% $18,505 $80.47
Food 2,662 22.8 5,148 24.88 3,090 21.6 5,977 25.99
Beverage 350 3.0 676 3.27 446 3.1 863 3.75
Telephone 303 2.6 587 2.84 527 3.7 1,019 4.43
Valet Parking 445 3.8 861 4.16 493 3.4 954 4.15
Other Income 140 1.2 271 1.31 170 1.2 329 1.43
Total 11,699 100.1 22,629 109.36 14,293 100.0 27,646 120.23
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,617 20.7 3,128 15.12 1,810 18.9 3,501 15.22
Food & Beverage 2,290 76.0 4,429 21.40 2,545 72.0 4,923 21.41
Telephone 187 61.5 361 1.75 249 47.2 482 2.09
Valet Parking 91 20.5 176 0.85 99 20.1 191 0.83
Other Income 15 10.6 29 0.14 17 10.0 33 0.14
Total 4,200 35.9 8,123 39.26 4,720 33.0 9,130 39.70
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 7,500 64.2 14,506 70.10 9,573 67.0 18,516 80.52
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,340 11.5 2,591 12.52 1,331 9.3 2,574 11.20
Management Fee 351 3.0 678 3.28 429 3.0 830 3.61
Marketing 751 6.4 1,452 7.02 714 5.0 1,381 6.01
Franchise Fees 309 2.6 598 2.89 311 2.2 602 2.62
Property Oper. & Maint. 681 5.8 1,317 6.36 831 5.8 1,607 6.99
Energy 890 7.6 1,721 8.31 919 6.4 1,778 7.73
Total 4,321 36.9 8,357 40.39 4,535 31.7 8,772 38.15
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 3,179 27.3 6,149 29.71 5,038 35.3 9,745 42.38
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 289 2.5 559 2.70 357 2.5 691 3.00
Insurance 22 0.2 43 0.21 194 1.4 375 1.63
Reserve for Replacement 468 4.0 906 4.38 572 4.0 1,106 4.81
Equipment Leases 244 2.1 473 2.28 262 1.8 507 2.20
Ground Leases 102 0.9 197 0.95 105 0.7 203 0.88
Total 1,126 9.7 2,178 10.52 1,490 10.4 2,882 12.53
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $2,053 17.6% $3,971 $19.19 $3,548 24.9% $6,863 $29.84
====================================================================================================================================
Food/Rooms 34.1% 32.3%
Beverage/Food 13.1% 14.4%
Telephone/Rooms 3.9% 5.5%
Other Income/Rooms 1.8% 1.8%
<CAPTION>
1998 Stabilized
----------------------------------------------- ------------------------------------------------
No. of Rooms: 517 517
Occupancy: 60.0% 60.0%
Average Rate: $81.28 $82.91
No. of Days Open: 365 Percent 365 Percent
No. of Occupied Rooms: 113,223 of 113,223 of
(+000) Gross PAR POR (+000) Gross PAR POR
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $9,203 66.2% $17,801 $81.28 $9,387 65.8% $18,157 $82.91
Food 3,081 22.1 5,959 27.21 3,188 22.3 6,166 28.16
Beverage 445 3.2 861 3.93 460 3.2 890 4.06
Telephone 522 3.7 1,010 4.61 541 3.8 1,046 4.78
Valet Parking 502 3.6 971 4.43 520 3.6 1,006 4.59
Other Income 174 1.2 337 1.54 180 1.3 348 1.59
Total 13,927 100.0 26,938 123.01 14,276 100.0 27,613 126.09
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,835 19.9 3,549 16.21 1,899 20.2 3,673 16.77
Food & Beverage 2,589 73.4 5,008 22.87 2,679 73.4 5,182 23.66
Telephone 253 48.5 489 2.23 262 48.4 507 2.31
Valet Parking 102 20.3 197 0.90 106 20.4 205 0.94
Other Income 17 9.8 33 0.15 18 10.0 35 0.16
Total 4,796 34.4 9,277 42.36 4,964 34.8 9,602 43.84
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 9,131 65.6 17,662 80.65 9,312 65.2 18,012 82.24
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,352 9.7 2,615 11.94 1,395 9.8 2,698 12.32
Management Fee 418 3.0 809 3.69 428 3.0 828 3.78
Marketing 725 5.2 1,402 6.40 749 5.2 1,449 6.62
Franchise Fees 299 2.1 578 2.64 305 2.1 590 2.69
Property Oper. & Maint. 844 6.1 1,632 7.45 871 6.1 1,685 7.69
Energy 945 6.8 1,828 8.35 977 6.8 1,890 8.63
Total 4,583 32.9 8,865 40.48 4,725 33.0 9,139 41.73
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 4,548 32.7 8,797 40.17 4,587 32.2 8,872 40.51
- ----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 370 2.7 716 3.27 383 2.7 741 3.38
Insurance 201 1.4 389 1.78 208 1.5 402 1.84
Reserve for Replacement 557 4.0 1,077 4.92 571 4.0 1,104 5.04
Equipment Leases 271 1.9 524 2.39 280 2.0 542 2.47
Ground Leases 105 0.8 203 0.93 105 0.7 203 0.93
Total 1,504 10.8 2,909 13.28 1,547 10.9 2,992 13.66
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $3,044 21.9% $5,888 $26.88 $3,040 21.3% $5,880 $26.85
==================================================================================================================================
Food/Rooms 33.5% 34.0%
Beverage/Food 14.4% 14.4%
Telephone/Rooms 5.7% 5.8%
Other Income/Rooms 1.9% 1.9%
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 109
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================================================================================
Table 10-31 Ten-Year Forecast of Income and Expense, Radisson Plaza, Fort
Worth, Texas
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
-------------------- -------------------- -------------------- ------------------ ----------------------
No. of Rooms: 517 517 517 517 517
No. of Occupied Rooms: 118,884 113,223 113,223 113,223 113,223
Occupancy: 63.0% % of 60.0% % of 60.0% % of 60.0% % of 60.0% % of
Average Rate: $80.47 Gross $81.28 Gross $82.91 Gross $85.81 Gross $88.81 Gross
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $9,567 67.0% $9,203 66.2% $9,387 65.8% $9,716 65.8% $10,056 65.8%
Food 3,090 21.6 3,081 22.1 3,188 22.3 3,300 22.3 3,416 22.3
Beverage 446 3.1 445 3.2 460 3.2 477 3.2 493 3.2
Telephone 527 3.7 522 3.7 541 3.8 560 3.8 579 3.8
Valet Parking 493 3.4 502 3.6 520 3.6 538 3.6 557 3.6
Other Income 170 1.2 174 1.2 180 1.3 186 1.3 193 1.3
Total 14,293 100.0 13,927 100.0 14,276 100.0 14,777 100.0 15,294 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,810 18.9 1,835 19.9 1,899 20.2 1,966 20.2 2,035 20.2
Food & Beverage 2,545 72.0 2,589 73.4 2,679 73.4 2,773 73.4 2,870 73.4
Telephone 249 47.2 253 48.5 262 48.4 271 48.4 281 48.5
Valet Parking 99 20.1 102 20.3 106 20.4 109 20.3 113 20.3
Other Income 17 10.0 17 9.8 18 10.0 18 9.7 19 9.8
Total 4,720 33.0 4,796 34.4 4,964 34.8 5,137 34.8 5,318 34.8
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 9,573 67.0 9,131 65.6 9,312 65.2 9,640 65.2 9,976 65.2
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,331 9.3 1,352 9.7 1,395 9.8 1,444 9.8 1,494 9.8
Management Fee 429 3.0 418 3.0 428 3.0 443 3.0 459 3.0
Marketing 714 5.0 725 5.2 749 5.2 775 5.2 802 5.2
Franchise Fees 311 2.2 299 2.1 305 2.1 316 2.1 327 2.1
Property Oper. & Maint. 831 5.8 844 6.1 871 6.1 902 6.1 933 6.1
Energy 919 6.4 945 6.8 977 6.8 1,011 6.8 1,046 6.8
Total 4,535 31.7 4,583 32.9 4,725 33.0 4,891 33.0 5,061 33.0
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 5,038 35.3 4,548 32.7 4,587 32.2 4,749 32.2 4,915 32.2
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 357 2.5 370 2.7 383 2.7 396 2.7 410 2.7
Insurance 194 1.4 201 1.4 208 1.5 215 1.5 222 1.5
Reserve for Replacement 572 4.0 557 4.0 571 4.0 591 4.0 612 4.0
Equipment Leases 262 1.8 271 1.9 280 2.0 290 2.0 300 2.0
Ground Leases 105 0.7 105 0.8 105 0.7 105 0.7 110 0.7
Total 1,490 10.4 1,504 10.8 1,547 10.9 1,597 10.9 1,654 10.9
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $3,548 24.9% $3,044 21.9% $3,040 21.3% $3,152 21.3% $3,261 21.3%
====================================================================================================================================
<CAPTION>
2002 2003 2004 2005 2006
-------------------- ------------------------ --------------------- ----------------- -------------------
No. of Rooms: 517 517 517 517 517
No. of Occupied Rooms: 113,223 113,223 113,223 113,223 113,223
Occupancy: 60.0% % of 60.0% % of 60.0% % of 60.0% % of 60.0% % of
Average Rate: $91.92 Gross $95.14 Gross $98.47 Gross $101.92 Gross $105.48 Gross
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUE
Rooms $10,408 65.8% $10,772 65.8% $11,149 65.8% $11,539 65.8% $11,943 65.8%
Food 3,535 22.3 3,659 22.3 3,787 22.3 3,919 22.3 4,057 22.3
Beverage 511 3.2 529 3.2 547 3.2 566 3.2 586 3.2
Telephone 599 3.8 620 3.8 642 3.8 665 3.8 688 3.8
Valet Parking 577 3.6 597 3.6 618 3.6 639 3.6 662 3.6
Other Income 199 1.3 206 1.3 214 1.3 221 1.3 229 1.3
Total 15,829 100.0 16,383 100.0 16,957 100.0 17,549 100.0 18,165 100.0
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 2,106 20.2 2,179 20.2 2,256 20.2 2,335 20.2 2,416 20.2
Food & Beverage 2,971 73.4 3,075 73.4 3,183 73.4 3,294 73.4 3,409 73.4
Telephone 291 48.6 301 48.5 311 48.4 322 48.4 334 48.5
Valet Parking 117 20.3 121 20.3 125 20.2 130 20.3 134 20.2
Other Income 20 10.1 20 9.7 21 9.8 22 10.0 23 10.0
Total 5,505 34.8 5,696 34.8 5,896 34.8 6,103 34.8 6,316 34.8
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 10,324 65.2 10,687 65.2 11,061 65.2 11,446 65.2 11,849 65.2
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,546 9.8 1,601 9.8 1,657 9.8 1,715 9.8 1,775 9.8
Management Fee 475 3.0 491 3.0 509 3.0 526 3.0 545 3.0
Marketing 830 5.2 859 5.2 889 5.2 920 5.2 952 5.2
Franchise Fees 338 2.1 350 2.1 362 2.1 375 2.1 388 2.1
Property Oper. & Maint. 966 6.1 1,000 6.1 1,035 6.1 1,071 6.1 1,108 6.1
Energy 1,083 6.8 1,121 6.8 1,160 6.8 1,201 6.8 1,243 6.8
Total 5,238 33.0 5,422 33.0 5,612 33.0 5,808 33.0 6,011 33.0
- -----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 5,086 32.2 5,265 32.2 5,449 32.2 5,638 32.2 5,838 32.2
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 424 2.7 439 2.7 454 2.7 470 2.7 487 2.7
Insurance 230 1.5 238 1.5 247 1.5 255 1.5 264 1.5
Reserve for Replacement 633 4.0 655 4.0 678 4.0 702 4.0 727 4.0
Equipment Leases 311 2.0 322 2.0 333 2.0 345 2.0 357 2.0
Ground Leases 110 0.7 110 0.7 110 0.6 110 0.6 115 0.6
Total 1,708 10.9 1,764 10.9 1,822 10.8 1,882 10.8 1,950 10.8
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $3,378 21.3% $3,501 21.3% $3,627 21.4% $3,756 21.4% $3,888 21.4%
===================================================================================================================================
</TABLE>
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HVS International, Mineola, New York Income Capitalization Approach 110
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the average A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-32 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
- --------------------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
- --------------------------------------------------------------------------------
Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a
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HVS International, Mineola, New York Income Capitalization Approach 112
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hotel mortgage and the concurrent yield on an average A corporate bond. Through
a regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The average yield on A corporate bonds for the third quarter of 1996, as
reported by Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the
equation presented above produces an estimated hotel/motel interest rate of
8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of 65% to 75%, and
amortization periods of 25 to 30 years. The exact terms offered depend on
specific factors such as the property's location, the age and quality of the
physical facility, local hostelry market conditions, and
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(perhaps more significantly) the profile of the borrower. The strongest projects
typically command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 25-year
amortization mortgage with a 9.5% interest rate and a 0.111856 constant is
appropriate for the subject property. We believe that a mortgage lender will
lend up to 70% of the hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-33 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. These sources of equity funds have
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
================================================================================
Table 10-34 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22.0% before payment of incentive management
fees. This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Table 10-35 Terminal Capitalization Rate
- --------------------------------------------------------------------------------
Percent of Rate of Weighted
Value Return Average
- ---------------------------------------------------------------
Mortgage 70% x 0.11186 = 0.07830
Equity 30% x 0.12000 = 0.03600
---------
Overall Capitalization Rate 0.11430
- --------------------------------------------------------------------------------
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11.5%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-36 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow (as
derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $26,171,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22.0%, then $26,171,000 is the correct value by the
income capitalization approach. Using the assumed financial structure set forth
in the previous calculations, market value can be allocated between the debt and
equity as follows.
Mortgage Component (70%) $18,319,000
Equity Component (30%) 7,851,000
-----------
Total $26,171,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $18,319,000
Mortgage Constant 0.111856
-----------
Annual Debt Service $2,049,085
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-37 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $3,548,000 - $2,049,000 = $1,499,000
1998 3,044,000 - 2,049,000 = 995,000
1999 3,040,000 - 2,049,000 = 991,000
2000 3,152,000 - 2,049,000 = 1,103,000
2001 3,261,000 - 2,049,000 = 1,212,000
2002 3,378,000 - 2,049,000 = 1,329,000
2003 3,501,000 - 2,049,000 = 1,452,000
2004 3,627,000 - 2,049,000 = 1,578,000
2005 3,756,000 - 2,049,000 = 1,707,000
2006 3,888,000 - 2,049,000 = 1,839,000
- --------------------------------------------------------------------------------
The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ( $4,024,000 / 0.115 ) $34,991,000
Less: Brokerage and Legal Fees 1,050,000
Less: Mortgage Balance 13,197,000
-----------
Net Sale Proceeds to Equity $20,744,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
================================================================================
Table 10-38 Overall Property Yields
- --------------------------------------------------------------------------------
Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
- ------------------------------------------------------------------------------
Total Property $26,171,000 14.3%
Mortgage 18,319,000 9.5
Equity 7,851,000 22.0
- --------------------------------------------------------------------------------
The following tables demonstrate that the property receives its anticipated
yields, proving that the $26,171,000 value is correct based on the assumptions
used in this approach.
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Table 10-39 Total Property Yield
- --------------------------------------------------------------------------------
Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor at 14.3% Cash Flow
-------------------------------------------------------------------------------
1997 $3,548,000 x 0.874793 = $3,104,000
1998 3,044,000 x 0.765262 = 2,329,000
1999 3,040,000 x 0.669446 = 2,035,000
2000 3,152,000 x 0.585626 = 1,846,000
2001 3,261,000 x 0.512301 = 1,671,000
2002 3,378,000 x 0.448158 = 1,514,000
2003 3,501,000 x 0.392045 = 1,373,000
2004 3,627,000 x 0.342958 = 1,244,000
2005 3,756,000 x 0.300017 = 1,127,000
2006 37,830,000 * x 0.262453 = 9,929,000
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Total Property Value $26,172,000
*Tenth-year net income of $3,888,000 plus sales proceeds of $33,942,000
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Table 10-40 Mortgage Component Yield
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Present Worth of $1 Discounted
Year Debt Service Factor at 9.5% Cash Flow
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1997 $2,049,000 x 0.914266 = $1,873,000
1998 2,049,000 x 0.835883 = 1,713,000
1999 2,049,000 x 0.764219 = 1,566,000
2000 2,049,000 x 0.698700 = 1,432,000
2001 2,049,000 x 0.638798 = 1,309,000
2002 2,049,000 x 0.584031 = 1,197,000
2003 2,049,000 x 0.533960 = 1,094,000
2004 2,049,000 x 0.488181 = 1,000,000
2005 2,049,000 x 0.446328 = 915,000
2006 15,246,000 * x 0.408062 = 6,221,000
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Value of the Mortgage Component $18,320,000
* Tenth-year debt service of $2,049,000 plus outstanding mortgage balance of
$13,197,000
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Table 10-41 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor at 22.0% Cash Flow
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1997 $1,499,000 x 0.819665 = $1,229,000
1998 995,000 x 0.671851 = 668,000
1999 991,000 x 0.550692 = 546,000
2000 1,103,000 x 0.451383 = 498,000
2001 1,212,000 x 0.369983 = 448,000
2002 1,329,000 x 0.303262 = 403,000
2003 1,452,000 x 0.248573 = 361,000
2004 1,578,000 x 0.203747 = 322,000
2005 1,707,000 x 0.167004 = 285,000
2006 22,584,000 * x 0.136887 = 3,091,000
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Value of the Equity Component $7,851,000
* Tenth-year net income to equity of $1,839,000 plus sales proceeds of
$20,745,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.3%.
After reviewing the total property yields indicated by recent hotel sales, it is
our opinion that a 14.0% discount factor is appropriate for the Radisson Plaza .
The following table illustrates the discounted cash flow analysis using this
14.0% factor.
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Table 10-42 Discounted Cash Flow Analysis
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Discount
Net Factor Discounted
Year Income at 14.0% Cash Flow
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1997 $3,548,000 x 0.87719 = $3,112,281
1998 3,044,000 x 0.76947 = 2,342,259
1999 3,040,000 x 0.67497 = 2,051,913
2000 3,152,000 x 0.59208 = 1,866,237
2001 3,261,000 x 0.51937 = 1,693,661
2002 3,378,000 x 0.45559 = 1,538,971
2003 3,501,000 x 0.39964 = 1,399,130
2004 3,627,000 x 0.35056 = 1,271,478
2005 3,756,000 x 0.30751 = 1,155,000
2006 37,829,565 * x 0.26974 = 10,204,291
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Estimated Market Value: $26,635,222
(Say) $26,600,000
Reversion Analysis
11th-Year Net Income $4,024,000
Capitalization Rate 11.5%
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Total Sales Proceeds $34,991,304
Less: Brokerage & Legal Fees at 3.0% 1,049,739
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Net Sales Proceeds $33,941,565
*Tenth-year net income of $3,888,000 plus sales proceeds of $33,941,565
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors. This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $26,171,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
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Property: Sheraton at Intercontinental Airport
Location: Houston, Texas
Date of Sale: September, 1996
Sales Price: $21,700,000
Grantor: John Hancock
Grantee: HEI Hotels
Year Opened: 1983
Number of Rooms: 418
Price per Room: $51,914
Confirmed By: HEI Hotels
Sale #2:
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Property: Baton Rouge Hilton
Location: Baton Rouge, Louisiana
Date of Sale: May, 1996
Sales Price: $14,500,000
Grantor: Private Family
Grantee: Davidson Hotels
Year Opened: 1976
Number of Rooms: 298
Price per Room: $48,658
Confirmed By: Davidson Hotels
Sale #3:
--------
Property: Radisson Bloomington
Location: Bloomington, Minnesota
Date of Sale: December, 1995
Sales Price: $31,800,000
Grantor: MPI Metric
Grantee: LaSalle Partners
Year Opened: 1969
Number of Rooms: 580
Price per Room: $54,828
Confirmed By: 1995 Major Sales
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Sale #4:
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Property: Radisson Twin Towers
Location: Orlando, Florida
Date of Sale: November, 1995
Sales Price: $37,625,000
Grantor: Bank of America
Grantee: MUI Group (Malaysia)
Year Opened: 1975
Number of Rooms: 742
Price per Room: $50,708
Sale #5:
--------
Property: Denver Radisson
Location: Denver, Colorado
Date of Sale: January, 1995
Sales Price: 37,000,000
Grantor: Private Seller
Grantee: HBE Corporation
Year Opened: 1960
Number of Rooms: 740
Price per Room: $50,000
Confirmed By: Adams Mark Hotels (Purchaser)
In addition to considering the transactions outlined above, we have also
reviewed the 1994 sale of the subject property. The details of this transaction
are summarized as follows.
Subject Property:
-----------------
Property: Radisson Plaza
Location: Forth Worth, Texas
Date of Sale: June, 1994
Sales Price: $8,650,000
Grantor: Aetna Life insurance Corporation
Grantee: Tower I & II Associates Hotel Limited
Partnership (an entity controlled by
Ashford Financial Corp.)
Year Opened: 1921
Number of Rooms: 517
Price per Room: $16,731
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In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The seller had acquired
ownership of the hotel through foreclosure, and was reportedly motivated to
dispose of the property. This was an all-cash transaction, and reports indicate
that the deal closed extremely quickly. Based on our understanding of the terms
of this transaction, we do not believe that this sale was reflective of market
value.
The relevance of the transaction involving the subject property is also
undermined by the significant change in market conditions that occurred between
the date of this sale and the date of value of this appraisal. Areawide
occupancy and average rate have improved in the intervening months, and this
favorable trend is expected to continue. As previously discussed, the market for
hotel investments has also improved significantly as a result of changes in
lender and investor attitudes. Finally, the property itself has undergone a
significant renovation, in which approximately $2,200,000 was spent to upgrade
the facilities and amenities. For these reasons, it is our opinion that the
June, 1994 sale of the subject property is not a reliable indicator of the
hotel's current value.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
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consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $48,700 to $54,800 per room, or roundly
$25,200,000 to $28,300,000 for the 517-unit subject property. The income
capitalization approach indicates a value of $26,171,000, which falls within
this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount needed to
acquire a site and construct a building of equal desirability and utility
without undue delay. This approach estimates market value by first calculating
the current cost of replacing the improvements. Appropriate deductions are made
for depreciation resulting from physical deterioration, functional obsolescence,
and external (economic) obsolescence, and the land value is added to the
depreciated replacement cost to provide an estimate of market value. The cost
approach employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as a depressed market
for real estate, can cause a property to be worth less than its replacement cost
as new. The task of estimating the loss in value resulting from incurable
functional and external obsolescence is highly subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence becomes
increasingly difficult to quantify accurately. Loss in value
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attributable to functional obsolescence can be even more difficult to determine.
The subject property's West Tower was constructed in 1921, and thus is more than
75 years old as of the date of this appraisal; the East Tower was added in 1983,
and thus is roughly 13 years old. Like any building of this age, the subject
property shows certain signs of physical and functional obsolescence, including
lack of elevators in the East Tower parking garage and service areas. We also
note that additional maintenance is required to keep all systems in working
order as the property ages. The depressed hotel market conditions that prevailed
in the late 1980s and the early 1990s have also led to a degree of external
obsolescence. In our opinion, it is impossible to identify and quantify the
impact of these factors on the property's value with any accuracy, so we will
only estimate the hotel's replacement cost.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May issue
of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $61,500 517 $31,795,500
FF&E 17,000 517 8,789,000
Pre-Opening 4,300 517 2,223,100
Operating Capital 2,700 517 1,395,900
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Total $85,500 $44,203,500
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to
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the land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Radisson Plaza appears to represent the highest and best use of the property,
the ground lease approach is an appropriate method of determining land value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3.0% and 5.0% of rooms revenue.
The land beneath the subject property's West Tower and the parking garage is
leased; however, the lease payments are set by a predetermined schedule, and are
not calculated based on a percentage of rooms revenue. In order to determine the
value of the land that would be transferable upon a sale of the subject
property, we have determined the economic ground rent of the entire parcel using
the ground lease approach. We then subtracted the actual rent of the leased
portion of the site, yielding the total economic ground rent for the portion of
the site that is not leased. We then applied a capitalization rate to this
figure to determine the value of the fee simple portion of the subject
property's land.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.0% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's total
economic ground rent.
Stabilized Rooms Revenue (1997 Dollars) $8,762,865
Rental Percentage 0.04
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Economic Ground Rent $350,515
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As illustrated below, the actual rent paid by for the land underlying the West
Tower and the parking garage is subtracted from the total economic ground rent.
Economic Ground Rent $350,515
Less: Actual Ground Rent 105,000
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Net Economic Ground Rent $245,515
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10.0%. Applying this indicated capitalization rate to the subject property's
net economic ground rent yields the following estimate of land value.
Economic Ground Rent $245,515 $2,455,146
-------------------- = -------- =
Capitalization Rate 0.10
Estimated Land Value (Say) $2,500,000
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
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Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $44,203,500
Land Value 2,500,000
-------------
Total Replacement Cost $46,703,500
(Say) $46,700,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of
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the value indicated by the income capitalization approach is also justified by
this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Radisson Plaza . However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 136
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $26,171,000
Sales Comparison $25,200,000 - $28,300,000
Cost (Replacement Cost) $46,700,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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HVS International, Mineola, New York Reconciliation of Value Indications 137
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate a value range of
roundly $48,700 to $54,800 per available room. The income capitalization
approach indicates a per-room value of approximately $50,620. This information
suggests that a slight downward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an adjustment of
the income capitalization approach value may be necessary.
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Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the sales
comparison approach, the replacement cost estimate, and our extensive experience
in the hospitality industry. It is our opinion that the market value of the fee
simple and leasehold interests in the Radisson Plaza in Fort Worth, Texas, as of
January 1, 1997, is:
$25,850,000
TWENTY FIVE MILLION EIGHT HUNDRED
FIFTY THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $50,000 per room, which is well supported
by market sales and approximately 1.2% lower than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and
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similar items. Our inspection of the Radisson Plaza indicates that the personal
property and fixtures are good condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $17,000 per available room. Assuming an average
useful life of ten years and an effective age of three years, the value of the
furniture, fixtures, and equipment currently in place is approximately $11,899
per room, or a total of $6,152,000. Because furniture, fixtures, and equipment
are essential to a hotel's income-generating ability and are seldom removed from
the property or sold separately, the separation of the personal property
component from the real property is not particularly meaningful.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
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HVS International, Mineola, New York Statement of Assumptions and 140
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and 141
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 142
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
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HVS International, Mineola, New York Certification 143
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Kate B. Henriksen personally inspected the property described in this
report; Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings, but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 144
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Kate B. Henriksen
-----------------------------------
Kate B. Henriksen
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones, CRE
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Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore, CRE, MAI, CHA
-----------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of Subject Property looking north
[GRAPHIC OMITTED]
View of Subject Property lobby
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
A typical double\double guestroom
[GRAPHIC OMITTED]
Cactus Grill
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Meeting Room
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Ramada Plaza
[GRAPHIC OMITTED]
Worthington Hotel
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Parcel 4:
OVERHEAD PASSAGEWAY
Subject to the rights of the City of Fort Worth and subject to the rights of the
public to the use and enjoyment of the rights-of-way above and below the
following fee simple title in and to, that certain passageway
connecting the Hotel Texas Tract and the Executive Wing Tract (which is
described in that certain deed between Seller and Fort Tower II Associates Hotel
Limited Partnership and dated as of even date herewith) being more particularly
described as follows:
Part of Commerce Street between Blocks 111 and 112 of "Original Town" of Fort
Worth in Tarrant County, Texas and embracing that portion of Commerce Street
which the Overhead Passageway connecting the improvements on and being between
Blocks 111 and 112 is located, being located above the surface of the following
described realty:
Commence at the Southeasterly corner of Block 112 being the interestion of the
North line of East Eighth Street and the West line of Commerce Street and then
run North 30 degrees West, along the East line of Block 112 and the West line of
Commerce Street, 10-75/100 feet to a point for the Southwesterly and beginning
corner of the parcel being hereby described;
Thence North 60 degrees East, crossing Commerce Street generally along the
Southerly face of the most Southerly wall of the Overhead Passageway, 79-92/100
feet to the West line of Block 111 for the East line of Commerce Street;
Thence North 30 degrees West, along the West line of Block 111 and the East line
of Commerce Street, 11-9/10 feet to the Northerly face of the most Northerly
wall of the Overhead Passageway;
Thence South 60 degrees West, crossing Commerce Street, generally along the
Northerly line of the wall of the Overhead Passageway, 73-92/100 feet to the
East line of Block 112 for the West line of Commerce Street;
Thence South 30 degrees East, along the East Line of Block 112 and the West line
of Commerce Street, 11-9/10 feet to the place of beginning and containing 951
square feet;
Being the same property described as tract IV of Exhibit "A" in deed to Hunt
Hotel/Fort Worth, Ltd., recorded in Volume 6763, page 1413 of the Deed Records
of Tarrant County, Texas.
<PAGE>
STREETS ADJACENT TO HOTEL TRACT AND THE TESCO OFFICE TRACT
(5)
Subject to the rights of the City of Fort Worth and subject to the rights of the
public to use and enjoy the rights-of-way existing on the following described
realty, fee simple title in and to that one-half (1/2) portion of Eighth Street,
Main Street, Seventh Street and Commerce Street which adjoins the Hotel Texas
Tract and the TESCO Office Tract, more particularly described by metes and
bounds as follows:
Beginning at the Southeasterly corner of Block 112 at the intersection of the
Northerly line of Eighth Street and the Westerly line of Commerce Street;
Thence North 30 degrees West, along the East line of Block 112 and the Westerly
line of Commerce Street, 100 feet to the common East corner of Lots 12 and 13 in
Block 112;
Thence North 60 degrees East 39-97/100 feet to the middle of Commerce Street;
Thence along the middle of Commerce Street: South 29 degrees-59 minutes-30
seconds East 100-01/100 feet; and South 29 degrees-59 minutes-39 seconds East
30-10/100 feet to the middle of Eighth Street;
Thence along the middle of Eighth Street: South 60 degrees-07 minutes-49 seconds
West 39-95/100 feet; South 60 degrees-no minutes-10 seconds West 200 feet; and
South 59 degrees-59 minutes-55 seconds West 39-98/100 feet to the middle of Main
Street;
Thence along the middle of Main Street: North 29 degrees-57 minutes-59 seconds
West 30-01/100 feet; North 30 degrees West 199-994/1000 feet; and North 30
degrees-no minutes-51 seconds West 80-085/1000 feet to the middle of Seventh
Street;
Thence along the middle of Seventh Street: North 60 degrees-no minutes-21
seconds East 39-98/100 feet; and North 60 degrees-no minutes- 38 seconds East
99-99/100 feet;
Thence South 30 degrees East 30-01/100 feet to the North line of Block 112 and
the Southerly line of Seventh Street at the common North corner of Lots 8 and
16;
(continued)
<PAGE>
Thence South 60 degrees West, along the North line of Block 112 and the
Southerly line of Seventh Street, 100 feet to the Northwesterly corner of Block
112;
Thence South 30 degrees East, along the Westerly line of Block 112 and the
Easterly line of Main Street, 200 feet to the Southwesterly corner of Block 112;
Thence north 60 degrees east, along the southerly line of Block 112 and the
northerly line of said Eighth Street, 200 feet to the place of beginning;
SAVE AND EXCEPT [ILLEGIBLE]
"New Eighth Street" as described below and fee simple title in the City of Fort
Worth, Texas, in and to the Tunnel Property Parcel hereinafter described in this
Exhibit "A".
New Eighth Street
Commence at the southwesterly corner of Block 112 of Original Town of Fort Worth
in Tarrant County, Texas at the intersection of the northerly line of present
Eighth Street and the easterly line of Main Street and then run south 30 degrees
east along the said easterly line of Main Street 18-02/100 feet to the northerly
side or back of a curb.
Thence along the said back of curb:
north 62 degrees-44 minutes east 8-31/100 feet to the beginning of a curve
to the left with a radius of 6 feet;
then along said curve to the left 6-05/100 feet to its end and the
beginning of a curve to the right with a radius of 5-25/100 feet;
then along said curve to the right 5-03/100 feet to its end;
north 59 degrees-53 minutes-14 seconds east 45-25/100 feet to the
beginning of a curve to the right with a radius of 6-08/100 feet;
then along said curve to the right 6-37/100 feet to its end and the
beginning of a curve to the left with a radius of 6-10/100 feet;
then along said curve to the left 6-38/100 feet to its end;
north 59 degrees-59 minutes-19 seconds east 54-32/100 feet to the
beginning of a curve to the left with a radius of 6 feet;
then along said curve to the left 6-28/100 feet to its end and the
beginning of a curve to the right with a radius of 6 feet;
then along said curve to the right 6-29/100 feet to its end;
then north 59 degrees-59 minutes-18 seconds east, passing the end of said
curb and continuing in all 44 feet to the beginning of a curve to the
right with a radius of 5-25/100 feet.
Page 2 of 3
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Thence along said curve to the right 5-05/100 feet to its end and the
beginning of a curve to the left with a radius of 6 feet.
Thence along said curve to the left 6-05/100 feet to its end.
Thence north 57 degrees-19 minutes-50 seconds each 8-19/100 feet to the
westerly line of Commerce Street.
Thence south 30 degrees east, along the said westerly line of Commerce
Street, 42-02/100 feet to the northeasterly corner of Block 115 of said
Original Town of Fort Worth.
Thence south 60 degrees-no minutes-10 seconds west, along the northerly
line of said Block 115 and the southerly line of Eighth Street, 200 feet
to the northwesterly corner of said Block 115 and the said easterly line
of Main Street.
Thence north 30 degrees west, along the said easterly line of Main Street,
42 feet to the place of beginning
THE TUNNEL PROPERTY
The Tunnel Property is located under the surface of a certain portion of Eighth
Street in the City of Fort Worth, Tarrant County, Texas, commencing
approximately 1.5 feet under the surface of such portion of Eighth Street, and
being approximately 12 feet in depth, such portion of Eighth Street being more
particularly described by metes and bounds as follows:
Commencing at the Southwest corner of Block 112 of Original Town of Fort Worth,
Tarrant County, Texas, and being for the Easterly line of Main Street and the
Northerly line of Eighth Street and then run North 60 degrees East along the
Southerly line of said Block 112 and the said Northerly line of Eighth Street
6-68/100 feet to the place of beginning;
Thence North 60 degrees East, continuing along the Southerly line of said Block
112 and the said Northerly line of Eighth Street 24-26/100 feet;
Thence South 30 degrees East 60-02/100 feet to the Northerly line of said Block
115 of Original Town of Fort Worth, Tarrant County, Texas, and the Southerly
line of said Eighth Street;
Thence South 60 degrees West, along the said Northerly line of said Block 115
and the said Southerly line of Eighth Street 24-26/100 feet; and
Thence North 30 degrees West 60-02/100 feet to the place of beginning;
Page 3 of 3
<PAGE>
Parcel 9:
Column Easement Tract
Easement title in and to:
Tract 1 - Entrance Column - East End
Part of Eighth Street between Main Street and Commerce Street and Blocks 112 and
115 of Original Town of Fort Worth in Tarrant County, Texas.
Commence at the Southeast corner of said Block 112 and then run South 30 degrees
East 44-98/100 feet and then North 60 degrees East 40/100 feet of a foot to the
Northeast and beginning corner of the tract being described.
Thence South 30 degrees East 5-46/100 feet.
Thence South 60 degrees West 2 feet.
Thence North 30 degrees West 5-46/100 feet.
Thence North 60 degrees East 2 feet to the place of beginning.
Tract 2 - Entrance Column - West End
Part of Eighth Street between Main Street and Commerce Street and Blocks 112 and
115 of Original Town of Fort Worth in Tarrant County, Texas.
Commence at the southwesterly corner of said Block 112 and then run South 30
degrees East 45-09/100 feet and then North 60 degrees East 29/100 of a foot to
the Northwest and beginning corner of the tract being described.
Thence North 60 degrees East 2 feet.
Thence South 30 degrees East 5-46/100 feet.
Thence South 60 degrees West 2 feet.
Thence North 30 degrees West 5-46/100 feet to the place of beginning.
(continued)
<PAGE>
Tract 3 - Canopy Support Column Encroachment
Part of Eighth Street between Main Street and Commerce Street and Blocks 112 and
115 of Original Town of Fort Worth in Tarrant County, Texas.
Commence at the northwesterly corner of said Block 115 at the intersection of
the easterly line of Main Street and the southerly line of Eighth Street and
then run North 60 degrees-no minutes-10 seconds East along the northerly line of
said Block 115 and the southerly line of Eighth Street, 73-61/100 feet and then
North 30 degrees-no minutes-41 seconds West, 2-2/10 feet to the Southwest and
beginning corner of the tract being described.
Thence North 30 degrees-no minutes-41 seconds West 4-5/10 feet.
Thence North 60 degrees-no minutes-10 seconds East 53-91/100 feet.
Thence South 30 degrees-no minutes-41 seconds East 4-5/10 feet.
Thence South 60 degrees-no minutes-10 seconds West 53-91/100 feet to the place
of beginning.
Being the same easements, rights, titles, interests and estates of Hunt
Hotel/Forth Worth, Ltd. created, evidenced, or contained in that certain "Eighth
Street Improvements Agreement" (herein so called), by and between Hunt
Hotel/Forth Worth, Ltd. And the City of Fort Worth recorded in Volume 7098, page
533 of the Deed Records of Tarrant County, Texas.
Page 2 of 2
<PAGE>
Parcel 10:
THE TUNNEL PROPERTY
Easement title in and to:
The Tunnel Property is located under the surface of a certain portion of Eighth
Street in the City of Fort Worth, Tarrant County, Texas, commencing
approximately 1.5 feet under the surface of such portion of Eighth Street, and
being approximately 12 feet in depth, such portion of Eighth Street being more
particularly described by metes and bounds as follows:
Commencing at the Southwest corner of Block 112 of Original Town of Fort Worth,
Tarrant County, Texas, and being for the Easterly line of Main Street and the
Northerly line of Eighth Street and then run North 60 degrees East along the
Southerly line of said Block 112 and the said Northerly line of Eighth Street
6-68/100 feet to the place of beginning;
Thence North 60 degrees East, continuing along the Southerly line of said Block
112 and the said Northerly line of Eighth Street 24-26/100 feet;
Thence South 30 degrees East 60-02/100 feet to the Northerly line of said Block
115 of Original Town of Fort Worth, Tarrant County, Texas, and the Southerly
line of said Eighth Street;
Thence South 60 degrees West, along the said Northerly line of said Block 115
and the said Southerly line of Eighth Street 24-26/100 feet; and
Thence North 30 degrees West 60-02/100 feet to the place of beginning;
<PAGE>
Parcel 11:
CANOPY EASEMENT TRACT
Easement title in and to:
Part of Eighth Street between main Street and Commerce Street and Block 112 and
115 of Original Town of Fort Worth in Tarrant County, Texas.
Commence at the southwesterly corner of said Block 112 and then run South 30
degrees East along the easterly line of said Main Street 18-02/100 feet to the
northerly side or back of a curb and then along the said back of curb North 62
degrees-44 minutes East 8-31/100 feet to the beginning of a curve to the left
with a radius of 6 feet; then along said curve to the left 6-05/100 feet to its
end and the beginning of a curve to the right with a radius of 5-25/100 feet;
then along said curve to the right 5-03/100 feet to its end; North 59 degrees-53
minutes-14 seconds East 45-25/100 feet to the beginning of a curve to the right
with a radius of 6-08/100 feet; then along said curve to the right 6-37/100 feet
to its end and the beginning of a curve to the left with a radius of 6-10/100
feet; then along said curve to the left 6-38/100 feet to its end for the
Northwest and beginning corner of the tract being described.
Thence South 30 degrees-no minutes-41 seconds East 40-42/100 feet to the North
line of Block 115 in said Original Town of Fort Worth and the southerly line of
said Eighth Street, from which the northwesterly corner of Block 115 bears South
60 degrees-no minutes-10 seconds West, 73-61/100 feet.
Thence North 60 degrees-no minutes-10 seconds East, along the said northerly
line of Block 115 and the southerly line of Eighth Street, 53-91/100 feet.
Thence North 30 degrees-no minutes-41 seconds West 40-43/100 feet to the said
back of a curb.
Thence South 59 degrees-19 minutes-19 seconds West, along said back of curb
53-91/100 feet to the place of beginning.
AFTER RECORDING, RETURN TO:
CHICAGO TITLE INSURANCE COMPANY
7616 LBJ FREEWAY, SUITE 300
DALLAS, TEXAS 75251
ATTN: SHARON COOPER
<PAGE>
Exhibit A
Parcels 2 and 7
described as follows:
Parcel 2:
EXECUTIVE WING TRACT
A part of Block 111 of "Original Town" of Fort Worth in Tarrant County, Texas,
and embracing Lots 1 through 8 in Block 111 (the "Executive Wing Tract")
described as Tract II in the deed to Hunt Hotel/Fort Worth, Ltd., recorded in
Volume 6763, page 1413 of the Deed Records of Tarrant County, Texas, more
particularly described by metes and bounds as follows:
Beginning at the Northwesterly corner of Block 111 and Lot 8, being the
intersection of the Easterly line of Commerce Street and the Southerly line of
East Seventh Street;
Thence North 60 degrees East, along the Northerly line of Block 111 and Lot 8
and the Southerly line of East Seventh Street, 100 feet to the common North
corner of Lot 8 and Lot 10;
Thence South 30 degrees East, along the East line of Lots 8, 7, 6, 5, 4, 3, 2,
and 1 and the West line of Lots 10 and 9, a distance of 200 feet to the common
South corner of Lots 1 and 9 in the South line of Block 111 and the North line
of East Eighth Street;
Thence South 60 degrees West, along the Southerly line of Lot 1 and the North
line of East Eighth Street, 100 feet to the Southwest corner of Lot 1 and Block
111, being the intersection of the North line of East Eighth Street and the East
line of Commerce Street;
Thence North 30 degrees West, along the West line of Lots 1, 2, 3, 4, 5, 6, 7
and 8 and the West Line of Block 111 and the East line of Commerce Street, 200
feet to the place of beginning.
<PAGE>
Exhibit A
Parcels 3, 6 & 12
described as follows:
Parcel 3:
SEIBOLD LEASEHOLD ESTATE
A part of Block 112 of "Original Town" of Fort Worth in Tarrant County, Texas,
and embracing Lots 13 through 16 in Block 112 (the "Seibold Tract") described in
deed dated May 1, 1969, from Continental Realty Corporation to State Reserve
Life Insurance Company recorded in Volume 4717, page 873 of the Deed Records of
Tarrant County, Texas, more particularly described by metes and bounds as
follows:
Beginning at the Northeasterly corner of Block 112 and Lot 15, being the
interesection of the West line of Commerce Street with the South line of East
Seventh Street;
Thence South 30 degrees East, along the East line of Lots 16, 15, 14, and 13,
and the West line of Commerce Street, 100 feet to the Southeast corner of Lot
12;
Thence South 60 degrees West, along the South line of Lot 13 and the North line
of Lot 12, a distance of 100 feet to the common corner of Lots 12, 13, 4, and 5;
Thence North 30 degrees West, along the West line of Lots 13, 14, 15 and 16 the
East line of Lots 5, 6, 7, and 8, a distance of 100 feet to the common North
corner of Lot 16 and Lot 8 in the North line of Block 112 and the South line
East Seventh Street;
Thence North 60 degrees East, along the North line of Lot 16 and the south line
of East Seventh Street, 100 feet to the place of beginning.
Being the same property as described in that certain deed to Hunt Hotel/Fort
Worth, Ltd., recorded in Volume 6763, page 1413 of the aforesaid Deed Records.
<PAGE>
Parcel 6:
STREETS ADJACENT TO THE SEIBOLD TRACT
The one-half (1/2) portion of Seventh Street and Commerce Street which adjoins
the Seibold Tract, more particularly described by metes and bounds as follows:
Beginning at the Northeasterly corner of Block 112 at the intersection of the
South line of Seventh Street and the West line of Commerce Street;
Thence South 30 degrees East, along the Easterly line of Block 112 and the
Westerly line of Commerce Street, 100 feet to the common East corner of Lots 12
and 13 in Block 112;
Thence North 60 degrees East 39-97/100 feet to the middle of Commerce Street;
Thence along the middle of Commerce Street: North 25 degrees 55 minutes 30
seconds West 99-99/100 feet; and North 29 degrees 59 minutes 04 seconds West
29-96/100 feet to the middle of Seventh Street;
Thence along the middle of Seventh Street: South 60 degrees 02 minutes 59
seconds West 39-98/100 feet; and South 60 degrees no minutes 38 seconds West
100-01/100 feet;
Thence South 30 degrees East 30-01/100 feet to the North line of Block 112 and
the Southerly line of Seventh Street at the common North corner of Lots 8 and 16
in Block 112;
Thence North 60 degrees East, along the North line of Block 112 and the
Southerly line of Seventh Street, 100 feet to the place of beginning.
SUBJECT TO the rights of the City of Forth Worth and subject to the rights of
the public to the use and enjoyment of the rights-of-way existing on the realty
covered by the leasehold estate under the Seibold Lease.
<PAGE>
Parcel 12:
7TH STREET BRIDGE PARCEL
Easement title in and to:
Being a tract of the air estate and right located above the surface of a
part of a public street known as Seventh Street, being in the City of Fort
Worth in Tarrant County, Texas between Blocks 109 and 112 of Original Town
of Fort Worth and being that portion of said air estate and rights above
said Seventh Street between elevation 618 feet and 641-33/100 feet above
mean sea level City of Fort Worth datum, described by metes and bounds as
follows:
Beginning at the Southeasterly corner of said Block 109 of the Original
Town of Fort Worth at the Northwesterly intersection of Commerce Street
and Seventh Street;
Thence South 29 degrees-59 minutes-10 seconds East, crossing said Seventh
Street, 59-985/1000 feet to the Northeasterly corner of said Block 112 of
the Original Town of Fort Worth, and the Southwesterly intersection of
Commerce Street and Seventh Street;
Thence South 60 degrees West, along the Northerly line of said Block 112
of the Original Town of Fort Worth and the southerly line of Seventh
Street, 51-5/10 feet to a point for corner;
Thence North 29 degrees-59 minutes-10 seconds West, crossing said Seventh
Street, [illegible]-985/1000 feet to the Southerly line of said Block 109
of the Original Town of Fort Worth; and
Thence North 60 degrees East, along the Southerly line of said Block 109
of the Original Town of Fort Worth and the Northerly line of Seventh
Street, 51-3/10 feet to the place of beginning and containing 3,089 square
feet.
Being the same rights, titles, interests, and estates of Hunt Hotel/Fort
Worth, Ltd. created, evidenced, or contained in (i) that certain "Seventh
Street Bridge Agreement" recorded in Volume 7098, Page 534 of the Deed
Records of Tarrant County, Texas, and (ii) that certain "Continental Plaza
Improvements Agreement" recorded in Volume 7186, Page 1236 of the Deed
Records of Tarrant County, Texas.
<PAGE>
Exhibit A
Parcel 8
described as follows:
Parcel 8: Parking Garage Leasehold
The subsurface leasehold estate created pursuant to that certain lease agreement
dated May 22, 1980 by and between the City of Fort Worth as lessor and Hunt
Hotel/Fort Worth, Ltd. as lessee, filed under Clerk's File No. 21535 on 3/15/81.
Tarrant County Records of Tarrant County, Texas, insofar as said subsurface
leasehold estate covers and affects the following described three (3) parcels of
real estate:
(1) The Easterly 1/2 of Block 114 of Original Town of Fort Worth in Tarrant
County, Texas; and embracing Lots 9 through 16 in said Block and the
Easterly 1/2 of the alley adjoining said Lots on the West, and being the
three tracts described in the deeds to the City of Fort Worth recorded in
Volume 8892, Page 1350, Volume [Illegible], Page 1718, and Volume 6834,
Page [Illegible] of the Tarrant County Deed Records, described by metes
and bounds as follows:
Beginning at the Southeasterly corner of said Block 114 at the
intersection of the Westerly line of Main Street and the Northerly
line of Ninth Street;
Thence South [Illegible] degrees West, along the Southerly line of
said Block 114 and the said Northerly line of Ninth Street, 100 feet
to a point for corner;
Thence North 30 degrees West, along the middle of said alley,
adjoining Lots 8 through 16 on the West, 200 feet to the Northerly
line of said Block 114 and the Southerly line of Eighth Street;
Thence North [Illegible] degrees East, along the said Northerly
line of Block 114 and the said Southerly line of Eighth Street, 100
feet to the Northeasterly corner of said Block 114 and the said
Westerly line of Main Street; and
Thence South 30 degrees East, along the Easterly line of said Block
114 and the said Westerly line of Main Street, 200 feet to the place
of beginning.
(2) A part of Block 115 of the Original Town of Fort Worth in Tarrant County,
Texas and embracing all of Lots 5, 6, 7, 8, 13, 14, 15, and 16 and a
portion of Lots 1, 2, 3 and 4 in said Block, described by metes and
bounds as follows:
Beginning at the Northeasterly corner of said Block 115 for the
intersection of the Southerly line of Eighth Street and the Westerly
line of Commerce Street and from which a tack set in a lead plug
bears North 30 degrees West 5 feet and North 60 degrees East 5-4/10
feet;
Thence South 30 degrees East, along the Easterly line of said Block
115, along the Easterly line of Lots 16, 15, 14, and 13 for the said
Westerly line of Commerce Street, 100 feet to a galvanized spike for
the common East corner of Lots 13 and 12;
Thence South 60 degrees West, along the common line of said Lots 13
and 12, a distance of 100 feet to a galvanized spike for the common
corner of Lots 4, 5, 12 and 13;
Thence South 60 degrees West, along the common line of said Lots 13
and 12, a distance of 100 feet to a galvanized spike for the common
corner of Lots 4, 5, 12, and 13;
Thence South 30 degrees East, along the common line of said Lots 12
and 4, a distance of 9-33/100 feet to a galvanized spike;
Thence South [Illegible] degrees West 4-50/100 feet to a galvanized
spike;
<PAGE>
Parcel 7:
STREETS ADJACENT TO THE EXECUTIVE WING TRACT
The one-half (1/2) portion of Seventh Street, Eighth Street and Commerce
Street which adjoins the Executive Wing Tract, more particularly described by
metes and bounds as follows:
Beginning at the Southwesterly corner of Block 111 at the intersection of the
Easterly line of Commerce Street and the Northerly line of Eighth Street;
Thence North 60 degrees East, along the Southerly line of Block 111, a distance
of 100 feet;
Thence South 30 degrees East 30-175/1000 feet to the middle of Eighth Street;
Thence along the middle of Eighth Street: South 59 degrees 59 minutes 49 seconds
West 100 feet; and South 60 degrees 06 minutes 53 seconds West 39-95/100 feet to
the middle of Commerce Street;
Thence along the middle of Commerce Street: North 30 degrees no minutes 35
seconds West 30-10/100 feet; North 30 degrees no minutes 26 seconds West, 200
feet; and North 30 degrees West 29-96/100 feet to the middle of Seventh Street;
Thence along the middle of Seventh Street: North 60 degrees 01 minute 43 seconds
East 39-98/100 feet; and North 60 degrees East 100 feet;
Thence South 30 degrees East 29-94/100 feet to the Northerly line of Block 111;
Thence South 60 degrees West, along the Northerly line of Block 111 a distance
of 100 feet;
Thence South 30 degrees East, along the Westerly line of Block 111, a distance
of 200 feet to the place of beginning.
SUBJECT TO the rights of the City of Forth Worth and subject to the rights of
the public to use and enjoy the rights-of-way existing on the described realty.
AFTER RECORDING, RETURN TO:
CHICAGO TITLE INSURANCE COMPANY
7616 LBJ FREEWAY, SUITE 300
DALLAS, TEXAS 75251
ATTN: SHARON COOPER
<PAGE>
Thence South 30 degrees-01 minute-44 seconds East, through Lots 4,
3, 2 and 1, a distance of 90-67/100 feet to the Southerly line of
Lot 1 and said Block 115 in a Northerly line of Ninth Street from
which a "Y" marked on concrete walk bears South 30 degrees-01
minute-44 seconds East 3 feet;
Thence South 60 degrees West, along the said Southerly line of Lot 1
and Block 115 and the said Northerly line of Ninth Street, 95-55/100
feet to the Southwesterly corner of said Block 115 for the
intersection of said Northerly line of Ninth Street and the Easterly
line of Main Street from which a tack set in a lead plug bears South
30 degrees East 3 feet and south [illegible] degrees West 5 feet;
Thence North 30 degrees West, along the Westerly line of Lots 1
through [illegible] and the Westerly line of said Block 115 for the
said Easterly line of Main Street, 200 feet to the Northwesterly
corner of said Block 115 for the intersection of said Easterly line
of Main Street, and the said Southerly line of Eighth Street from
which a tack set in a lead plug bears South 60 degrees West 5 feet
and North 30 degrees West 5 feet; and
Thence North 60 degrees East, along the Northerly line of Lots 8 and
16 and the Northerly line of said Block 115 for the said Southerly
line of Eighth Street, 200 feet to the place of beginning.
(3) The subsurface position of Main Street between Block 114 and Block 115 of
the Original Town of Fort Worth, Tarrant County, Texas, being South of the
South right-of-way line of 8th Street and North of the North right-of-way
line of [illegible] Street.
Page 2 of 2
<PAGE>
[Letterhead of BROOKES BAKER SURVEYORS]
January 10, 1994
Page 1 of 2
Field notes for: -
PARCEL 1
HOTEL TEXAS TRACT AND THE TESCO OFFICE TRACT
A part of Block 112 of Original Town of Fort Worth in Tarrant County, Texas; and
embracing Lots 1 through 4 and Lots 9 through 12 in said Block 112 (the "Hotel
Texas Tract") described as Tract One in a deed dated March 1, 1968, from
Citizens Hotel Company to fort Worth Chamber Development Corporation, recorded
in volume 4584, page 853 of the Deed Records of Tarrant County, Texas, and also
embracing Lots 5 through 8 in Block 112 (the "TESCO Office Tract") described as
Tract Three in the above described deed to Fort Worth Chamber Development
Corporation, all such realty being described as Tract I of Exhibit "A" in a deed
to Hunt Hotel/Fort Worth, Ltd., recorded in volume 6763, page 1413 of the Deed
Records of Tarrant County, Texas and being more particularly described by metes
and bounds as follows:
Beginning at the northwesterly corner of Block 112 and Lot 8, being the
intersection of the easterly line of Main Street and the southerly line of East
Seventh Street from which a tack in lead plug bears north 30 degrees west 5 feet
and another tack in lead plug bears south 60 degrees west 5 feet.
Thence north 60 degrees east, along the northerly line of said Lot 8 and the
said southerly line of East Seventh Street, 100 feet to the common north corner
of Lots 8 and 16.
Thence south 30 degrees east, along the easterly line of Lots 8, 7, 6 and 5 and
the westerly line of Lots 16, 15, 14 and 13, a distance of 100 feet to the
common corner of Lots 5, 13, 12 and 4.
Thence north 60 degrees east, along the northerly line of Lot 12 and the
southerly line of Lot 13, a distance of 100 feet to their common east corner in
the westerly line of Commerce Street.
Thence south 30 degrees east, along the easterly line of Lots 12, 11, 10 and 9
and the said westerly line of Commerce Street, 100 feet to the southeasterly
corner of said Block 112 and Lot 9 from which a tack in lead plug bears north 60
degrees east 5-4/10 feet and south 30 degrees east 5 feet.
<PAGE>
January 10, 1994 ESTABLISHED 1880
Page 2 of 2 BROOKES BAKER
Field notes for: - SURVEYORS
PARCEL 1
HOTEL TEXAS TRACT AND THE TESCO OFFICE TRACT
Thence south 60 degrees west, along the southerly line of Lots 9 and 1 and the
northerly line of farmer East Eighth Street, 200 feet to the southwesterly
corner of said Block 11 and Lot 1 from which a tack in lead plug bears south 30
degrees east 5 feet and south 60 degrees west 5 feet.
Thence north 30 degrees west, along the westerly line of Lots 1, 2, 3, 4, 5, 6,
7 and 8 and the said easterly line of Main Street, 200 feet to the place of
beginning and containing 30,000 square feet.
Surveyed December 31, 1993.
BROOKES BAKER SURVEYORS STATE OF TEXAS
REGISTERED
/s/ Don W. Hickey ---------------
Don W. Hickey DON W. HICKEY [SEAL]
---------------
1961
PROFESSIONAL
LAND SURVEYOR
<PAGE>
HVS International, Mineola, New York Synopsis of Franchise and
License Agreements
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Synopsis of Franchise and License Agreements
Date: October 4, 1991
Licensor: Radisson Hotels International, Inc.
Licensee: Aetna Life Insurance Company
Premises: Radisson Plaza Hotel, Fort Worth, Texas
Term: Ten years
Renewal: Not available
Fees: Initial fee of $30,000
Royalty Fees:
Year 1: $150,000 (includes marketing fee)
Year 2: $175,000 (includes marketing fee)
Years 3-5: 3.00% of gross rooms revenue
Years 6+: 3.25% of gross rooms revenue
Marketing Fees:
Years 3+: 3.50% of gross rooms revenue
Licensor Services: Radisson reservation system, orientation and training,
technical consulting advice, national and regional
directories, and advertising
Licensee Obligations: Participate in all advertising and marketing programs,
use national 1-800 number, use Radisson signage,
participate in SMART program, maintain the hotel in good
condition, participate in other Radisson programs
Termination: Bankruptcy, felony, breach of contract, or condemnation
<PAGE>
HVS International, Mineola, New York Synopsis of Ground Lease - West Tower
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Synopsis of Ground Lease - West Tower
Date: March 26, 1960, amended July 1, 1979
Lessor: The Seibold Company, et. al.
Lessee: Fort Tower I Associates Hotel Limited Partnership
Premises: Portion of the site beneath the West Tower
Term: Original: 50 years, through May, 2010;
Amendment: through May, 2040
Renewal: None
Rent: Years 1 - 10: $21,000
Years 11 - 20: $24,000
Years 21 - 50: $30,000
Years 51 - 60: $40,000
Years 61 - 70: $60,000
Years 71 - 80: $80,000
<PAGE>
HVS International, Mineola, New York Synopsis of Ground Lease - Parking Garage
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Synopsis of Ground Lease - Parking Garage
Date: April 30, 1980
Lessor: The City of Fort Worth
Lessee: Fort Tower I Associates Hotel Limited Partnership
Premises: Parking garage
Term: Original: 50 years, through April, 2030
Renewal: None
Rent: April 30, 1980 - December 31, 1985: $60,000
Years 6 - 10: $65,000
Years 11 - 15: $70,000
Years 16 - 20: $75,000
Years 21 - 25: $80,000
Years 26 - 30: $85,000
Years 31 - 35: $90,000
Years 36 - 40: $95,000
Years 41 - 45: $100,000
Years 46 - 50: $105,000
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 1
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
The Simultaneous Valuation Formula as Used in the Valuation of the Subject
Property
The algebraic equation, known as the Simultaneous Valuation Formula, that solves
for the total property value using a ten-year mortgage equity technique was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the forecasted income before
debt service, leaving the net income to equity for each projection year. The net
income as of the 11th year is capitalized into a reversionary value using the
terminal capitalization rate. The equity residual, which is the total
reversionary value less the mortgage balance at that point in time and less any
broker and legal costs associated with the sale, is discounted to the date of
value at the equity yield rate. The net income to equity for each of the
projection years is also discounted back to the date of value. The sum of these
discounted values equals the value of the equity component. Because the equity
component comprises a specific percentage of the total value, the value of the
mortgage and the total property can be computed easily. This process can be
expressed in two algebraic equations that set forth the mathematic relationships
between the known and unknown variables using the following symbols.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 2
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to
calculate total property reversion (sales price at the end of the
projection period)
1/S^n = Current worth of $1 factor (discount factor) at the equity yield
rate
Using these symbols, the following formulas can be derived to express some of
the components comprising this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount which equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the amount of the mortgage by
the annual debt service constant (f). The following formula represents debt
service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th year's net income before debt service (NI^11) by
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 3
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage equity valuation process. Brokerage and legal
costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of a
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of a loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of a loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity reversionary value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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HVS International, Mineola, New York Simultaneous Valuation Formula 4
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial amount of the mortgage is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each of the projection years is discounted to the present value at the
equity yield rate (1/S^n). The sum of all these cash flows is the value of the
equity (1 - M) V. The following formula represents the calculation of equity as
the sum of the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combine Equations: Annual Cash Flow to Equity and Discounting the Cash Flow to
Equity to the Present Value - The last step is to arrive at one overall equation
that shows that the annual cash flow to equity plus the yearly discounting to
the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 5
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most instances, net
income before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income expressed as a percentage of total revenue will remain
constant, and the dollar amount will escalate at the annual inflation rate.
Hotel investors are currently using inflation rates of approximately 3.5%
annually. The previously presented ten-year forecast of income and expense
illustrates the subject property's net income, which is assumed to increase by
3.5% annually subsequent to the hotel's stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
================================================================================
Table 1 Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
The following table illustrates the present worth of a $1 factor at the 22.0%
equity yield rate.
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HVS International, Mineola, New York Simultaneous Valuation Formula 6
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Table 2 Present Worth of $1 Factor at Equity Yield Rate
- --------------------------------------------------------------------------------
Year Present Worth of $1
Factor @ 22.0%
-------------------------------------------------------------------
1997 0.819665
1998 0.671851
1999 0.550692
2000 0.451383
2001 0.369983
2002 0.303262
2003 0.248573
2004 0.203747
2005 0.167004
2006 0.136887
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula.
The fraction of the loan paid off during the projection period is calculated as
follows.
P = (0.111856 - 0.095)/(0.155277 - 0.095) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following:
(3,548,000 - 0.078299 V ) x 0.819672 +
(3,044,000 - 0.078299 V ) x 0.671862 +
(3,040,000 - 0.078299 V ) x 0.550707 +
(3,152,000 - 0.078299 V ) x 0.451399 +
(3,261,000 - 0.078299 V ) x 0.369999 +
(3,378,000 - 0.078299 V ) x 0.303278 +
(3,501,000 - 0.078299 V ) x 0.248589 +
(3,627,000 - 0.078299 V ) x 0.203761 +
(3,756,000 - 0.078299 V ) x 0.167017 +
(3,888,000 - 0.078299 V ) x 0.136899 +
(((4,024,000/0.115) - (0.03 x (4,024,000/0.115)) -
((1 - 0.279638) x 0.70 x V)) x 0.136899)= ( 1 - 0.70)V
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 7
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Like terms are combined as follows.
$17,696,860 - 0.376214 = (1 - 0.70)V
$17,696,860 = 0.67621 V
V = $17,696,860 / 0.67621
V = $26,170,520
Value Indicated by the
Income Capitalization
Approach (Say) = $26,171,000
<PAGE>
HVS International, Mineola, New York Qualifications of Kate B. Henriksen
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Kate B. Henriksen
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports, and Investment Counseling)
1992 to 1996 STATLER HOTEL
Ithaca, New York
Spring, 1996 CORNELL UNIVERSITY, SCHOOL OF HOTEL ADMINISTRATION
Ithaca, New York
Summer, 1995 WESTGOR & ASSOCIATES, HOTEL AND MOTEL BROKERS OF
AMERICA
Minneapolis, Minnesota
Summer, 1994, 1995 MINNEAPOLIS MARRIOTT SOUTHWEST
Minnetonka, Minnesota
Summer, 1994 MINNESOTA OFFICE OF TOURISM
Saint Paul, Minnesota
Education BS - School of Hotel Administration, Cornell
University
Professional Affiliations Cornell Society of Hotelmen
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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================================================================================
Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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================================================================================
Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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HVS International, Mineola, New York Qualifications of Stephen
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
==============================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
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Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Howard Johnson - Middletown
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Middletown, New York
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
December 6, 1996
Mr. Shirish Godbole, Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Howard Johnson - Middletown
Middletown, New York
Ref. 9610280
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities, and have analyzed the hostelry market conditions in the Orange
County area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the fee simple interest in the
subject property described in this report, as of January 1, 1997, is:
$3,300,000
THREE MILLION THREE HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Marie K. Laib
Marie K. Laib
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
Howard Johnson - Middletown, Middletown, New York
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Table of Contents
1. Executive Summary ........................................... 1
2. Nature of the Assignment .................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ........................... 7
4. Market Area Analysis ........................................ 21
5. Overview of External Forces Affecting the U.S.
Lodging Industry ......................................... 32
6. Lodging Market Supply and Demand Analysis ................... 48
7. Projection of Occupancy and Average Rate .................... 63
8. Highest and Best Use ........................................ 80
9. Approaches to Value ......................................... 82
10. Income Capitalization Approach .............................. 85
11. Sales Comparison Approach ................................... 124
12. Cost Approach ............................................... 131
13. Reconciliation of Value Indications ......................... 138
14. Statement of Assumptions and Limiting Conditions ............ 142
15. Certification ............................................... 146
Addenda
Photographs of the Subject Property
Photographs of the Competitive Properties
Legal Description
Synopsis of Franchise and License Agreements
Synopsis of Hotel Management Agreement
Explanation of the Simultaneous Valuation Formula
Qualifications
Marie K. Laib
Anne Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Howard Johnson - Middletown
Location: 551 Route 211 East
Middletown, New York 10940
Date of Inspection: October 16, 1996
Interest Appraised: Fee simple, including land,
improvements, and FF&E
Date of Value: January 1, 1997
Land Description
Area: +/-7.0 acres, or +/-304,920 square feet
Zoning: PID - Planned Interchange Development
Assessor's Parcel Number: Section 41, Block 1, Lot 39.5
Improvements
Age: Opened in 1975
Property Type: Economy-class
Guestrooms: 117
Number of Stories: Two
Food and Beverage Facilities: Courthouse Restaurant and Lounge (leased)
Meeting Space: +/-1,731 square feet
Parking: 208 spaces
Summary of Value Parameters
Highest and Best Use (as if vacant): Hold for future development
Highest and Best Use (as improved): As improved
Marketing Period: Six to nine months
Number of Years to Stabilize: Two
Stabilized Year: 1998
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HVS International, Mineola, New York Executive Summary 2
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 12%
Brokerage and Legal Fees: 3.0%
Holding Period: 10 years
Calculated Discount Rate: 14%
Estimates of Value
Income Capitalization Approach: $3,129,000
Sales Comparison Approach: $2,400,000 - $3,800,000
Cost Approach: $5,800,000
Market Value Conclusion: $3,300,000
Market Value Conclusion per Room: $28,205
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-304,920-square-foot (+/-7.0-acre) parcel improved with a 117-room,
economy-class lodging facility known as the Howard Johnson - Middletown, which
opened in 1975. In addition to guestrooms, the subject property contains
+/-1,731 square feet of meeting space, an indoor swimming pool and sauna, and a
restaurant and lounge which is currently leased to an independent operator. The
hotel is located approximately one-quarter of a mile north of the intersection
formed by Route 211 and State Route 17. Municipal jurisdictions governing the
property include the City of Middletown, the Town of Wallkill, the County of
Orange, and the State of New York. The hotel's civic address is 551 Route 211
East, Middletown, New York, 10940.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the
Middletown area for the purpose of estimating the market value of the subject
property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
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HVS International, Mineola, New York Nature of the Assignment 4
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3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of HVS International.
Scope of the Appraisal
All information was collected and analyzed by the staff of HVS International.
Data such as historical operating statements, site plans, floor plans, and so
forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities and analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including furniture, fixtures, and equipment. The fee simple
interest is defined as, "absolute ownership unencumbered by any other interest
or estate subject only to the four powers of government."(2) The subject
property has been appraised as a going concern (i.e., an open and operating
facility).
Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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HVS International, Mineola, New York Nature of the Assignment 5
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Estate Appraisers and the Appraisal Institute, entitled, The Valuation of Hotels
and Motels,(1) Hotels, Motels and Restaurants: Valuations and Market Studies,(2)
The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations,(3) and Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A copy of the subject property's legal description is presented in the Addenda
to this report, and was provided by Middletown New York Hotel Limited
Partnership. The appraisers assume no responsibility regarding the accuracy of
this legal description. On February 28, 1994, the Chartwell/ G.S.R. Hotels III,
Limited Partnership (formed by Middletown New York Hotel Limited Partnership)
entered into a purchase agreement with Nippon Credit Bank, Ltd., which held the
mortgage loan on the subject property and 14 other hotels. The closing of the
sale of the mortgage loan took place on March 25, 1994. Conveyance of the fee
simple title to the subject property occurred on or about August 25, 1994.
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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The subject property is operated under a franchise agreement with Howard Johnson
Franchise Systems, Inc.; this agreement expires on May 11, 2009. The hotel is
also subject to a management agreement with Remington Employers Corporation; an
abstract of this contract is presented in the Addenda to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property, assuming that it is placed on the
market at the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Marie K. Laib on October 16, 1996.
<PAGE>
HVS International, Mineola, New York Description of the Land, Improvements, 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located approximately one-quarter of a mile north of the
intersection formed by Route 211 and State Route 17 (S.R. 17). Municipal
jurisdictions governing the property include the City of Middletown, the Town of
Wallkill, the County of Orange, and the State of New York.
According to tax maps prepared by the Town of Wallkill Assessor's Office, the
subject parcel measures approximately 304,920 square feet, or +/-7.0 acres. The
subject site is comprised of one parcel identified as Section 41, Block 1, Lot
39.5. The site is irregular in shape, and features +/-364 feet of frontage and
access along Route 211 to the south, +/-689 feet abutting a vacant parcel to the
north, +/-766 feet abutting a parcel partially improved with a bank to the west,
and +/-619 feet abutting a vacant parcel to the east. Primary vehicular access
to the property is provided by Route 211. An adjacent vacant parcel to the
north, which is also owned by Middletown New York Hotel Limited Partnership,
measures +/-6.0 acres, and has not been considered in the appraisal of the
subject property.
The topography of the parcel is generally flat, with a gentle downward slope
from the northwest to southeast - from the rear to the front of the subject
site.
In conclusion, the size and topography of the subject parcel appear to be well
suited for hotel use.
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HVS International, Mineola, New York Description of the Land, Improvements, 8
Zoning, Taxes, and Neighborhood
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Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purposes of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would affect its use or marketability.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is adequately accessible to a variety of local, county, state, and interstate
highways.
The City of Middletown, located within the Township of Wallkill, is one of three
cities in Orange County, and is located in the western portion of the county.
The subject property is situated on State Route 211, approximately two miles
northeast of the City of Middletown. Interstate 84 is the primary artery in
western Orange County, and passes approximately one mile south of the subject
property. State Route 17 bisects Interstate 84 approximately one mile south of
the subject property and proceeds in a northwesterly direction, where it then
intersects with State Route 211, forming Exit 120, which is the exit point when
traveling to either the subject property or the City of Middletown.
Interstate 84 originates at the Massachusetts Turnpike, and runs primarily east
to west through Connecticut and the State of New York - particularly, the
northern portion of the New York City metropolitan area - and then terminates in
Scranton, Pennsylvania, where it connects with Interstate 81. Interstate 84 is a
major commercial route through New York State and New England, and is often used
by travelers wishing to avoid the more congested coastal routes - specifically,
I-95.
State Route 17 originates in Kearney, New Jersey, near the Lincoln Tunnel to
Manhattan, and extends northwesterly through the western end of Rockland County,
parallel to the New York State Thruway. At Harriman, Route 17 heads westward
along the southern tier of New York State, through Middletown and Binghamton,
terminating at the Pennsylvania border, near Erie.
State Route 211 runs parallel to I-84 and connects the Village of Montgomery, in
the Town of Montgomery, located approximately ten miles to the east, with the
City of Middletown. The subject property is located on Route 211, just north of
the interchange formed by Route 211 and State Route 17.
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HVS International, Mineola, New York Description of the Land, Improvements, 9
Zoning, Taxes, and Neighborhood
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Overall, regional access to the Howard Johnson - Middletown is considered to be
good for a lodging facility of this type. The well-developed network of local
and interstate highways increase the subject property's primary market area, and
facilitates the capture of transient travelers.
Local Access and Visibility
Direct access to the subject property for motorists traveling on State Route 17
is accomplished by exiting at Route 211 (Exit 120). Once exited, motorists
travel approximately one-quarter of a mile northeast of the exit intersection to
the Tower Drive intersection. To access the subject property, which is located
on the west side of the road and its median, drivers must make a legal U-turn at
the Tower Drive traffic light and travel southwest for one-half block to access
the subject property's entrance. After final construction on State Route 211 is
completed in the near future, a new, signed entrance directly northwest of the
exit intersection will exist. This entrance will be shared by the Howard Johnson
- -Middletown and the Middletown Motel and will access a government owned and
managed service road parallel to State Route 211 and leading to the subject
property. Motorists traveling on I-84 must either access the property via S.R.
17 or local routes.
Visibility is considered poor for motorists traveling south on S.R. 17, as
motorists do not gain sight of the property until after the exit decision point.
For motorists traveling north on S.R. 17, visibility is considered fair. The
subject property is not visible from I-84. Overall, the subject site is
considered suitable for a property of this type.
Airport Access
After highway transportation, the second primary mode of transportation into the
area is air travel to Stewart Airport, located approximately 20 miles (roughly a
25-minute drive) northeast of the subject property, in Newburgh, New York. The
subject property is not considered to be well located with respect to this
facility, and does not receive any direct airport-related visitation, such as
airline crews or delayed passengers.
Access to Local Demand Generators
The subject property's proximity to demand generators of transient visitation is
good. The following table outlines some of these major demand generators and
their respective distances from the subject site.
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Table 3-1 Local Demand Generators
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Approximate Distance Approximate Driving
Demand Generator from Subject Site (in Miles) Time (in Minutes)
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U. S. Military Academy - West Point 20.0 30
Big V Supermarkets 8.0 10
Empire Blue Cross/Blue Shield 3.0 5
Horton Memorial Hospital 3.0 5
Minolta 5.0 8
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The subject site is centrally located with regard to many of the area's demand
generators. Access to most of the nearby generators of visitation is equal to
that of the other competitive lodging facilities.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water Town of Wallkill
Electricity Orange and Rockland Utilities, Central
Telephone Citizens
Oil Wallace Oil
Garbage and Trash Allwaste, Inc.
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and no signs of toxic ground contaminants were visible at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
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Excess Land
The parcel on which the subject property is located appears to be fully
developed. Currently, however, there is an small unpaved portion on the eastern
corner of the lot. According to management, this portion is proposed to be paved
in order to ease congestion and to maximize the size of the existing parking
lot.
Seismicity
Information regarding seismicity was not provided to the appraisers; therefore,
we have assumed that the subject property is not situated in an area of seismic
danger.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Remington Employers Corporation, is presented in the Addenda to this
report.
Land Conclusion
The subject parcel appears to be well suited as the site of a lodging facility.
We have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The subject parcel is a large site with good frontage on State Route 211,
and is accessible from State Route 17.
o The subject parcel consists of a smooth topography.
o A well-developed network of area and interstate highways exist within
close proximity to the subject property.
o All necessary utilities are available to the subject property.
Disadvantages
o Visibility of the site from south S.R. 17 is poor.
o The subject property is neither visible nor directly accessible from I-84,
the nearest interstate.
The advantages exhibited by the subject site are all important characteristics
of a hotel location. The disadvantage of poor visibility is a common attribute
with all of the lodging competitors in the area, and is therefore not considered
to be detrimental to the subject property. It is our opinion that the subject
parcel is well suited for hotel use.
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IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability, attainable occupancy, and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by Remington Employers
Corporation.
Howard Johnson - Middletown is a economy-class lodging facility containing 117
rentable units, +/-1,731 square feet of meeting space, a restaurant which is
currently leased, and appropriate back-of-the-house facilities. The two-story
property opened in 1975, and is 18 years old as of the date of this appraisal.
The hotel was acquired by G.S.R. Hotels III, Limited Partnership (formed by
Middletown New York Hotel Limited Partnership in February, 1994. At the time of
this acquisition, the hotel was in extremely poor condition. Subsequent to the
acquisition, the subject property was extensively renovated, at an estimated
cost of $600,000. In scope, this renovation included the public areas and the
guestrooms. The hotel is now judged to be in relatively good condition, and
management representatives report that all of the building systems are in
working order. The hotel is operated under a license agreement with Howard
Johnson and reportedly meets the standards for lodging facilities of that brand.
Based on our inspection and information provided by Remington Employers
Corporation, the following table summarizes the facilities available at the
subject property.
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Table 3-3 Facilities Summary
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Guestrooms:
Queen Beds 40 Units
Double/Doubles 40
Twin Queens 37
-----
Total 117 Units
Meeting and Banquet Rooms:
Parlor A 1,023 Square Feet
Parlor B 558
Boardroom 150
-----
Total 1,731 Square Feet
Food and Beverage Outlets:
Courthouse Restaurant (Leased)
Recreational & Other Amenities: Indoor Pool, Sauna
Parking Spaces: 208 Spaces
Life Safety Systems: Hard-wired Smoke Detectors
Laundry:
Washers: 1 Speed Queen
1 Milnor
Dryers: 2 Cumming & Landau
1 Speed Queen
Construction Details: Pre-cast Concrete Block
Tar-Rubber Membrane Roof System
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Property Exterior
The hotel structure is set back approximately 150 feet from Route 211. Paved
parking areas accommodating 208 vehicles surround the subject improvements.
Vehicular access to the subject site is made possible by two roadways: Route 211
and its service road. The service road runs parallel to and north of Route 211,
stretching approximately one-quarter of a mile in length. From these roadways,
two vehicular entrances to the subject property can be accessed. The main
entrance originates directly off Route 211, passes across the service road, and
leads directly into the subject property's south parking lot. The second
entrance, located approximately 75 feet west of the main entrance, originates
only off the service road. Both the main entrance and secondary entrance can be
accessed by this service road.
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After entering the site, guests proceed to the hotel's main entrance, which is
located behind the hotel's restaurant, on the west side of the structure.
Service traffic can gain access to the loading dock, which is located at the
southeast side of the subject property.
The exterior of the subject property's guestroom wings consists of a mixture of
white-and-brown split-face brick. All of the guest units have outside sliding
glass doors; those on the second floor are decorated with mock balcony railings.
The reception and lobby building is surfaced in white split- face brick, and is
covered by the traditional Howard Johnson orange roof. The subject property's
restaurant is similar in style to the main lobby building, but features a
turquoise-colored roof.
Construction and Design
The two-story, interior corridor subject property features three wings. The
central wing is situated perpendicular to the other two wings, and houses the
lobby, meeting room, restaurant and lounge, offices, and guestrooms. The east
wing is the most recently constructed section, and includes guestrooms and the
indoor swimming pool and sauna. The west wing houses guestrooms only. All three
wings are connected on the first floor, and thus, guests can reach all areas
without leaving the facility.
Lobby
The subject property's lobby is located directly behind the hotel's Courthouse
Restaurant, and is therefore not highly visible from the subject property's main
entrance. The lobby area can be accessed by two outside entrances - the first,
facing the northwest parking lot, and the second, facing the hotel's west
parking lot. The interior of the subject property's lobby is in good condition
following renovations to its carpeting, furniture fabric, fireplace, and front
desk area, completed in 1995.
Food and Beverage Outlets
The Courthouse Restaurant is the subject property's multi-purpose restaurant
serving typical American cuisine during breakfast, lunch, and dinner, seven days
a week. Operating hours are between 6:00 a.m. and 10 p.m. The breakfast price
range is approximately $2.00 to $6.00, the lunch price range is $5.00 to $9.00,
and the dinner price range is $6.00 to $18.00. The restaurant offers Friday and
Saturday night buffets, as well as Saturday and Sunday brunches.
The restaurant, located immediately south of the hotel's lobby area, is
currently leased out to an independent operator. According to management, the
restaurant will remain leased throughout the projection period. The
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Courthouse Restaurant is in fair condition. However, to match the newly
renovated conditions of the subject property's guest quarters and public space,
the restaurant is in need of renovations.
Meeting and Banquet Space
The meeting rooms are finished with wall vinyl, recessed lighting, and
wall-to-wall carpeting. The finishes are of good quality, and are appropriate
for a hotel of this type. The parlor room, which can be divided by a partition,
is capable of seating 200 people, auditorium-style, and measures +/-1,731 square
feet. The boardroom, furnished with a large, oval table and comfortable seating,
accommodates approximately 12 people, and measures 150 square feet. All of the
meeting spaces have been recently renovated with new carpeting and fluorescent
lighting. These facilities are currently in good condition.
Guestrooms
The Howard Johnson - Middletown offers 117 guestroom units. Of these 117 units,
40 units each contain one queen bed, 40 units contain two double beds, and the
remaining 37 contain twin queen beds. Typical guestrooms are furnished with one
or two beds, one or two bedside tables, a desk, a desk chair, two reading chairs
or a sleeper sofa, a dresser, and a color television set. Walls are covered with
vinyl, and all units feature wall-to-wall carpeting; window treatments consist
of draperies with black-out-linings. Guestroom lighting is appropriate for a
hotel of this type. Most guestroom bathrooms consist of a separate toilet and
vanity area. However, some guestrooms provide bathrooms where the vanity and
toilet area are combined. Heating, ventilation and air conditioning (HVAC) are
provided by individual units located in the exterior wall of each guestroom
unit.
At the time of our inspection, the subject property's guestrooms appeared to be
in good condition, due to their recently completed and on-going hard and soft
goods renovations.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with new carpeting, a neutral
wall covering, wall sconces, and emergency lighting, as well as fire doors and
extinguishers.
Management has created no-smoking sections in all guestroom wings; this type of
amenity costs very little, and requires no structural changes. We expect that
the number of rooms allocated for this purpose will be increased or reduced
depending on demand and guest response.
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Recreational Amenities
The subject property offers an indoor pool and sauna to its guests. Located on
the first floor in the rear of the Howard Johnson, this recreational area was
most recently renovated within the past year. Both the pool deck area and the
inside surface of the pool have been refinished. New pool-side furnishings have
been added, and minor repairs and replacements to the sauna have recently been
completed.
Back-of-the-House Space
The subject property's back-of-the-house space consists of the executive
offices, as well as the maintenance and housekeeping departments. The executive
offices are conveniently situated behind the front desk area; the additional
departments are separately located on the first floor of the structure's central
wing. All of the departments appear to be well maintained and are appropriately
located with respect to the areas that they serve. In addition, the Courthouse
Restaurant's kitchen is readily accessible for those guests needing banquet
service and room service. Based on information provided by Remington Employer
Corporation, all of the subject property's operating systems are in good working
condition.
Vertical Transportation
The subject property does not provide guest elevators.
Heating, Ventilation, and Air Conditioning (HVAC)
Heating, ventilation and air conditioning units are in the process of being
replaced ten at a time. According to property management, the HVAC units are not
a priority at this time, as most of them are currently in reasonably good
working order; however, these units will be replaced over the course of the next
few years.
Fire Protection
The subject property currently holds a fire service contract with Simplex. Smoke
detectors throughout the improvement are hard-wired to a fire panel located
behind the front desk. A copy of this fire contract was not made available to
the appraisers.
Asbestos
According to information provided by management representatives, no asbestos is
present in the subject property's improvements; however, we have not been
provided with an asbestos report to confirm this assertion. The reader should be
advised that any costs associated with asbestos removal or containment may have
an unfavorable impact on the hotel's market value, and the estimate set forth in
this appraisal reflects our value conclusions prior to the deduction of any such
costs. We suggest that interested parties
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initiate an independent analysis regarding current asbestos levels and the
capital expenditures necessary to remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any on-going costs related to ADA regulations are
expected to be funded by normal replacement reserves.
By the end of 1996, the subject property plans to introduce two guestrooms that
will comply with national ADA regulations. These renovations will convert two
current hotel guestrooms located on the subject property's first floor.
Improvements Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
For the purposes of this appraisal, we have assumed that the subject property
will be maintained in its present and renovated condition throughout the assumed
ten-year holding period. Specifically, it is assumed that hotel management will
employ standard preventive maintenance measures, and that a reserve for
replacement fund will be established to provide for the cost of any future
necessary capital expenditures.
ZONING
According to the Town of Wallkill zoning regulations and map, the subject
property is zoned as follows.
PID - Planned Interchange Development.
Hotels and motels are expressly permitted in this zoning district, as are
various other commercial uses. Based on this information, the subject property
appears to conform to local zoning regulations. We assume that all necessary
permits and approvals have been secured (including an appropriate liquor
license), and that the subject property was constructed in accordance with local
zoning ordinances, building codes, and all other applicable regulations.
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ASSESSED VALUE AND TAXES
Property - or ad valorem - tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property taxes can be based on the
value of the real property or the value of the personal property and the real
property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
The taxing jurisdiction governing the subject property assesses real property;
the assessed value ratio is reported to be approximately 40% of market value.
Personal property is not taxed in New York State. The 1996/97 tax rates
applicable to the subject property are $46.73 for the Middletown school
district, and $26.21 for the county, town, fire and highway district, for a
total of $72.64, per $1,000 of assessed value. Benefit fee tax rates for water
in the Silver Lake and Wallkill areas are based on the number of units at the
subject property; the 1996 rates are $20.8095 and $20.018, respectively. Sewer
benefit fee tax rates are based on a per-unit basis for the subject property,
the tax rate is $10.00 for Silver Lake and $7.50 for Wallkill. Historically, the
tax rates have increased at an average annual compounded rate of 3.2% during the
period 1992 to 1996. For the purposes of our projections, we have assumed that
the tax rate will increase by 3.5% - the typical inflation rate, annually during
the projection period. The assessed value for the improved parcel is $1,250,000.
The subject property's actual 1995/96 tax burden is approximately $122,871.
A review of the assessed values of two comparable hotels located in the Town of
Wallkill taxing jurisdiction reveals the following information.
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Table 3-4 Assessed Value of Comparable Hotels
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Total Assessment Assessment per Room
Number ------------------------ ---------------------
Hotel of Rooms Land Improvements Land Improvements
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Super 8 82 $126,000 $ 863,100 $1,537 $10,526
Holiday Inn 102 130,000 1,229,400 1,275 12,053
Source: Town of Wallkill Assessor's Office
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The Super 8 Motel, located immediately northeast of the subject property, was
last assessed in 1982 with a land value of $126,000, an improvement value of
$863,100, and a total assessment of $989,100. The Holiday Inn, located on
Crystal Run Road, approximately three miles southeast of the subject property,
was last assessed in 1996. Its values are more similar to those of the subject
property than those of the Super 8. The Holiday Inn's land value is $130,000,
and its improvement value is $1,229,400, yielding a total assessment value of
$1,359,400.
Applying the projected increases to the 1995/96 tax burden yields the following
forecast of property taxes for the subject property.
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Table 3-5 Forecast of Property Tax Expense (+000)
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1997 Stabilized 1999
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Forecast of Property Taxes $107 $111 $115
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood surrounding the subject property is characterized by retail
outlets, lodging facilities, and restaurants which serve both the local
population and the travelers on S.R. 17. To the west of the subject property
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lies Marine Midland Bank, which shares the same access road as the subject
property. Beyond the bank are a small, non-chain affiliated motel and State
Route 17. To the east are a Super 8 hotel and several small retail outlets.
Across Route 211 are an Olive Garden restaurant, a Mobil gas station, a Walmart
discount store, and an off-track betting facility. Also located across from the
subject property is the entrance to the Galleria Mall, which is not directly
visible from the subject property. The neighborhood surrounding the subject
property is predominantly residential is character.
Route 211 is a six-lane thoroughfare that was recently widened from four lanes,
and is currently still under construction; this project moderately disrupts
local traffic flow, and is expected to be completed by the end of 1996.
Conclusion
The immediate neighborhood fronting the Howard Johnson - Middletown consists
primarily of retail outlets and restaurants. The general location and condition
of the neighborhood are positive attributes for a lodging facility of this type,
particularly with respect to travelers on S.R. 17. Overall, the subject
property's immediate neighborhood appears to be well suited for a hotel of this
type.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the market area
analysis is to review available economic and demographic data to determine
whether the local market will undergo economic growth, stability, or decline. In
addition to predicting the direction of the economy, the rate of change must be
quantified. These trends are then correlated based on their propensity to
reflect variations in lodging demand with the objective of forecasting the
amount of growth or decline in transient visitation by individual market segment
(e.g., commercial, group and meeting, leisure).
Market Area Definition
The subject property is situated in the City of Middletown and the Township of
Wallkill in Orange County, New York. Orange County is politically divided into
20 towns, three cities, and numerous villages and hamlets. The three cities in
Orange County are: Middletown, which is located approximately two miles south of
the subject property; Port Jervis, which is 20 miles southwest of the subject
property; and Newburgh, which is approximately 25 miles northeast of the subject
property. The Town of Wallkill is part of the Newburgh, NY-PA Metropolitan
Statistical Area (MSA). Some demand may also originate from surrounding areas,
including the New York Counties of Westchester, Putnam, and Rockland and the New
Jersey Counties of Passaic and Sussex; however, the impact of these areas is
likely to be minimal.
Originally agricultural in nature, Orange County has more recently become a
focal point of development interest and activity in the greater New York
metropolitan area. This trend has been fueled by three primary factors: the
availability of a good transportation network; proximity to the densely
developed New York metropolitan area; and the relatively low cost of living and
doing business, particularly as compared to other counties in the
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region. Development spurred by these factors first became evident in the 1980s,
and was focused in business parks situated along S.R. 17, I-84, and the New York
State Thruway. Much of this development consisted of warehouse and destination
centers, which benefit directly from the highway network. The regional recession
of the early 1990s slowed the trend of development somewhat. The opening of the
Stewart Airport to commercial traffic in 1990 stimulated further interest in the
county particularly, the area around Newburgh. With the advent of the economic
recovery, the level of development interest and activity has returned to
previous levels. The county now offers more than 25 office and industrial parks
as well as a total of 24.5 million square feet of office, manufacturing, and
distribution space.
Economic and Demographic Data
Based on fieldwork conducted in the area, along with in-house data sources,
various types of economic and demographic data were evaluated to determine
trends in transient demand. A primary source of economic and demographic data
utilized in this analysis is the Complete Economic and Demographic Data Source
as published by Woods & Poole Economics, Inc., a well-regarded forecasting
service based in Washington, DC. Using a database containing over 300 variables
for each county within the nation, Woods & Poole utilizes a sophisticated
regional modeling method to forecast future economic and demographic trends for
each county in the country. The historical data utilized by Woods & Poole
includes county level data for each year from 1969 to 1989 for employment,
earnings and personal income, as published by the Bureau of Economic Analysis,
as well as 1970, 1980, and 1990 census data as published by the Bureau of
Census. All economic data for the years 1990 to 2000 and population data for the
years from 1991 to 2000 are projected by Woods & Poole. All earnings, personal
income and retail sales data in the Woods & Poole database is presented in 1987
constant dollars. It should be noted that the annual percentage changes
indicated in Table 4-2 represent changes in unrounded figures, and may not
calculate, due to rounding.
Population
Although there is no direct correlation between the size of an area's population
and its specific level of visitation, historical and project population trends
often reflect the economic climate of a locale. Between 1980 and 1995, the
population of the Newburgh MSA increased by approximately 80,000 people,
yielding an average annual compounded increase of 1.7% over the 15-year period,
indicating the overall stability of the area's demographic profile. Between 1990
and 1995, the population increased at the
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slower average annual compounded growth rate of 1.2%. This short-term data
suggests that the area's population is starting to increase at a rate that is
more consistent with the national trend, which was 1.1% for the same period.
Forecasts for the period of 1995 to 2000 anticipate a nominal increase of 0.5%,
which, while lower than historical rates, still exceeds the state projection.
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial segment hotel demand; this observation also holds
true for the group and meeting segment if a majority of the meetings are
business oriented.
Retail Sales
Trends in retail sales reflect both changes in population and the propensity of
area inhabitants and visitors to spend money on retail goods. Like population
trends, retail sales have no direct correlation with hotel room night demand,
but they do tend to gauge the economic health and vitality of the market.
Between 1980 and 1995, retail sales in both the Newburgh MSA and Orange County
increased at an average annual compounded rate of 2.5% annually. From 1990 to
1995, Orange County and the Newburgh MSA achieved annual growth rates of 1.8%
and 1.9%, respectively, which were higher than the 1.2% level recorded by the
state as a whole. Projections indicate a slower growth in the Newburgh MSA
between 1995 and 2000, at an average annual compounded rate of 0.3% and 0.4% for
the county and the MSA, respectively; these rates are lower than both the 0.1%
anticipated for the state and the 0.9% national average anticipated for the same
period.
Personal Income
Between 1980 and 1995, personal income in the Newburgh MSA increased at an
average annual compounded rate of 3.0%, while New York State registered growth
of 1.9% annually. From 1990 to 1995, the Newburgh MSA achieved a growth rate of
1.6% annually, which was significantly higher than the 0.5% increase recorded by
the state. Projections indicate a still more rapid increase in the Newburgh MSA
between 1995 and 2000, at an average annual compounded rate of 2.0%; this rate
is higher than both the 1.3% anticipated for the state, but slightly lower than
the 2.3% national average anticipated for the same period.
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Work Force Characteristics
Between 1980 and 1995, a number of employment sectors in the Newburgh MSA
increased. The agricultural industry registered the most significant increase,
at an average annually compounded rate of 5.3%. Other healthy employment sectors
were construction, total trade, and services, which ranged from 2.7% to 4.3%
average annually compounded changes. The finance, insurance, and real estate
(FIRE), transportation, communications and utilities (TCPU), and total
government sectors registered average annual compounded rate increases of 2.3%,
1.3%, and 1.0%, respectively. The only two sectors that registered average
annual compounded rate decreases were farm employment (2.1%) and manufacturing
(1.8%). Projections indicate that the wholesale trade and services sectors will
experience the most significant growth between 1995 and 2000, at 2.3% and 2.0%,
respectively. Only two sectors are projected to decrease annually - the farm and
manufacturing sectors, at 1.2% and 0.5%, respectively, between 1995 and 2000.
The major employers in the Town of Wallkill area represent a cross-section of
hotel demand potential. Some are national in scope, while others operate on a
more local basis; some are engaged in manufacturing, some are retail, and others
are active in transportation. The following table outlines some of the major
employers in Orange County.
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Table 4-1 Major Employers in Orange County
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Number of
Firm Employees
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Big V Supermarkets 1,829
Horton Memorial Hospital 1,150
Empire Blue Cross/Blue Shield 900
St. Lukes Hospital 950
Yellow Freight System 900
Kolmar Labs 750
Arden Hill Hospital 750
Wakefern 700
IBM 639
Mercy Community Hospital 600
Source: The Orange County Partnership
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Office Space
Recognized for its industrial and manufacturing businesses, Orange County - as
well as the Middletown and Wallkill areas - naturally provide a substantial
amount of office space. According to the Orange County Partnership, industrial
office space in parks in Orange County has increased substantially in the late
1980s. From 1984 to 1990, total square footage of office space grew from 850,000
to 7,100,000, and in 1995, total space increased to 11,200,000 square feet.
Office space for the county not found in a park setting has also grown since
1984, albeit, at a slower rate. In 1984, 750,000 square feet of space was
available, compared to today's total of 3,200,000 square feet. Examples of major
corporations in Orange County that occupy this office space include Service
Merchandise of Montgomery Industrial Park, with 850,000 square feet, Empire Blue
Cross/Shield of Crystal Run Corporate Park, with 310,000 square feet, and Tuck
Industries of Middletown, with 300,000 square feet of space. The office parks
specific to the Middletown/Wallkill area are Sunrise Park, Wilson Field Park,
Crystal Run Corporate Park, Mills Heights Industrial Park, and Quickway
Industrial Park.
Highway Traffic
As previously mentioned, the subject property is situated on State Route 211,
approximately one-quarter of a mile north of State Route 17 and two miles
northwest of the interchange formed by I-84 and State Route 17. According to the
New York State Department of Transportation, between 1984 and 1993, traffic
volume on State Route 17 has increased; and between 1989 and 1994, volume
increased slightly on Interstate 84. The average annual compounded growth rates
for S.R. 17 and I-84 during these periods were 4.5% and 1.9%, respectively.
Because the New York State Department of Transportation conducts its traffic
survey approximately every three years, 1993 and 1994 are the last years for
which data has been published.
Airport Traffic
The subject property is situated within an approximate 25-minute drive southwest
of Stewart Airport, which is located in Newburgh, New York. This regional
facility is served by American, Delta, and USAir, as well as several commuter
carriers. Stewart Airport, which opened to commercial traffic in April of 1990,
has grown in popularity in recent years as more business firms have relocated to
Rockland and Putnam Counties. According to airport officials, passenger
enplanements at Stewart Airport increased at an average annual compounded rate
of 4.6% between 1978 and 1983. This growth slowed to 3.9% over the next
five-year term as a result of the on-going airport construction, which closed
the main runway for four months
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HVS International, Mineola, New York Market Area Analysis 26
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during 1986. Between 1992 and 1998, passenger enplanements are expected to
increase at an average annual compounded rate of 4.1%.
Convention Center
The Rockland County Convention and Exhibition Center is located within the
Newburgh MSA. However, due to its relatively distant location and the adequate
supply of rooms in close proximity to this facility, the convention center does
not produce any significant demand for the subject property.
Tourist Attractions
The Hudson Valley area - and more specifically, the Town of Wallkill area -
features a variety of tourist attractions that draw leisure travelers. The most
famous attraction in the area is the U.S. Military Academy in West Point, New
York. This nationally known, time-honored institution offers a variety of
activities. The Information Center, the West Point Museum, and Fort Putnam are
all located near the academy. Other attractions include the Orange County
Fairgrounds - home to the Orange County Speedway, which features weekly races
during the summer months. The Hudson Valley area is also famous for numerous
wineries, festivals and fall foliage tours. Festivals offered in the region
include: "April in Paris," which is held in Middletown; the Orange County
Delaware River Festival, held in Port Jervis; the Renaissance Festival held in
Sterling Forest; and the Fall Foliage Festival.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area is relatively stable, with slow growth anticipated over
the next several years. The following table summarizes the economic and
demographic trends discussed throughout this section. All figures that reflect
dollar amounts have been adjusted for inflation, and thus, reflect real change.
It should be noted that the percent changes indicated in the following tables
are based on unrounded figures, and thus, may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 27
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+,000)
Orange County 1980-1995 260.6 321.5 1.4 %
Newburgh, NY-PA MSA 1980-1995 279.0 357.7 1.7
State of New York 1980-1995 17,566.4 18,195.7 0.2
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population
Orange County 1990-1995 308.8 321.5 0.8
Newburgh, NY-PA MSA 1990-1995 337.4 357.7 1.2
State of New York 1990-1995 18,002.3 18,195.7 0.2
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+,000)
Orange County 1995-2000 321.5 326.6 0.3
Newburgh, NY-PA MSA 1995-2000 357.7 366.1 0.5
State of New York 1995-2000 18,195.7 18,314.7 0.1
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+,000,000)
Orange County 1980-1995 1,539.7 2,226.9 2.5
Newburgh, NY-PA MSA 1980-1995 1,598.5 2,331.9 2.5
State of New York 1980-1995 91,865.8 108,055.2 1.1
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+,000,000)
Orange County 1990-1995 2,034.8 2,226.9 1.8
Newburgh, NY-PA MSA 1990-1995 2,124.2 2,331.9 1.9
State of New York 1990-1995 101,720.0 108,055.2 1.2
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+,000,000)
Orange County 1995-2000 2,226.9 2,262.2 0.3
Newburgh, NY-PA MSA 1995-2000 2,331.9 2,376.4 0.4
State of New York 1995-2000 108,055.2 108,691.5 0.1
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Orange County 1980-1995 5,907.7 6,925.6 1.1
Newburgh, NY-PA MSA 1980-1995 5,729.2 6,518.6 0.9
State of New York 1980-1995 5,229.6 5,938.5 0.9
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Orange County 1990-1995 6,589.5 6,925.6 1.0
Newburgh, NY-PA MSA 1990-1995 6,295.0 6,518.6 0.7
State of New York 1990-1995 5,650.4 5,938.5 1.0
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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Table 4-2 Economic and Demographic Data for Subject Property's Market Area
(Continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Orange County 1995-2000 6,925.6 6,927.2 0.0 %
Newburgh, NY-PA MSA 1995-2000 6,518.6 6,491.1 (0.1)
State of New York 1995-2000 5,938.5 5,934.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and
Drinking Place Sales (+,000,000)
Orange County 1980-1995 104.6 182.0 3.8
Newburgh, NY-PA MSA 1980-1995 114.6 198.0 3.7
State of New York 1980-1995 9,199.4 11,882.1 1.7
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and
Drinking Place Sales (+,000,000)
Orange County 1990-1995 160.7 182.0 2.5
Newburgh, NY-PA MSA 1990-1995 172.6 198.0 2.8
State of New York 1990-1995 10,874.1 11,882.1 1.8
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and
Drinking Place Sales (+,000,000)
Orange County 1995-2000 182.0 192.1 1.1
Newburgh, NY-PA MSA 1995-2000 198.0 210.4 1.2
State of New York 1995-2000 11,882.1 12,228.3 0.6
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and
Drinking Place Sales Per Capita
Orange County 1980-1995 401.3 566.0 2.3
Newburgh, NY-PA MSA 1980-1995 410.7 553.6 2.0
State of New York 1980-1995 523.7 653.0 1.5
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and
Drinking Place Sales Per Capita
Orange County 1990-1995 520.3 566.0 1.7
Newburgh, NY-PA MSA 1990-1995 511.5 553.6 1.6
State of New York 1990-1995 604.0 653.0 1.6
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking
Place Sales Per Capita
Orange County 1995-2000 566.0 588.3 0.8
Newburgh, NY-PA MSA 1995-2000 553.6 574.6 0.7
State of New York 1995-2000 653.0 667.7 0.4
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal
Income (+,000,000)
Orange County 1980-1995 3,511.7 5,288.4 2.8
Newburgh, NY-PA MSA 1980-1995 3,749.4 5,815.0 3.0
State of New York 1980-1995 268,310.1 358,297.4 1.9
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 29
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Table 4-2 Economic and Demographic Data for Subject Property's Market Area
(Continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical
Personal Income (+,000,000)
Orange County 1990-1995 4,946.0 5,288.4 1.3 %
Newburgh, NY-PA MSA 1990-1995 5,373.7 5,815.0 1.6
State of New York 1990-1995 349,724.3 358,297.4 0.5
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+,000,000)
Orange County 1995-2000 5,288.4 5,801.6 1.9
Newburgh, NY-PA MSA 1995-2000 5,815.0 6,409.8 2.0
State of New York 1995-2000 358,297.4 382,633.9 1.3
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Orange County 1980-1995 13,474.0 16,447.0 1.3
Newburgh, NY-PA MSA 1980-1995 13,438.0 16,256.0 1.3
State of New York 1980-1995 15,274.0 19,691.0 1.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal
Income per Capita
Orange County 1990-1995 16,017.0 16,447.0 0.5
Newburgh, NY-PA MSA 1990-1995 15,925.0 16,256.0 0.4
State of New York 1990-1995 19,427.0 19,691.0 0.3
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Orange County 1995-2000 16,447.0 17,765.0 1.6
Newburgh, NY-PA MSA 1995-2000 16,256.0 17,508.0 1.5
State of New York 1995-2000 19,691.0 20,892.0 1.2
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment
- Orange County (+,000)
Farm 1980-1995 2.3 1.7 (2.1)
Agriculture Services, Other 1980-1995 0.6 1.3 5.3
Mining 1980-1995 0.1 0.1 0.3
Construction 1980-1995 3.8 6.5 3.6
Manufacturing 1980-1995 17.0 12.9 (1.8)
Trans., Comm. & Public Utils 1980-1995 5.9 7.1 1.3
Total Trade 1980-1995 22.1 32.8 2.7
Wholesale Trade 1980-1995 4.2 6.1 2.5
Retail Trade 1980-1995 17.9 26.7 2.7
Finance, Insurance, & Real Estate 1980-1995 6.7 9.5 2.3
Services 1980-1995 21.4 40.1 4.3
Total Government 1980-1995 26.3 30.4 1.0
Federal Civilian Govt 1980-1995 4.6 5.9 1.7
Federal Military Govt 1980-1995 6.7 6.7 (0.0)
State & Local Govt 1980-1995 14.9 17.8 1.2
TOTAL 1980-1995 106.2 142.4 2.0
</TABLE>
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Table 4-2 Economic and Demographic Data for Subject Property's Market Area
(Continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment
- Orange County (+,000)
Farm 1990-1995 1.8 1.7 (0.7)%
Agriculture Services, Other 1990-1995 1.2 1.3 2.4
Mining 1990-1995 0.1 0.1 (3.0)
Construction 1990-1995 7.3 6.5 (2.5)
Manufacturing 1990-1995 14.7 12.9 (2.6)
Trans., Comm. & Public Utils 1990-1995 7.4 7.1 (0.8)
Total Trade 1990-1995 32.7 32.8 0.1
Wholesale Trade 1990-1995 6.6 6.1 (1.5)
Retail Trade 1990-1995 26.1 26.7 0.4
Finance, Insurance, & Real Estate 1990-1995 9.1 9.5 0.9
Services 1990-1995 33.8 40.1 3.5
Total Government 1990-1995 31.6 30.4 (0.8)
Federal Civilian Govt 1990-1995 6.2 5.9 (0.9)
Federal Military Govt 1990-1995 7.4 6.7 (1.9)
State & Local Govt 1990-1995 18.0 17.8 (0.3)
TOTAL 1990-1995 139.7 142.4 0.4
Projected Employment
- Orange County (+,000)
Farm 1995-2000 1.7 1.6 (1.2)
Agriculture Services, Other 1995-2000 1.3 1.4 1.3
Mining 1995-2000 0.1 0.1 0.4
Construction 1995-2000 6.5 6.8 1.1
Manufacturing 1995-2000 12.9 12.6 (0.5)
Trans., Comm. & Public Utils 1995-2000 7.1 7.3 0.5
Total Trade 1995-2000 32.8 34.8 1.2
Wholesale Trade 1995-2000 6.1 6.8 2.3
Retail Trade 1995-2000 26.7 27.9 0.9
Finance, Insurance, & Real Estate 1995-2000 9.5 10.1 1.1
Services 1995-2000 40.1 44.2 2.0
Total Government 1995-2000 30.4 30.8 0.3
Federal Civilian Govt 1995-2000 5.9 6.0 0.4
Federal Military Govt 1995-2000 6.7 6.7 0.2
State & Local Govt 1995-2000 17.8 18.0 0.3
TOTAL 1995-2000 142.4 149.7 1.0
</TABLE>
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Table 4-2 Economic and Demographic Data for Subject Property's Market Area
(Continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Traffic Counts
Interstate 84 1989/1992/1994 27,000 32,400 29,671 1.9 %
State Route 17 1984/1990/1993 28,500 39,200 39,200 4.5
Stewart Airport
Historical Passenger Enplanements 1978-1992 197,105 372,420 4.6
Projected Passenger Enplanements 1992-1998 372,420 475,321 4.1
Historical Air Freight 1978-1992 53,120 117,171 5.8
Projected Air Freight 1992-1998 117,171 149,217 4.1
</TABLE>
Sources: Woods & Poole Economics, Inc.; New York State Department of
Transportation
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The Lodging Market Supply and Demand Analysis section of this economic study and
appraisal will relate these historical and projected growth trends to specific
market segments based on their propensity to reflect changes in lodging demand.
This analysis will provide a basis for forecasting changes in room night demand
in the subject property's market area.
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5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 33
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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HVS International, Mineola, New York Overview of External Forces 34
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
non-performing hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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HVS International, Mineola, New York Overview of External Forces 35
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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HVS International, Mineola, New York Overview of External Forces 36
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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HVS International, Mineola, New York Overview of External Forces 37
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $ 91,000 $ 85,000 $ 79,000 $ 80,000 $ 83,000
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Overview of External Forces 38
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 39
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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================================================================================
Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- --------------------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates
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HVS International, Mineola, New York Overview of External Forces 41
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that during periods of prosperity, room rates are a good hedge against
inflation; this was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
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HVS International, Mineola, New York Overview of External Forces 42
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forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the average
sales price per room peaked at $75,000. This was more than twice the 1981
average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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HVS International, Mineola, New York Overview of External Forces 43
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================================================================================
Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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HVS International, Mineola, New York Overview of External Forces 44
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================================================================================
Table 5-4 Percent Change in the Hotel Valuation Index
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Percent Change
---------------------
'86-'87 '87-'88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the
<PAGE>
HVS International, Mineola, New York Overview of External Forces 45
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operating results and investment potential of lodging facilities. The following
list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
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HVS International, Mineola, New York Overview of External Forces 46
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o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This is a good indication that hotel values will return to record
levels in the next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell, once
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HVS International, Mineola, New York Overview of External Forces 47
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prices begin to approach levels that allow the existing (or restructured) debt
to be paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results must take into
account at least a portion of any upside created from improved performance,
particularly if the improvement can be readily achieved through management
efficiencies. Capitalization rates based on historical operating income have
fallen during the past several years. Hotel buyers in today's market must be
aggressive in all of their acquisition assumptions. As a result, hotel values in
some parts of the country are approaching the levels registered during the
mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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HVS International, Mineola, New York Lodging Market Supply and Demand 48
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================================================================================
6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Historical supply and demand data compiled by Smith Travel Research (STR) would
typically be utilized to determine lodging trends for the Middletown hotel
market. However, of the four competitive properties in the subject market, only
two contribute to Smith Travel Research. Therefore, in order to provide an
overview of the local hotel market, the data compiled by STR includes not only
the Middletown market area, but the Orange County hotel market as well. The
Orange County data considers the trends of hotels located in its three main
cities - Middletown, Newburgh, and Port Jervis - as well as the neighboring
townships.
Because the STR data scrutinizes a less concentrated group of hotels, the
results presented are not necessarily representative of the local
Middletown/Wallkill hotel market, but rather, are reflective of the general
trends in the region over the past seven years.
The Smith Travel Research information is presented in the following table, along
with the marketwide occupancy, average rate, and rooms revenue per available
room (RevPAR). RevPAR is calculated by multiplying occupancy by average rate,
and provides an indication of how well rooms revenue is being maximized.
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HVS International, Mineola, New York Lodging Market Supply and Demand 49
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Table 6-1 Historical Room Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1989 1991 1991 1992 1993 1994 1995
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 836 868 964 964 964 964 964
Annual Guestroom Supply 305,140 316,916 351,860 351,860 351,860 351,860 351,860
Percent Change -- 3.9% 11.0% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 206,580 218,038 226,950 236,802 223,431 224,839 232,931
Percent Change -- 5.5% 4.1% 4.3% (5.6)% 0.6% 3.6%
Occupancy 67.7% 68.8% 64.5% 67.3% 63.5% 63.9% 66.2%
Percent Change -- 1.6% (6.3)% 4.3% (5.6)% 0.6% 3.6%
Average Rate $59.10 $57.28 $54.46 $54.32 $54.53 $55.77 $57.14
Percent Change -- (3.1)% (4.9)% (0.3)% 0.4% 2.3% 2.5%
RevPAR $40.01 $39.41 $35.13 $36.56 $34.63 $35.64 $37.83
Percent Change -- (1.5)% (10.9)% 4.1% (5.3)% 2.9% 6.1%
</TABLE>
Year-to-Date
------------------- Average Annual
Compounded Growth
1995 1996 1989 - 1995
- ----------------------------------------------------------------
Number of Rooms 964 964
Annual Guestroom Supply 234,252 234,252
Percent Change -- 0.0% 2.4%
Room Night Demand 153,904 167,490
Percent Change -- 8.8% 2.0%
Occupancy 65.7% 71.5%
Percent Change -- 8.8% -0.4%
Average Rate $56.94 $57.76
Percent Change -- 1.4% -0.6%
RevPAR $37.41 $41.30
Percent Change -- 10.4% -0.9%
The 128-unit Comfort Inn Newburgh opened in 1990.
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Lodging Market Supply and Demand 50
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus,
they are considered relevant to this study.
As shown in the previous STR table, room night demand has increased at an
average annual compounded rate of 2.0% over the period of 1989 to 1995.
Concurrently, the areawide supply of guestrooms increased by 2.4%; the imbalance
between supply and demand resulted in a 0.4% decrease in occupancy over the
six-year period. The average annual compounded rate of 2.0% reflects the
increase in demand from 1989 to 1995. However, during 1995 and 1996, local
highway expansion resulted in an influx of construction contractors needed for
this construction project, which benefited the subject property's local hotel
market - particularly, the Super 8 Motel on State Route 211. A majority of the
impact of this project was realized in 1996, and explains the large 1996
year-to-date 8.8% increase in room night demand. However, demand from
construction workers also influenced 1995, when demand increased by 3.6% over
the previous year. Excluding this data from the range, the average annual
compounded rate from 1989 to 1994 is only 1.7%.
On a calendar-year basis, guestroom supply increased from 836 rooms in 1989 to
868 rooms in 1990, and again to 964 rooms in 1991, as a result of the opening of
the 128-unit Comfort Inn Newburgh in October of 1989, which equates to a 15%
increase in supply. Concurrently, demand increased by only 9.8%, with the result
that occupancy fell by 6.3% in 1991, to 64.5%. The moderate increase in demand
which accompanied the opening of the new rooms suggests that the area was then
experiencing a limited amount of unaccommodated demand; this interpretation is
consistent with the level of occupancy which characterized the market in 1989
and 1990. However, the underlying strength of the market is reflected by the
fact that, in 1991, the area did experience growth. In most markets throughout
the U.S., 1991 was a year of decreasing demand, due to the combined effects of
the deepening national recession and the Gulf War.
The data illustrates a 3.1% decrease in average rate in 1990 and a further 4.9%
decrease in average daily rate in 1991. These decreases reflect the lower rates
offered at the new Comfort Inn, as well as a general increase in
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rate sensitivity throughout the market. This latter trend, which is directly
attributable to the national recession, continued into 1992, when areawide
average rates fell by a further 0.3%.
Demand recovered in 1992, rising by 4.3%. However, in 1993, demand fell by 5.6%,
as the local economy suffered when three major employers in the area - Audas
Automotive, Johnson Controls, and the Orange County Shopping Plaza - closed. In
addition, the previous owner of the subject property declared bankruptcy, and
the Howard Johnson - Middletown was foreclosed by the bank. Occupancy at the
hotel, which comprises 12.1% of the areawide supply, reportedly fell
dramatically. As a result of these events, in 1993, the occupancy dropped by
5.6%, and a similar decline of 5.3% was realized in RevPAR.
In 1994, demand grew by 0.6%, and both occupancy and average rate began to
recover from the events of the early 1990s. Further increases were achieved in
1995, although, as previously mentioned, some of the 3.6% increase in demand
realized in 1995 is attributable to construction crew activity; the same is true
of the 8.8% increase reported for the year-to-date 1996. A positive trend
indicated by the more recent data is the increase in average rates which has
occurred in 1995 and year-to-date 1996. The construction demand is characterized
by extremely low rates, well below the areawide average of $57.00. Thus, the
fact that the average rate has climbed during these two years suggests that
local hotels are achieving rate growth in all other segments of the market.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the Middletown,
New York area is generated primarily by the following three market segments.
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Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 distribution of accommodated hotel room night
demand as follows.
================================================================================
Table 6-2 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 57,000 63% 16,000 59%
Meeting and Group 8,000 9 3,000 11
Leisure 25,000 28 8,000 30
------ --- ------ ---
Totals 90,000 100% 27,000 100%
- --------------------------------------------------------------------------------
According to the previous table, commercial demand currently predominates in the
local market area, accounting for approximately 63% of the room night demand,
compared to the 59% level registered for this segment at the subject property.
Leisure demand follows, with a 28% share of the room night demand, compared to
the subject property's 30% share. Meeting and group generates a 9% share of the
market, which is similar to the Howard Johnson's 11% total in this segment.
Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual business people who are visiting
various firms in the subject property's market. Commercial demand in the subject
property's market is generated primarily by individual business people visiting
local firms, manufacturing plants, and retail companies such as Nationwide
Insurance, Reynold's Metals Company, Vac Service Corporation, and the retail
stores at the Galleria Mall and other local retail centers. A significant
portion of commercial demand is generated by
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construction contractors, due to the volume of road construction currently
occurring on Middletown's local highways. Other customers include business
travelers passing through the area en route to another destination who stop at
local highway-oriented lodging facilities because they provide a convenient
resting point. In addition, a smaller portion of commercial demand is comprised
of federal and state employees; this government portion is divided between
Orange County government offices and the Federal and State Prisons, located in
Otisville.
We estimate that commercial demand equates to approximately 59% of the subject
property's total occupancy. Because the market lacks a selection of full-service
lodging facilities that appeal to corporate guests, the subject property should
remain competitive in this segment.
Commercial demand is strongest Monday through Thursday nights, declines
significantly on Friday and Saturday, and increases somewhat on Sunday. The
typical length of stay ranges from one to three days, and the rate of double
occupancy is a low 1.2 to 1.3 people per room. Commercial demand is relatively
constant throughout the year, although some declines are noticeable in late
December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
According to the Chamber of Commerce, in the subject property's market area, a
total of 24.5 million square feet of office, manufacturing, and distribution
space has been zoned and approved; of this, only 11 million square feet have yet
been developed. Growth in total employment has been increasing in the past two
years. Currently, the area's unemployment rate is 4.0% - an improvement over
last year's 4.5% level. Over 11,000 people are employed in local commercial
industries, creating an annual payroll of over $350,000,000. According to
sources at the Orange County Partnership, numerous large businesses have
recently relocated to the area, and additional businesses are either relocating
to Orange County or expanding in the near future. It is estimated that these
relocations and expansions will generate approximately 300 new jobs. Several of
these companies include Amscan, Remee Products, Metroplex, and Fleurcham. Over
the long term, these trends should support a moderate increase in commercial
demand.
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Smith Travel Research estimates that total hotel demand in the Orange County
market rose by 3.6% in 1995 and by 8.8% in 1996. As previously mentioned, much
of this growth is attributed to the influx of demand from construction crews.
Because this project is expected to be completed by the end of 1996, we forecast
that commercial demand will decrease by 3% in 1997, due to the eventual loss of
construction contractors who have completed their work. Thereafter, we project
that commercial demand will grow by 3% in 1998 and 1999, and that it will
stabilize at 2% thereafter.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
A majority of the meeting and group demand in the subject property's area is
generated by local businesses in the form of exhibits, meetings, seminars, and
training sessions. Additional meeting and group demand is generated by
non-commercial organizations such as professional societies, state associations,
social and theatrical groups, tour groups, sports teams and weddings. Examples
of groups visiting the Howard Johnson include theatrical and musical groups that
perform at the local Paramount and Lician theaters, as well as a yearly
fireman's convention.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on
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commercial travel also affect meeting and group demand. The exception is
non-commercial meetings, which are tied to the economic factors that influence
leisure travel. It should be noted that meetings and similar events are booked
in advance, and thus, growth in this segment tends to lag slightly behind
increases in commercial demand.
In light of the above information and the relevant economic and demographic
trends, we estimate that meeting and group demand in the subject property's
market area will increase by 2% in 1997 through 1999, and that it will stabilize
at 1% in 2000 and throughout the remaining projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. Leisure demand in the subject property's
market is generated by the attractions associated with the Hudson Valley region,
including West Point Military Academy, several wineries, fall foliage tours,
summer camps, and several Orange County festivals and fairs. Local attractions
include Orange County Fairgrounds and Motor Speedway. Most of the leisure
travelers who visit the subject property's area arrive during the summer and
fall months because of the weather and scenery. During these periods, area
hotels frequently reach maximum capacity.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections.
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Two indicators of leisure demand, which include traffic counts and airport
statistics, have produced growth rates ranging between 1.9% and 4.5% in the past
eight years. Based on this data, we estimate that leisure demand in the
Middletown market area will increase at an average annual compounded rate of 1%
over the projection period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rate
-----------------------------------------
1997 1998 1999 2000 2001 2002
- -------------------------------------------------------------------------------
Commercial -3.0% 3.0% 3.0% 2.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 1.0 1.0 1.0
Leisure 1.0 1.0 1.0 1.0 1.0 1.0
Annual Average Growth 1.9% 13.1% 2.1% 1.5% 1.5% 1.5%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Orange County area is served by
numerous hotels and motels, a majority of which are located in the principal
Cities of Middletown, Newburgh, and Port Jervis. The balance of the county's
rooms inventory is situated in the neighboring townships, generally along the
highways which traverse Orange County. The subject property is situated in the
Middletown market. We have identified three properties that are considered
primarily competitive with the Howard Johnson - Middletown. Including those of
the subject property, these primary competitors contain a total of 355 rooms.
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Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors. This information was compiled from personal interviews,
inspections, lodging directories, and our in-house library of operating data.
The table also sets forth each property's penetration factors; penetration is
the ratio between a specific hotel's operating results and the corresponding
data for the market. If the penetration factor is greater than 100%, the
property is performing better than the market as a whole; conversely, if the
penetration is less than 100%, the hotel is performing at a level below the
marketwide average.
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Table 6-4 Primary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
Meeting Meeting ----------------------- --------------------------
Year Number Space Space/Room Meeting Average
Property/Location Opened of Rooms (Sq. Ft.) (Sq. Ft.) Comm. & Group Leisure Occupancy Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
551 Route 211 East 1978 117 1,731 15 60% 10% 30% 60.9% $49.86 $30.36
Holiday Inn
122 Crystal Run Road 1973 102 2,450 24 60 20 20 68.0 76.00 51.68
Super 8
563 Route 211 East 1981 82 0 0 70 0 30 75.0 39.00 29.25
Days Inn
P.O.Box 279, Route 17 M 1988 54 0 0 65 0 35 68.0 55.00 37.40
- ------------------------------------------------------------------------------------------------------------------------------
Totals and Averages 355 1,045 10 63% 9% 28% 67.3% $55.45 $37.30
<CAPTION>
Estimated 1996
--------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate RevPAR Penetration Penetration
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
551 Route 211 East 62.0% $54.00 $33.48 89.5% 86.1%
Holiday Inn
122 Crystal Run Road 68.0 76.00 51.68 98.2 132.9
Super 8
563 Route 211 East 82.0 37.00 30.34 118.4 78.0
Days Inn
P.O.Box 279, Route 17 M 68.0 58.00 39.44 98.2 101.4
- ---------------------------------------------------------------------------------------
Totals and Averages 69.3% $56.15 $38.89 100.0% 100.0%
</TABLE>
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<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the primarily competitive hotels in the Middletown market shows a
representation of nationally recognized franchised lodging chains, situated
along the state highways, accounting for 355 rooms in the area. These properties
range in size from 54 rooms at the Days Inn to 117 rooms at the Howard Johnson -
Middletown. Their average age is roughly 16 years. The market demand has a
predominantly commercial orientation; in 1996, this segment contributed 63% of
the overall occupancy. The leisure segment comprised 28% of the total, followed
by the meeting and group segment (at 9%).
In 1996, the primary competitors are expected to achieve an annual overall
occupancy of 69.3% at an average rate of $56.15, yielding RevPAR of $38.89. The
Super 8 achieved the highest occupancy of the primary competitors, at 82%, while
the Holiday Inn is estimated to have received the highest average rate and
RevPAR, at $76.00 and $51.68, respectively. It should be noted that the Super
8's high occupancy and low rates are largely attributable to the fact that it
captured a majority of the local construction clientele.
The subject property has been underperforming the market in terms of occupancy
in the past two years. According to Table 6-4, the Howard Johnson's estimated
occupancies in 1995 and 1996 of 60.9% and 62.0%, respectively, are lower than
those of its primary competitors. As result, the subject property's market
occupancy penetration is only 89.5%. A large factor causing this below-average
performance is most likely because of the recent change in management in 1994
and the frequent changes in general managers thereafter, the lack of an cohesive
on-property marketing effort, and the inconvenience caused by the renovations
which occurred in 1995 and 1996. However, it should be noted that the completion
of the recent renovations have allowed the Howard Johnson to increase its rates
from $49.86 in 1995 to $54.00 in 1996.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Holiday Inn
The Holiday Inn is a two-story, interior-corridor, full-service hotel that is
located at Exit 122, off State Route 17, on Crystal Run Road. The Holiday Inn's
somewhat remote and secluded location inhibits highway-oriented patronage;
however, all of the competitors suffer from poor visibility, and therefore, this
factor is not considered to be a substantial competitive disadvantage for this
property. Facilities include 102 guestrooms, a restaurant, a lounge, and both an
indoor and an outdoor pool.
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The Holiday Inn has been completing major renovations to the interior of its
property since the summer of 1995. These renovations have included new soft
goods in the guestrooms, new carpeting and paint in the guestroom corridors, new
carpeting and furniture fabric in the restaurant, and a completely renovated
lobby area, as well as new carpeting in the meeting rooms. The property is in
very good condition, and is owned and operated by Broadway Middletown Hotel
Corporation.
The Holiday Inn derives approximately 60% of its 1996 room night demand from
commercial travelers, while the leisure and the meeting and group segments each
contribute 20% of its accommodated demand. In 1996, the Holiday Inn is expected
to achieve a 68% occupancy, and the market-leading average rate of $76.00.
Super 8
The Super 8 is an 82-room, two-story, interior-corridor, economy lodging
facility located on Route 211, approximately one-eighth of a mile northeast of
the subject property. Recently, the hotel renovated half of its guestrooms with
new carpeting and wall vinyl. The remaining 41 rooms are scheduled for
completion by 1997. The Super 8 was constructed in 1981, and is in good
condition. Currently, it is owned and operated by Banta Motel Company, Inc.
In 1996, the Super 8 achieved an occupancy of 82%, the highest in the market,
with an average rate of $37.00, yielding a RevPAR of $30.34. We estimate that in
1996, the Super 8 derived approximately 70% of its occupancy from commercial
travelers, and that leisure demanded contributed 30% of the total. Meeting and
group demand is not represented at this property, which contains no meeting
space.
Days Inn
The Days Inn is the smallest of the competitors in the market, with only 54
rooms. This one-story, exterior-corridor property suffers from poor visibility
from Interstate 84. It is located approximately six miles southwest of the
subject property, on Route 17M, and approximately one-half mile southwest of the
Interstate 84/Route 17M interchange. Most recently, the Days Inn completely
gutted and renovated its four basement-level guestrooms, adding new windows,
carpeting and soft goods. The remaining of the Days Inn's guestrooms have not
been recently renovated, and are in fair condition, compared to the subject
property's guestroom units. In addition, new floor tile was added to the lobby/
reception area of this property.
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In 1996, the Days Inn derived approximately 65% of its occupancy from commercial
travelers, while the leisure segment accounted for 35% of the total demand. Like
the Super 8, this property draws no meeting and group demand, as it has no
meeting space. The Days Inn achieved an occupancy of 68% and an average rate of
$58.00, yielding a RevPAR of $39.44.
Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have identified two properties that are proposed or under
development in the Middletown and Goshen areas.
The first hotel project anticipated to impact the subject property's market is
the 98-room Best Western Goshen located approximately six miles southeast of the
subject property, on Hatsfield Lane, in the Westgate Business Park. This
three-story property will have approximately 950 square feet of meeting space,
an indoor pool, and a small coffee shop offering a continental breakfast to
guests. Presently, it is understood that the property will not offer banquet
service, and is scheduled to open on March 1, 1997. This hotel is expected to be
secondarily competitive with the subject property. Based on our review of the
location and proposed facilities, we anticipate that the Best Western will be
25% competitive with the Howard Johnson - Middletown._
The second of the two proposed hotels is located within the subject property's
immediate competitive market - a 100-unit Hampton Inn, which is proposed for
development on a site on Crystal Run Road, near the Ballard Road intersection
and the Holiday Inn. This project is being developed by Hugh McFarland.
According to sources with Promus, this project was approved for development as a
Hampton Inn in July of 1995, and is scheduled to begin construction in April of
1997, with an opening scheduled for January of 1998. Officials with the Town of
Wallkill report that the project has received the required zoning and planning
approvals.
The Hampton Inn is expected to be directly competitive with the subject property
because of the proximate location and anticipated rate position of the new
facility. Moreover, the Hampton Inn brand is extremely strong, and generally
impacts older hotels that hold less effective brand affiliations, such as the
subject property. As a result, the opening of the Hampton Inn is expected to
have a direct impact on the future occupancy of the Howard Johnson - Middletown.
However, this impact will be somewhat mitigated
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by the fact that the Hampton Inn brand is expected to induce some additional
demand into the market area through the central reservation system.
In order to recognize the probable impact of the development of the Hampton Inn
on the subject property, this hotel has been included in our room night
analysis.
Currently, the City of Middletown is defined by a hotel market that consists of
mostly economy-class lodging located on the outskirts of the city, in the Town
of Wallkill. Because of these underlying factors, as well as the area's
motivation to increase local tourism and the economy, regional land owners and
economic development coordinators are currently striving to attract both a
downtown Middletown hotel to promote the retail and business locations within
the city limits and a new moderate or first class hotel located on the Galleria
Mall property. Although we have not explicitly considered the future existence
of such hotels into our analysis, it is possible that properties of these types
may be erected in the distant future.
Conclusion
The competitive environment encompassing the subject property is limited in
scope, with solely full-service and economy lodging facilities comprising the
market. The competitive set contains a total of 355 rooms, and is expected to
achieve an overall 1996 occupancy of 69.3%, and an average rate of $56.15. All
of the competitive properties derive at least 60% of their demand from the
commercial market segment. Leisure demand is strong in the summer and fall, and
is accommodated at all of the properties in the subject property's competitive
set, while meeting and group demand is limited to the subject property and the
Holiday Inn.
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7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
As detailed earlier in the report, the subject property was purchased in 1994.
Because of the recent change in ownership and management, many of the historical
records are not available to the current owner and operator. Because of the lack
of historical data, we were provided with only the operating history for the
last nine months of 1994; therefore, we have insufficient data to comment on the
historical operating performance of the subject property prior to the indicated
period. Based on the information provided and our discussions with on-site
management, 1994 occupancy was estimated to be 58.6%, at an average rate of
$49.09. Please note that these figures are different from those presented later
in the hotel's 1994 operating history, due to the fact that occupancy and
average rate were estimated for the 1994 months of January through April.
As previously discussed, the subject property underwent a renovation once the
property was purchased. As a result, management has been able to slightly
increase average rate, and therefore, it is reasonable to assume that average
rate was higher in 1994 than in previous years. In terms of areawide performance
in occupancy and average rate, data and discussions were outlined in the
previous section.
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Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year-to-Date Through September
------------------------------
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 58.6% 60.9% 59.9% 62.0%
Percent Change -- 4.0% -- 3.5%
Occupancy Penetration 91.7% 92.0% 91.2% 86.7%
Average Rate $49.09 $49.86 $49.30 $53.69
Percent Change -- 1.6% -- 8.9%
Average Rate Penetration 88.0% 87.3% 86.6% 93.0%
RevPAR $28.75 $30.35 $29.55 $33.30
Percent Change -- 5.6% -- 12.7%
RevPAR Penetration 80.7% 80.2% 79.0% 80.6%
Areawide (STR)
Occupancy 63.9% 66.2% 65.7% 71.5%
Percent Change -- 3.6% -- 8.8%
Average Rate $55.77 $57.14 $56.94 $57.76
Percent Change -- 2.5% -- 1.4%
RevPAR $35.64 $37.83 $37.41 $41.30
Percent Change -- 6.1% -- 10.4%
- --------------------------------------------------------------------------------
As illustrated by the above table, the Middletown, New York market experienced
an occupancy increase in 1995, followed by an additional increase in
year-to-date 1996. In keeping with the current market trends, the subject
property's occupancy also experienced an increase from 58.6% in 1994 to 60.9% in
1995 - a level above the areawide occupancy. Marketwide average rate grew from
$55.77 in 1994 to $57.14 in 1995, marking a growth of 2.5%. The subject
property, in turn, increased its average rate from $49.06 in 1994 to $49.86 in
1995, marking an increase of only 1.6%. On a RevPAR basis, the subject property
fell below the market area's growth rate, with a 5.7% increase from 1994 to
1995, compared to the market's percentage increase of 6.1%.
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A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy from 1994 through year-to-date 1996. The first three months of
1994 have been estimated based on information provided by the subject property's
management.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1994 1995 1996
---- ---- ----
Occupancy % Change Occupancy % Change Occupancy % Change
------------------- ------------------- -------------------
January 44.9% -- 42.2% (6.0)% 42.4% 0.5%
February 45.0 -- 41.5 (7.8) 42.4 2.1
March 52.7 -- 47.4 (10.1) 64.3 35.5
April 54.0 -- 51.0 (5.6) 58.2 14.1
May 56.6 -- 59.2 4.6 66.9 13.1
June 63.4 -- 80.3 26.7 75.0 (6.6)
July 64.7 -- 79.9 23.5 72.9 (8.7)
August 76.3 -- 76.5 0.3 72.4 (5.4)
September 73.9 -- 71.7 (3.0) 65.8 (8.3)
October 68.5 -- 74.3 8.5 0.0 0.0
November 58.8 -- 65.4 11.2 0.0 0.0
December 43.2 -- 40.1 (7.2) 0.0 0.0
---- ---- ----- --- ---
Full Year 58.6% -- 60.9% 4.0% NA % NA %
- --------------------------------------------------------------------------------
On a monthly basis, the subject property's recorded occupancy indicates the
seasonal trends that it experiences, which, in general, are identical to those
seasons experienced by other area hotels. Peak months realized in the subject
property's calendar year are June, July, August, and October, since these months
are popular for the leisure market. This popularity is reflected in the recorded
occupancy percentages seen above, ranging in level between the mid-60s and the
low 80s. Shoulder months include March, April, May, and November, with
occupancies ranging in the low 50s to the mid-60s. The slower winter months
include December, January, and February, and reflect occupancies in the 40%
range. Occupancy levels for 1996 have been recorded on a year-to-date through
September basis.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy
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HVS International, Mineola, New York Projection of Occupancy and 66
Average Rate
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HVS
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that we believe would be implemented by competent hotel management to achieve an
optimal mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table. These figures are based on an estimated year end 1996 basis.
================================================================================
Table 7-3 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 57,000 63% 16,000 59%
Meeting and Group 8,000 9 3,000 11
Leisure 25,000 28 8,000 30
------ --- ------ ---
Totals 90,000 100% 27,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The above table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand.
Unaccommodated Demand
Unaccommodated demand refers to individuals who are unable to secure
accommodations in the market because all of the local hotels are filled. These
travelers must defer their trips, settle for less desirable accommodations, or
stay in properties located outside the market area. Because this
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Average Rate
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HVS
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demand did not yield occupied room nights, it is not included in the estimate of
historical accommodated room night demand.
Unaccommodated demand in the Middletown market area results from the high amount
of weekend leisure travel taking place during peak summer months. Approximately
15% of this leisure market is unaccommodated, equating to approximately 3,759
room nights.
================================================================================
Table 7-4 1996 Accommodated and Unaccommodated Demand
- --------------------------------------------------------------------------------
Accommodated
Room Night Unaccommodated Unaccommodated
Market Segment Demand Demand Room Night Demand
- --------------------------------------------------------------------------------
Commercial 57,000 0.0% 0
Meeting and Group 8,000 0.0 0
Leisure 25,000 15.0 3,759
------ -----
Totals 90,000 3,759
- --------------------------------------------------------------------------------
Induced Demand
Induced demand represents the additional room nights that are expected to be
attracted to the market following the introduction of a new demand generator.
Situations that can induce demand include the opening of a new manufacturing
plant, the expansion of a convention center, or the addition of a new hotel with
a distinct chain affiliation or unique facilities.
The Hampton Inn, scheduled to open in January of 1998, is expected to induce
some additional demand in the commercial market through its central reservation
system. Because of the Hampton Inn's reputation for being an extremely strong
brand, it is estimated that approximately 9,125 induced room nights will be
phased into the market annually, beginning in 1998.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 68
Average Rate
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HVS
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International
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================================================================================
Table 7-5 Induced Demand Calculation
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Phase-in: 0% 100% 100% 100% 100% 100%
Commercial 0 9,125 9,125 9,125 9,125 9,125
Meeting and Group 0 0 0 0 0 0
Leisure 0 0 0 0 0 0
----- ----- ----- ----- ----- -----
Totals 0 9,125 9,125 9,125 9,125 9,125
- --------------------------------------------------------------------------------
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
In 1997, the commercial market, which included construction employees, will
decrease in volume due to the completion of the aforementioned road construction
currently taking place on Route 211. The commercial room night demand growth
rate is expected to decline by 3.0% in 1997 as a result. Thereafter, commercial
growth rates are expected to increase once again in 1998, to 3.0%, until
reaching a stabilized level of 2.0% in the Year 2000.
The meeting and group room night demand is expected to increase annually at 2.0%
until stabilizing in the Year 2000, at 1.0%. The leisure segment's room night
demand growth is anticipated to remain stable, at 1.0%, throughout the
projection period.
Total annual forecasted growth rates range between 1.5% and 2.1%, except in
1998, when the annual growth rate will experience a significant increase. The
additional room night contribution made by the new 98-room Best Western Goshen
and the new 100-room Hampton Inn will account for this 13.1% gain.
The following table shows the projected annual change in accommodated and usable
room night demand in the subject property's competitive market.
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HVS International, Mineola, New York Projection of Occupancy and 69
Average Rate
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================================================================================
Table 7-6 Total Usable Room Night Demand
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- -3.0% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 56,963 55,254 56,912 58,619 59,791 60,987 62,207 63,451
Usable Latent -- 0 9,125 9,125 9,125 9,125 9,125 9,125
Meeting and Group
Growth Rate -- 2.0% 2.0% 2.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 7,711 7,865 8,022 8,182 8,264 8,347 8,430 8,514
Usable Latent -- 0 0 0 0 0 0 0
Leisure
Growth Rate -- 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 25,061 25,312 25,565 25,821 26,079 26,340 26,603 26,869
Usable Latent -- 3,016 3,835 3,873 3,912 3,951 3,991 4,031
Totals
Commercial 56,963 55,254 66,037 67,744 68,916 70,112 71,332 72,576
Meeting and Group 7,711 7,865 8,022 8,182 8,264 8,347 8,430 8,514
Leisure 25,061 28,328 29,400 29,694 29,991 30,291 30,594 30,900
------ ------ ------- ------- ------- ------- ------- -------
TOTAL DEMAND 89,735 91,447 103,459 105,620 107,171 108,750 110,356 111,990
Annual Forecasted Growth -- 1.9% 13.1% 2.1% 1.5% 1.5% 1.5% 1.5%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a total of 355 guestrooms. However,
because of the new entrants - the 98-room Best Western Goshen and the 100-room
Hampton Inn - an additional 198 guestrooms will be available to the public
between mid-1997 and the beginning of 1998. The following table shows the
projected competitive supply of available rooms and available room nights. To
calculate the annual number of available room nights, the number of available
rooms is multiplied by 365.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 70
Average Rate
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HVS
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International
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================================================================================
Table 7-7 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Overall
Room Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------------------------
Historical 89,735 129,575 69%
1997 91,447 133,955 68
1998 103,459 172,280 60
1999 105,620 175,200 60
2000 107,171 175,200 61
2001 108,750 175,200 62
2002 110,356 175,200 63
2003 111,990 175,200 64
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
The overall competitive occupancy of the immediate market historically and in
1997 produce levels of 69% and 68%, respectively. In 1998, a significant
decrease in marketwide occupancy is expected - to a level of 60%, reflecting the
dilution of the room night supply by the new entrants. Thereafter, the
marketwide occupancy is expected to remain a stable levels in the low- to mid-60
percent range.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, or leisure), or the number of room nights
actually accommodated per year, per room, per market segment. For example, if a
hotel has a commercial competitive index of 190, each room in the property is
occupied 190 times a year by a commercial traveler. The competitive index is
calculated by dividing a hotel's annual accommodated room night demand in a
particular market segment by that property's room count. Competitive indexes
will be used to illustrate each property's position in the market based on its
ability to compete with other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the market ranged from
136 at the subject property to 210 at the Super 8_ - the most competitive
property in the commercial market in 1996. The Days Inn followed in
competitiveness, with an index of 161, while the Holiday Inn achieved a
competitive index of 149.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 71
Average Rate
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HVS
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Because of the recent renovations to the subject property's guestrooms and its
initiative to implement a more aggressive marketing strategy by hiring a
full-time, on-property sales manager, the Howard Johnson's competitive index
within the commercial market is expected to rise to 140 in 1997, and to gain an
additional five points in 1998. In contrast, the Super 8 is expected to
experience a decrease in its commercial competitive index; in 1997, its
competitive index is expected to drop 20 points due to the loss, in that year,
of road construction contractors, which is currently a significant portion of
the Super 8's clientele. The proposed Hampton Inn and the Best Western Goshen
will gradually become more competitive within the commercial market as they
establish reputations for themselves. Ultimately, the Hampton Inn will achieve a
competitive index of 200 in the Year 2000, becoming the market leader, while the
Best Western is expected to stabilize with a 140 competitive index in 1999. The
Holiday Inn and the Days Inn are not expected to experience any change within
the commercial market. The following table shows the projected commercial
segment competitive indexes of the competitive set.
================================================================================
Table 7-8 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 136 140 145 145 145 145 145
Holiday Inn 149 149 149 149 149 149 149
Super 8 210 190 190 190 190 190 190
Days Inn 161 161 161 161 161 161 161
Proposed Hampton Inn 0 0 180 190 200 200 200
Best Western Goshen 0 120 130 140 140 140 140
- --------------------------------------------------------------------------------
Meeting and Group Segment
The subject property's guestroom and meeting room renovations are once again
responsible for the slight improvement in the Howard Johnson meeting and group
competitive index, which rises two points in 1997 and stabilizes thereafter. The
Best Western Goshen, entering the market in July, 1997, is not expected to be
largely competitive within the subject property's immediate market. The hotel's
competitiveness within the meeting and group segment begins at a level of 10,
which increases to a level of 15 as it establishes itself in the market. The
following table illustrates the competitive indexes in the meeting and group
segment.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 72
Average Rate
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================================================================================
Table 7-9 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 23 25 25 25 25 25 25
Holiday Inn 50 50 50 50 50 50 50
Super 8 0 0 0 0 0 0 0
Days Inn 0 0 0 0 0 0 0
Proposed Hampton Inn 0 0 0 0 0 0 0
Best Western Goshen 0 10 12 15 15 15 15
- --------------------------------------------------------------------------------
Leisure Segment
The only noticeable changes within the leisure market are the competitive
indexes of the new and proposed hotels. Again, as the proposed Hampton Inn and
the Best Western Goshen establish their reputations within the market, we expect
that they will each experience a rise in competitiveness. The proposed Hampton
Inn's competitive level is expected to grow from 80 to 90 between 1998 and 2001,
when it will share the market leader position with the Super 8, while the Best
Western Goshen will realize growth from 50 to 60 between 1997 and 1999. The
proposed Hampton Inn is expected to achieve higher indexes than the Best Western
because of its closer proximity to the subject property. The following table
illustrates the competitive indexes in the leisure segment.
================================================================================
Table 7-10 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 68 68 68 68 68 68 68
Holiday Inn 50 50 50 50 50 50 50
Super 8 90 90 90 90 90 90 90
Days Inn 87 87 87 87 87 87 87
Proposed Hampton Inn 0 0 80 85 90 90 90
Best Western Goshen 0 50 55 60 60 60 60
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 73
Average Rate
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HVS
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International
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Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
================================================================================
Table 7-11 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000
------------------------------------------
Commercial
Demand 55,254 66,037 67,744 68,916
Market Share 0.2859 0.2225 0.2149 0.2122
Capture 15,797 14,693 14,559 14,626
Meeting and Group
Demand 7,865 8,022 8,182 8,264
Market Share 0.3591 0.3514 0.3482 0.3482
Capture 2,824 2,819 2,849 2,878
Leisure
Demand 28,328 29,400 29,694 29,991
Market Share 0.3092 0.2349 0.2264 0.2233
Capture 8,758 6,906 6,724 6,696
------------------------------------------
Total Capture 27,379 24,418 24,133 24,200
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 117 x 365) produces the
projected occupancy percentage.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 74
Average Rate
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================================================================================
Table 7-12 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000
-------------------------------------------
Total Room Nights
Captured/Year 27,379 24,418 24,132 24,200
Available Room Nights 42,705 42,705 42,705 42,705
Occupancy 64.11% 57.18% 56.51% 56.67%
Rounded 64% 57% 57% 57%
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
================================================================================
Table 7-13 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
------------------------------------
1997 64%
1998 57
Stabilized 57
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 58% occupancy in 2002, we have chosen to use a stabilized level of 57_%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe that it is equally possible for new competition and temporary economic
downturns to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The
<PAGE>
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Average Rate
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projected average rate and the anticipated occupancy percentage are used to
forecast rooms revenue, which, in turn, provides the basis for estimating most
other income and expense categories.
Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate from 1994 through year-to-date 1996.
================================================================================
Table 7-14 Subject Property's Occupancy and Average Rate by Month
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
Average Average Average
Occupancy % Chg Rate % Chg Occupancy % Chg Rate % Chg Occupancy % Chg Rate % Chg
-------------------------------- ----------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 44.9% -- $45.47 -- 42.2% (6.0)% $47.01 3.4 % 42.4% 0.5% $48.33 2.8 %
February 45.0 -- 45.47 -- 41.5 (7.8) 50.15 10.3 42.4 2.1 48.62 (3.1)
March 52.7 -- 44.41 -- 47.4 (10.1) 50.26 13.2 64.3 35.5 49.62 (1.3)
April 54.0 -- 47.98 -- 51.0 (5.6) 49.38 2.9 58.2 14.1 50.50 2.3
May 56.6 -- 50.90 -- 59.2 4.6 50.04 (1.7) 66.9 13.1 55.53 11.0
June 63.4 -- 51.00 -- 80.3 26.7 50.72 (0.5) 75.0 (6.6) 54.10 6.7
July 64.7 -- 51.89 -- 79.9 23.5 48.80 (6.0) 72.9 (8.7) 57.02 16.8
August 76.3 -- 50.10 -- 76.5 0.3 48.02 (4.2) 72.4 (5.4) 60.15 25.3
September 73.9 -- 48.59 -- 71.7 (3.0) 50.02 2.9 65.8 (8.3) 58.33 16.6
October 68.5 -- 52.25 -- 74.3 8.5 51.86 (0.7) -- -- -- --
November 58.8 -- 49.39 -- 65.4 11.2 50.80 2.9 -- -- -- --
December 43.2 -- 47.12 -- 40.1 (7.2) 50.91 8.0 -- -- -- --
---- ---- ------ --- ---- ---- ------ ---- ---- ---- ------ ----
Weighted Average 58.6% -- $49.06 -- 60.9% 4.0 % $49.86 1.6 % NA % NA % 54.23 8.8 %
</TABLE>
- --------------------------------------------------------------------------------
The above table underscores the correlation between a hotel's occupancy and its
average rate: as occupancy increases, rates tend to follow. On a monthly basis,
the Howard Johnson - Middletown achieves its highest average rates during the
summer months, especially in June, July and October.
The subject property's occupancy, as mentioned previously in this section,
varies in level depending on the season of the year. Average rate, while in
general, is parallel to trends in occupancy levels, remains at a fairly stable
level in the subject property's case. Average rates in 1995 ranged between
$47.01 and $51.86 an approximate $5.00 spread. Year-to-date 1996 rates range
from $48.33 to $60.15 - an approximate $12.00 spread. The subject property
experienced a rate increase of 1.6% between 1994 and 1995.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 76
Average Rate
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Competitive Positioning
The Howard Johnson - Middletown's average rate will be projected using a
competitive positioning method. This technique begins with an analysis of the
average rates achieved by the subject property and its competitors. These rates
establish a range that reflects certain characteristics of the specific market,
such as price sensitivity, demand orientation, and occupancy. The subject
property's average rate is then compared to those of the hotels to which it is
most similar in terms of size, quality, facilities, amenities, market
orientation, location, management, image, and affiliation. Adjustments are made
to reflect any relevant differences.
Competitive Positioning
The subject property's average rate will be projected using the market
segmentation method. The advantage of this method is its ability to reflect
anticipated changes in the subject property's market mix and their impact on
average rate. This technique begins with an analysis of the room rates commanded
by local hotels in each market segment. Using this information, we can forecast
the subject property's rate on a segment-by-segment basis. The projected rate in
each segment is then multiplied by the number of room nights the hotel is
expected to capture in that segment (as determined earlier in this analysis).
These amounts are totaled, yielding the overall rooms revenue. Average rate is
then calculated by dividing the property's total rooms revenue by the estimated
number of occupied rooms.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the 1996 average rate and RevPAR of the subject
property and its competitors.
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Average Rate
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================================================================================
Table 7-15 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
- --------------------------------------------------------------------------------
Subject Property $54.00 $33.48
Holiday Inn 76.00 51.68
Super 8 37.00 30.34
Days Inn 58.00 39.44
------ ------
Averages $56.15 $38.89
- --------------------------------------------------------------------------------
The subject property occupies a mid- to low-range position in terms of average
rate and RevPAR compared to the rest of the primary market. At $76.00, the
Holiday Inn is the market's rate leader, reflecting the condition of its
facilities and its proximity to Middletown corporate parks. The Super 8 commands
the lowest rate of $37.00 in the immediate market, due to its ability to attract
construction clientele and budget-minded travelers. According to data supplied
by Smith Travel Research, areawide average rate increased by 2.3% in 1994 and
2.5% in 1995. However, average rate statistics for year-to-date through August
of 1996 for the subject market indicate a 1.4% increase over the corresponding
period in 1995. The subject property reported average rate year-to-date gains
for 1996 of 8.9%, most likely as a result of its property renovations. We
anticipate that rate increase at the subject property will continue at a slow
pace in the near term, due to the effect of the new entrants, but will
thereafter continue to increase at a normal rate of inflation.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
Supply and Demand Relationships - The relationship between supply and demand is
one of the factors that determine hotel occupancies and average rates. Strong
markets where lodging demand is increasing faster than supply are often
characterized by rate growth that exceeds inflation. Markets that are overbuilt
or suffering from declining demand are unlikely to exhibit any significant
increases in average rates.
<PAGE>
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o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This temporary condition may
allow other competitors to achieve corresponding gains by effectively
raising the amount the market will bear. However, if the addition to
supply has a severe impact on the occupancy levels of other hotels, price
competition may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
According to market area and demographic statistics mentioned in the previous
market area section, we have decided to use a 3.5% inflation rate. Based on
these considerations, the following table shows our projection of average rate
increases.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 79
Average Rate
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HVS
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================================================================================
Table 7-16 Average Rate Forecast
- --------------------------------------------------------------------------------
Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
- -------------------------------------------------------------------------------
Positioned Base --- --- --- $54.00
1997 68% 1% to 3% 2.0% 55.08
1998 60 3 to 4 3.0 56.73
1999 60 3 to 4 3.5 58.72
2000 61 3 to 4 3.5 60.78
2001 62 3 to 4 3.5 62.90
2002 63 3 to 4 3.5 65.11
- --------------------------------------------------------------------------------
In 1997 and 1998, we have chosen subject property average rate increases of 2%
and 3%, respectively. These rates are lower than our 3.5% projected inflation
rate, due to the impact of the new Best Western Goshen and the proposed Hampton
Inn on the subject property's average rate. In 1999 and thereafter, however, the
Howard Johnson's average rate is expected to increase at 3.5% annually.
<PAGE>
HVS International, Mineola, New York Highest and Best Use 80
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based and
is a product of competitive forces in the marketplace. "The principle of balance
holds that real property value is created and sustained when contrasting,
opposing, or interacting elements are in a state of equilibrium. This principle
applies to relationships among various property components as well as the
relationship between the costs of production and the property's productivity.
The point of economic balance is achieved when the combination of land and
building is optimal (i.e., when no marginal benefit or utility is achieved by
adding another unit of capital). The law of increasing returns holds that larger
amounts of the agents of production produce greater net income up to a certain
point, after which the law of diminishing returns is applied." (2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This differential may occur when a site has existing improvements and
the highest and best use of the land differs from the current use. Nonetheless,
the current property use will continue until the value of the land under its
highest and best use exceeds the value of the property in its current use plus
the cost to remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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In consideration of the foregoing factors influencing development in the
subject's immediate area, it is the appraisers' opinion that the highest and
best use of the subject site, as if vacant, is to hold for future development as
dictated by market conditions.
Furthermore, it is our opinion that the subject property's highest and best use,
as improved, is its current use as a lodging facility.
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9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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hotel valuation process. As noted in Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any non-recurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled, Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
As a basis for developing a forecast of income and expense for the subject
property, we have reviewed the property's operating history. However, because of
the recent change in ownership and management, operating history prior to May,
1994 was not available. The following table represents the subject property's
income and expense statements for the period of May to December in 1994 and
1995; the second following table provides year-to-date 1995 and year-to-date
1996 statements representing the months of January through September. The
following income and expense statements were provided by the Remington Employers
Corporation, and are unaudited. Where applicable, we have reorganized the
statements in accordance with the Uniform System of Accounts for Hotels.
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================================================================================
Table 10-1 Historical Operating Performance ($+,000)
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<TABLE>
<CAPTION>
Calendar Year 1995 1994 (May Through December)
----------------------------------------------- ----------------------------------------------
Total Rooms: 117 117
Occupied Rooms: 25,719 17,144
Complimentary Rooms: 299 334
Days Open: 365 Amount per Amount per 240 Amount per Amount per
Occupancy: 60.9% Percentage Available Occupied 62.2% Percentage Available Occupied
Average Rate: $49.86 of Revenue Room Room $50.10 of Revenue Room Room
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,282 90.0% $10,961 $49.86 $859 90.1% $7,340 $50.09
Telephone 41 2.8 346 1.57 34 3.5 287 1.96
Rental, Laundry, Misc. 66 4.7 567 2.58 39 4.1 336 2.29
Restaurant Rent 36 2.5 305 1.39 21 2.2 180 1.23
Total 1,425 100.0 12,179 55.40 953 99.9 8,142 55.57
- --------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 255 19.9 2,182 9.93 176 20.5 1,504 10.26
Telephone 22 53.1 184 0.84 16 48.4 139 0.95
Rental, Laundry, Misc. 30 44.5 252 1.15 0 0.0 0 0.00
Total 306 21.5 2,618 11.91 192 20.2 1,642 11.21
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DEPARTMENTAL INCOME 1,119 78.5 9,561 43.49 760 79.7 6,500 44.36
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OPERATING EXPENSES
Administrative & General 147 10.3 1,254 5.71 99 10.4 846 5.77
Management Fee 43 3.0 366 1.66 28 3.0 243 1.66
Marketing 51 3.6 438 1.99 9 1.0 78 0.53
Franchise Fees 40 2.8 344 1.57 44 4.7 379 2.59
Property Oper. & Maint. 65 4.6 555 2.52 67 7.0 574 3.92
Energy 122 8.6 1,043 4.74 69 7.2 590 4.03
Total 468 32.9 4,000 18.19 317 33.3 2,710 18.50
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HOUSE PROFIT 651 45.6 5,561 25.30 443 46.4 3,790 25.86
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FIXED EXPENSES
Property Taxes 113 8.0 969 4.41 77 8.1 657 4.48
Insurance 34 2.4 295 1.34 22 2.3 185 1.26
Reserve for Replacement 57 4.0 487 2.22 28 3.0 243 1.66
Equipment Rental 5 0.3 42 0.19 0 0.0 0 0.00
Total 210 14.7 1,793 8.16 127 13.4 1,085 7.40
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NET INCOME $441 30.9% $3,768 $17.14 $316 33.0% $2,705 $18.46
================================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Table 10-2 Year-to-Date Operating Performance ($+,000)
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<TABLE>
<CAPTION>
Year-to-Date Through Sept.: 1995 1996
----------------------------------------------- ----------------------------------------------
Total Rooms: 117 117
Occupied Rooms: 19,552 19,992
Complimentary Rooms: 172 242
Days Open: 273 Amount per Amount per 274 Amount per Amount per
Occupancy: 61.8% Percentage Available Occupied 63.1% Percentage Available Occupied
Average Rate: $48.85 of Revenue Room Room $53.57 of Revenue Room Room
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $955 89.7% $8,163 $48.85 $1,071 90.9% $9,154 $53.57
Telephone 32 3.0 273 1.63 39 3.3 331 1.94
Rental, Laundry, Misc. 51 4.8 437 2.62 42 3.6 361 2.11
Restaurant Rent 26 2.5 225 1.34 27 2.3 229 1.34
Total 1,064 100.0 9,098 54.44 1,179 100.1 10,075 58.96
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DEPARTMENTAL EXPENSES *
Rooms 188 19.7 1,604 9.60 203 19.0 1,735 10.15
Telephone 17 54.9 150 0.89 21 53.9 179 1.05
Rental, Laundry, Misc. 22 43.0 188 1.13 25 58.6 211 1.24
Total 227 21.3 1,942 11.62 249 21.1 2,125 12.44
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DEPARTMENTAL INCOME 837 78.7 7,156 42.82 930 79.0 7,950 46.53
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OPERATING EXPENSES
Administrative & General 108 10.2 926 5.54 122 10.3 1,039 6.08
Management Fee 32 3.0 273 1.63 35 3.0 302 1.77
Marketing 38 3.6 325 1.95 44 3.7 377 2.21
Franchise Fees 30 2.8 256 1.53 35 2.9 296 1.73
Property Oper. & Maint. 49 4.6 416 2.49 59 5.0 504 2.95
Energy 95 8.9 810 4.85 110 9.4 943 5.52
Total 352 33.1 3,005 17.98 405 34.3 3,461 20.25
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HOUSE PROFIT 486 45.6 4,151 24.84 525 44.7 4,489 26.28
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FIXED EXPENSES
Property Taxes 85 8.0 724 4.33 108 9.2 926 5.42
Insurance 27 2.5 227 1.36 20 1.7 167 0.98
Reserve for Replacement 43 4.0 364 2.18 47 4.0 403 2.36
Equipment Rental 3 0.3 30 0.18 5 0.4 40 0.23
Total 157 14.8 1,345 8.05 180 15.3 1,536 8.99
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME $328 30.8% $2,806 $16.79 $345 29.4% $2,953 $17.29
=================================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Comparable Operating Statements
For purposes of comparison, our discussion addresses year-to-date figures for
1994 and 1995, since data is lacking for year-end 1994, thus making a year-end
statement comparison difficult. These historical income and expense statements
show that the subject property has slightly decreased its overall profitability
from year-to-date 1995 to year-to-date 1996. Specifically, the subject
property's net income as a percentage of revenue has decreased from 30.8% in
year-to-date 1995 to 29.4% in year-to-date 1996, which indicates inconsistent
management, as the subject property is dropping a weaker percentage of revenue
to the bottom line in a stabilized market. Specifically, the inconsistency in
management is a result of the new management in 1994, as well as the high
general manager turnover rate that this particular property has been
experiencing.
In year-to-date 1996, the subject property achieved total revenues of roundly
$1.179 million, which included a rooms revenue of roundly $1.1 million,
constituting 90.9% of total revenues. In year-to-date 1995, the subject property
achieved a rooms revenue of roughly $955,000, which constituted 89.7% of total
revenues. Telephone revenue totaled $39,000 in year-to-date 1996 - up from the
$32,000 level registered in year-to-date 1995. Other income, identified as
Rental, Laundry, Misc. in our statements, which space rentals, laundry, vending,
and other miscellaneous items; this line item decreased slightly in year-to-date
1996. Restaurant rent has held fairly steady in both year-to-date 1995 and 1996,
equating to overall levels of $26,000 and $27,000, respectively.
Departmental expenses equated to 21.1% of total revenues in year-to-date 1996,
which was slightly better than the 21.3% level achieved the previous year. Rooms
expense of $203,000 - or 19.0% of total revenue in year-to-date 1996 - was lower
when compared to the 19.7% level in year-to-date 1995. These rooms expense
percentages are comparable to market averages for properties of this type. Every
departmental expense - as a percentage of revenue - decreased in year-to-date
1996, with the exception of the rental, laundry, and miscellaneous expense,
which increased from $22,000 in year-to-date 1995 to a level of $25,000 in the
subsequent year.
Operating expenses for year-to-date 1996 equated to 34.3% of total revenue,
which was slightly higher than the 33.1% evidenced in year-to-date 1995, which
remained at 3.0%. Every operating expense, with the exception of management fee,
increased as a percentage of revenue in year-to-date 1996, which indicates that
the hotel is becoming less efficient, most likely as a result of the frequent
changes in the hotel's management. House profit
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decreased slightly in year-to-date 1996 to 44.7% of total revenue, compared to
its previous level of 45.6% in year-to-date 1995. These levels are comparable to
industry averages, indicating that the overall levels obtained by the subject
property were fairly good, even though the hotel suffered as a result of its
management.
Overall, in year-to-date 1996 the subject property registered a net income of
$345,000, which is higher than the level of $328,000 registered in year-to-date
1995, but which reflects a decrease in net income as a percentage of gross
revenues. Specifically, as a percentage of total revenue, the subject property
achieved a level of 29.4% in year-to-date 1996 - down marginally from the 30.8%
registered the previous year.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraisers'
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed-and-variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed, and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
61.6%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-3 Base-Year Statement of Income and Expense ($+,000)
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Calendar Year: 1995
-----------------------------------------------
Number of Rooms: 117
Occupancy: 60.9% Percent of Amount per Amount per
Average Rate: $49.86 Total Available Occupied
Occupied Rooms: 25,719 Revenue Room Room
- --------------------------------------------------------------------------------
Revenue:
Rooms $1,282 90.3% $10,961 $49.86
Telephone 48 3.4 412 1.87
Rental, Laundry, Misc. 54 3.8 465 2.12
Restaurant Rent 35 2.5 299 1.36
Total Revenue 1,420 100.0 12,137 55.21
- --------------------------------------------------------------------------------
Expenses:
Rooms * 282 22.0 2,411 10.97
Telephone * 26 53.6 221 1.00
Rental, Laundry, Misc. * 30 54.3 252 1.15
Administrative & General 154 10.9 1,317 5.99
Management Fee 43 3.0 364 1.66
Marketing 73 5.2 626 2.85
Franchise Fees 51 3.6 438 1.99
Property Oper. & Maint. 78 5.5 666 3.03
Energy 140 9.9 1,199 5.46
Property Taxes 100 7.0 854 3.88
Insurance 35 2.5 300 1.36
Reserve for Replacement 57 4.0 485 2.21
Equipment Rental 5 0.3 42 0.19
Total Expenses 1,074 75.6 9,176 41.74
- --------------------------------------------------------------------------------
Net Income $346 24.4% $2,961 $13.47
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-4 Inflation Estimates
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Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1 % 2.3 %
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, Amer. Exp. Finl. Adv. 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
----- -----
Average 3.0 % 2.9 %
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 95
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HVS
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International
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.0% in 1998, increasing to 3.5% annually thereafter.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
----------------------------------------------------------
1997 --- %
1998 3.0
1999 3.5
2000 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed-and-variable component relationships.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 96
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HVS
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International
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------------
Forecast of Occupancy Percentage 64.0 % 57.0 %
Forecast of Average Rate $55.08 $56.73
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Number Forecast of
Calendar Projected Average Number of Days Rooms Revenue
Years Occupancy Room Rate of Units in Year (+,000)
- --------------------------------------------------------------------------------
1997 64 % x $ 55.08 x 117 x 365 = $ 1,505
Stabilized 57 x 56.73 x 117 x 365 = 1,381
1999 57 x 58.72 x 117 x 365 = 1,429
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the de-regulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. De-regulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 97
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HVS
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International
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However, the number of long-distance calls billed per occupied room has declined
as a result of the extensive use of long-distance carrier services that can be
accessed locally or through a toll-free number. When guests charge long-distance
calls to their personal or business accounts in this manner, the hotel loses the
revenue associated with long-distance tariffs and mark-ups, and receives only an
access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed-and-variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-8 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Revenue (+,000) $ 54 $ 50
Percent of Total Revenue 3.3% 3.3%
Amount Per Available Room $ 462 $ 427
Amount Per Occupied Room $ 1.98 $ 2.05
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 98
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HVS
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International
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o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. In the subject property's case, other income is
entitled, "Rental, Laundry, and Misc." in the Howard Johnson's operating
statements. Using this fixed-and-variable relationship, the subject property's
other income is projected as follows.
================================================================================
Table 10-9 Forecast of Other Income (Rental, Laundry, Misc. Revenue)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Rental, Laundry, Misc. Revenue (+,000) $ 59 $ 59
Percent of Total Revenue 3.6% 3.9%
Amount Per Available Room $ 504 $ 504
Amount Per Occupied Room $ 2.16 $ 2.42
- --------------------------------------------------------------------------------
Restaurant rent has historically been considered a separate other-income line
item. According to the subject property's contract with the restaurant tenant,
the lessee agrees and will continue to agree to pay the subject property a
minimum guaranteed rental of $35,000 until the expiration of the contract.
Therefore, our forecast for the restaurant rent revenue will remain stable into
the future. The expiration date of the aforementioned contract extends past the
immediate projection period.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 99
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HVS
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International
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================================================================================
Table 10-10 Forecast of Restaurant Rent Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Restaurant Rent (+,000) $ 35 $ 35
Percent of Total Revenue 2.1% 2.3%
Amount Per Available Room $ 299 $ 299
Amount Per Occupied Room $ 1.28 $ 1.44
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-11 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Rooms Expense (+,000) $ 310 $ 306
Percent of Rooms Revenue 20.6% 22.2%
Amount per Available Room $ 2,650 $ 2,615
Amount per Occupied Room $ 11.34 $ 12.57
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 100
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HVS
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International
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Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-12 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Expense (+,000) $ 28 $ 28
Percent of Telephone Revenue 51.9% 56.0%
Amount per Available Room $ 239 $ 239
Amount per Occupied Room $ 1.02 $ 1.15
- --------------------------------------------------------------------------------
Other Income Expense
Other income expense consists of costs associated with other income, and is
dependent on the nature of the revenue. For example, if a hotel leases its gift
shop to an outside operator, the expenses are limited to items such as rental
fees and commissions. If the property operates its own gift shop, both revenues
and expenses will be higher, and the hotel is responsible for the cost of goods
sold, payroll, and so forth. Using a fixed-and-variable forecasting model, we
project the subject property's other income expense, specifically rental,
laundry, and miscellaneous expense, as follows.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 101
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HVS
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International
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================================================================================
Table 10-13 Forecast of Other Income Expense (Rental, Laundry, & Misc. Expense)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Rental, Laundry, Misc. Expense (+,000) $ 32 $ 32
Percent of Rental, Laundry, Misc. Revenue 54.2% 54.2%
Amount per Available Room $ 274 $ 274
Amount per Occupied Room $ 1.17 $ 1.31
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 102
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HVS
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International
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================================================================================
Table 10-14 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Administrative & General Expense (+,000) $ 169 $ 169
Percentage of Total Revenue 10.2% 11.1%
Amount per Available Room $ 1,444 $ 1,444
Amount per Occupied Room $ 6.18 $ 6.94
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Employers Corporation. Management
fees for Remington equal 3% of total revenue. Based on our review of the current
market for management contracts, we are of the opinion that this fee is
consistent with prevailing market terms. Applying this management fee structure
to the projection of total revenue yields the following forecast of the subject
property's management fee.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 103
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HVS
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================================================================================
Table 10-15 Forecast of Management Fee (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Management Fee Expense $ 50 $ 46
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed, with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a
fixed-and-variable component model.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 104
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HVS
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================================================================================
Table 10-16 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Marketing Expense (+,000) $ 81 $ 80
Percentage of Total Revenue 4.9% 5.2%
Amount per Available Room $ 692 $ 684
Amount per Occupied Room $ 2.96 $ 3.29
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Howard Johnson Franchise System,
Inc. for the use of the company's name, trade marks, and service marks. The
following table illustrates the projection of the subject property's franchise
fee.
================================================================================
Table 10-17 Forecast of Franchise Fee (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Franchise Fees Expense $ 60 $ 55
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year,
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 105
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regardless of the occupancy trend. The quality of initial construction can also
have a direct impact on future maintenance requirements. The use of high-quality
building materials and construction methods generally reduces the need for
maintenance expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-18 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Property Oper. & Maint. Expense (+,000) $ 86 $ 86
Percentage of Total Revenue 5.2% 5.6%
Amount per Available Room $ 735 $ 735
Amount per Occupied Room $ 3.15 $ 3.53
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 106
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and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-18 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Energy Expense (+,000) $ 152 $ 155
Percentage of Total Revenue 9.2% 10.2%
Amount per Available Room $ 1,299 $ 1,325
Amount per Occupied Room $ 5.56 $ 6.37
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-20 Forecast of Property Taxes (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Forecast of Property Taxes $ 107 $ 111
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $38,000 in 1997 (the first projection period). In subsequent
years, this amount is assumed to increase in tandem with inflation. The
following table outlines our projection of insurance expense.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 107
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HVS
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International
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================================================================================
Table 10-21 Forecast of Insurance Expense (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Forecast of Insurance Expense $ 38 $ 39
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-22 Forecast of Reserve for Replacement (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Reserve for Replacement Expense $ 66 $ 61
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 108
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HVS
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Equipment Rental
The Howard Johnson lists a separate fixed expense item called equipment rental.
According to management, this line item represents the money expended on a newly
installed front desk system. The equipment expense item is currently recorded in
the subject property's 1995 operating statement at $5,000. This amount is
expected to remain fairly stable, increasing into the future at the rate of
inflation.
================================================================================
Table 10-23 Forecast of Equipment Rental (+,000)
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Equipment Rental Expense $ 5 $ 5
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning January 1997, and are
expressed in inflated dollars for each year.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 109
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HVS
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================================================================================
Table 10-24 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History: Howard Johnson - Middletown,
Middletown, New York
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
-------------------------------
Calendar Years: 1995 1997 Stabilized
Number of Rooms: 117 117 117
Occupancy: 60.9% 64.0% 57.0%
Average Rate: $49.86 $55.08 $56.73
Days Open: 365 365 365
Occupied Rooms: 25,719 %Gross PAR POR 27,331 %Gross PAR POR 24,342 %Gross PAR POR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,282 90.0% $10,961 $49.86 $1,505 91.0% $12,863 $55.07 $1,381 90.5% $11,803 $56.73
Telephone 41 2.8 346 1.57 54 3.3 462 1.98 50 3.3 427 2.05
Rental, Laundry, Misc. 66 4.7 567 2.58 59 3.6 504 2.16 59 3.9 504 2.42
Restaurant Rent 36 2.5 305 1.39 35 2.1 299 1.28 35 2.3 299 1.44
Total Revenues 1,425 100.0 12,179 55.40 1,653 100.0 14,128 60.48 1,525 100.0 13,034 62.65
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 255 19.9 2,182 9.93 310 20.6 2,650 11.34 306 22.2 2,615 12.57
Telephone 22 53.1 184 0.84 28 51.9 239 1.02 28 56.0 239 1.15
Rental, Laundry, Misc. 30 44.5 252 1.15 32 54.2 274 1.17 32 54.2 274 1.31
Total Dept. Expenses 306 21.5 2,618 11.91 370 22.4 3,162 13.54 366 24.0 3,128 15.04
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,119 78.5 9,561 43.49 1,283 77.6 10,966 46.94 1,159 76.0 9,906 47.61
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 147 10.3 1,254 5.71 169 10.2 1,444 6.18 169 11.1 1,444 6.94
Management Fee 43 3.0 366 1.66 50 3.0 427 1.83 46 3.0 393 1.89
Marketing 51 3.6 438 1.99 81 4.9 692 2.96 80 5.2 684 3.29
Franchise Fees 40 2.8 344 1.57 60 3.6 513 2.20 55 3.6 470 2.26
Property Oper. & Maint. 65 4.6 555 2.52 86 5.2 735 3.15 86 5.6 735 3.53
Energy 122 8.6 1,043 4.74 152 9.2 1,299 5.56 155 10.2 1,325 6.37
Total Operating Expenses 468 32.9 4,000 18.19 598 36.1 5,111 21.88 591 38.7 5,051 24.28
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 651 45.6 5,561 25.30 685 41.5 5,855 25.06 568 37.3 4,855 23.33
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 113 8.0 969 4.41 107 6.5 915 3.91 111 7.3 949 4.56
Insurance 34 2.4 295 1.34 38 2.3 325 1.39 39 2.6 333 1.60
Reserve for Replacement 57 4.0 487 2.22 66 4.0 564 2.41 61 4.0 521 2.51
Equipment Rental 5 0.3 42 0.19 5 0.3 43 0.18 5 0.3 43 0.21
Total 210 14.7 1,793 8.16 216 13.1 1,846 7.90 216 14.2 1,846 8.87
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 441 30.9 3,768 $17.14 $ 469 28.4 $ 4,009 $17.16 $ 352 23.1 $ 3,009 $14.46
====================================================================================================================================
Telephone/Rooms 3.2% 3.6% 3.6%
<CAPTION>
Calendar Years: 1999 2000 2001
Number of Rooms: 117 117 117
Occupancy: 57.0% 57.0% 57.0%
Average Rate: $58.72 $60.77 $62.90
Days Open: 365 365 365
Occupied Rooms: 24,342 %Gross PAR POR 24,342 %Gross PAR POR 24,342 %Gross PAR POR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,429 90.6% $12,214 $58.71 $1,479 90.7% $12,641 $60.76 1,531 90.7% $13,085 $62.90
Telephone 52 3.3 444 2.14 54 3.3 462 2.22 56 3.3 479 2.30
Rental, Laundry, Misc. 61 3.9 521 2.51 63 3.9 538 2.59 66 3.9 564 2.71
Restaurant Rent 35 2.2 299 1.44 35 2.1 299 1.44 35 2.1 299 1.44
Total Revenues 1,577 100.0 13,479 64.79 1,631 100.0 13,940 67.00 1,688 100.0 14,427 69.35
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 317 22.2 2,709 13.02 328 22.2 2,803 13.47 339 22.1 2,897 13.93
Telephone 29 55.8 248 1.19 30 55.6 256 1.23 31 55.4 265 1.27
Rental, Laundry, Misc. 33 54.1 282 1.36 35 55.6 299 1.44 36 54.5 308 1.48
Total Dept. Expenses 379 24.0 3,239 15.57 393 24.1 3,359 16.15 406 24.1 3,470 16.68
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,198 76.0 10,239 49.22 1,238 75.9 10,581 50.86 1,282 75.9 10,957 52.67
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 175 11.1 1,496 7.19 181 11.1 1,547 7.44 188 11.1 1,607 7.72
Management Fee 47 3.0 402 1.93 49 3.0 419 2.01 51 3.0 436 2.10
Marketing 83 5.3 709 3.41 86 5.3 735 3.53 89 5.3 761 3.66
Franchise Fees 57 3.6 487 2.34 59 3.6 504 2.42 61 3.6 521 2.51
Property Oper. & Maint. 89 5.6 761 3.66 92 5.6 786 3.78 95 5.6 812 3.90
Energy 161 10.2 1,376 6.61 166 10.2 1,419 6.82 172 10.2 1,470 7.07
Total Operating Expenses 612 38.8 5,231 25.14 633 38.8 5,410 26.00 656 38.8 5,607 26.95
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 586 37.2 5,009 24.07 605 37.1 5,171 24.85 626 37.1 5,350 25.72
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 115 7.3 983 4.72 119 7.3 1,017 4.89 123 7.3 1,051 5.05
Insurance 40 2.5 342 1.64 42 2.6 359 1.73 43 2.5 368 1.77
Reserve for Replacement 63 4.0 538 2.59 65 4.0 556 2.67 68 4.0 581 2.79
Equipment Rental 6 0.4 51 0.25 6 0.4 51 0.25 6 0.4 51 0.25
Total 224 14.2 1,915 9.20 232 14.2 1,983 9.53 240 14.2 2,051 9.86
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 362 23.0 $ 3,094 $14.87 $ 373 22.9 $ 3,188 $15.32 $ 386 22.9 $ 3,299 $15.86
====================================================================================================================================
Telephone/Rooms 3.6% 3.7% 3.7%
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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================================================================================
Table 10-25 Ten-Year Forecast of Income and Expense: Howard Johnson -
Middletown, Middletown, New York
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years: 1997 1998 1999 2000 2001
--------------- --------------- --------------- --------------- ---------------
Number of Rooms: 117 117 117 117 117
Occupied Rooms: 27,331 24,342 24,342 24,342 24,342
Occupancy: 64.0% % of 57.0% % of 57.0% % of 57.0% % of 57.0% % of
Average Rate: $55.08 Gross $56.73 Gross $58.72 Gross $60.77 Gross $62.90 Gross
- --------------------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,505 91.0% $1,381 90.5% $1,429 90.6% $1,479 90.7% $1,531 90.7%
Telephone 54 3.3 50 3.3 52 3.3 54 3.3 56 3.3
Rental, Laundry, Misc. 59 3.6 59 3.9 61 3.9 63 3.9 66 3.9
Restaurant Rent 35 2.1 35 2.3 35 2.2 35 2.1 35 2.1
Total 1,653 100.0 1,525 100.0 1,577 100.0 1,631 100.0 1,688 100.0
- --------------------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL EXPENSES *
Rooms 310 20.6 306 22.2 317 22.2 328 22.2 339 22.1
Telephone 28 51.9 28 56.0 29 55.8 30 55.6 31 55.4
Rental, Laundry, Misc. 32 54.2 32 54.2 33 54.1 35 55.6 36 54.5
Total 370 22.4 366 24.0 379 24.0 393 24.1 406 24.1
- --------------------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL INCOME 1,283 77.6 1,159 76.0 1,198 76.0 1,238 75.9 1,282 75.9
- --------------------------- --------------- --------------- --------------- --------------- ---------------
OPERATING EXPENSES
Administrative & General 169 10.2 169 11.1 175 11.1 181 11.1 188 11.1
Management Fee 50 3.0 46 3.0 47 3.0 49 3.0 51 3.0
Marketing 81 4.9 80 5.2 83 5.3 86 5.3 89 5.3
Franchise Fees 60 3.6 55 3.6 57 3.6 59 3.6 61 3.6
Property Oper. & Maint. 86 5.2 86 5.6 89 5.6 92 5.6 95 5.6
Energy 152 9.2 155 10.2 161 10.2 166 10.2 172 10.2
Total 598 36.1 591 38.7 612 38.8 633 38.8 656 38.8
- --------------------------- --------------- --------------- --------------- --------------- ---------------
HOUSE PROFIT 685 41.5 568 37.3 586 37.2 605 37.1 626 37.1
- --------------------------- --------------- --------------- --------------- --------------- ---------------
FIXED EXPENSES
Property Taxes 107 6.5 111 7.3 115 7.3 119 7.3 123 7.3
Insurance 38 2.3 39 2.6 40 2.5 42 2.6 43 2.5
Reserve for Replacement 66 4.0 61 4.0 63 4.0 65 4.0 68 4.0
Equipment Rental 5 0.3 5 0.3 6 0.4 6 0.4 6 0.4
Total 216 13.1 216 14.2 224 14.2 232 14.2 240 14.2
- --------------------------- --------------- --------------- --------------- --------------- ---------------
NET INCOME $ 469 28.4% $ 352 23.1% $ 362 23.0% $ 373 22.9% $ 386 22.9%
=========================== =============== =============== =============== =============== ===============
<CAPTION>
Calendar Years: 2002 2003 2004 2005 2006
--------------- --------------- --------------- --------------- ---------------
Number of Rooms: 117 117 117 117 117
Occupied Rooms: 24,342 24,342 24,342 24,342 24,342
Occupancy: 57.0% % of 57.0% % of 57.0% % of 57.0% % of 57.0% % of
Average Rate: $65.10 Gross $67.38 Gross $69.74 Gross $72.18 Gross $74.71 Gross
- --------------------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,585 90.8% $1,640 90.9% $1,698 90.9% $1,757 91.0% $1,818 91.0%
Telephone 58 3.3 60 3.3 62 3.3 64 3.3 66 3.3
Rental, Laundry, Misc. 68 3.9 70 3.9 73 3.9 75 3.9 78 3.9
Restaurant Rent 35 2.0 35 1.9 35 1.9 35 1.8 35 1.8
Total 1,746 100.0 1,805 100.0 1,868 100.0 1,931 100.0 1,997 100.0
- --------------------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL EXPENSES *
Rooms 351 22.1 364 22.2 376 22.1 389 22.1 403 22.2
Telephone 32 55.2 33 55.0 34 54.8 36 56.3 37 56.1
Rental, Laundry, Misc. 37 54.4 38 54.3 40 54.8 41 54.7 43 55.1
Total 420 24.1 435 24.1 450 24.1 466 24.1 483 24.2
- --------------------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL INCOME 1,326 75.9 1,370 75.9 1,418 75.9 1,465 75.9 1,514 75.8
- --------------------------- --------------- --------------- --------------- --------------- ---------------
OPERATING EXPENSES
Administrative & General 194 11.1 201 11.1 208 11.1 215 11.1 223 11.2
Management Fee 52 3.0 54 3.0 56 3.0 58 3.0 60 3.0
Marketing 92 5.3 96 5.3 99 5.3 102 5.3 106 5.3
Franchise Fees 63 3.6 66 3.7 68 3.6 70 3.6 73 3.7
Property Oper. & Maint. 98 5.6 102 5.7 105 5.6 109 5.6 113 5.7
Energy 178 10.2 184 10.2 191 10.2 197 10.2 204 10.2
Total 677 38.8 703 39.0 727 38.8 751 38.8 779 39.1
- --------------------------- --------------- --------------- --------------- --------------- ---------------
HOUSE PROFIT 649 37.1 667 36.9 691 37.1 714 37.1 735 36.7
- --------------------------- --------------- --------------- --------------- --------------- ---------------
FIXED EXPENSES
Property Taxes 127 7.3 132 7.3 136 7.3 141 7.3 146 7.3
Insurance 45 2.6 46 2.5 48 2.6 50 2.6 51 2.6
Reserve for Replacement 70 4.0 72 4.0 75 4.0 77 4.0 80 4.0
Equipment Rental 6 0.3 6 0.3 7 0.4 7 0.4 7 0.4
Total 248 14.2 256 14.2 266 14.2 275 14.2 284 14.2
- --------------------------- --------------- --------------- --------------- --------------- ---------------
NET INCOME $ 401 23.0% $ 411 22.8% $ 425 22.8% $ 439 22.7% $ 451 22.6%
=========================== =============== =============== =============== =============== ===============
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
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HVS International, Mineola, New York Income Capitalization Approach 111
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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================================================================================
Table 10-26 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average Average A Corporate
Year Interest Rate Bond Yield
----------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
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HVS International, Mineola, New York Income Capitalization Approach 113
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find
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HVS International, Mineola, New York Income Capitalization Approach 114
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that lenders who are active in the market are using loan-to-value ratios of 65%
to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-27 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $ 23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
================================================================================
Table 10-28 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus, it inherently incorporates the cost of debt and
equity capital. The terminal capitalization rate can be derived through a
mortgage and equity band of investment technique which calculates the weighted
average cost of the capital used in a hotel investment. Combining the mortgage
financing terms derived previously (namely, a 70% loan-to-value ratio and a
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HVS International, Mineola, New York Income Capitalization Approach 117
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0.111856 debt service constant) with a cash-on-cash equity dividend rate of 12%
produces the following overall capitalization rate.
Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 0.7 x 0.111856 = 0.07830
Equity 0.3 x 0.078299 = 0.02349
-------
Overall Capitalization Rate 0.10179
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 12%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-29 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $3,129,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22%, then $3,129,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $ 2,191,000
Equity Component (30%) 939,000
-----------
Total $ 3,129,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $ 2,191,000
Mortgage Constant 0.111856
-----------
Annual Debt Service $ 245,076
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-30 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $ 469,000 - $ 245,000 = $ 224,000
1998 352,000 - 245,000 = 107,000
1999 362,000 - 245,000 = 117,000
2000 373,000 - 245,000 = 128,000
2001 386,000 - 245,000 = 141,000
2002 401,000 - 245,000 = 156,000
2003 411,000 - 245,000 = 166,000
2004 425,000 - 245,000 = 180,000
2005 439,000 - 245,000 = 194,000
2006 451,000 - 245,000 = 206,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($467,000 / 0.115 ) $ 4,061,000
Less: Brokerage and Legal Fees 122,000
Mortgage Balance 1,578,000
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Net Sale Proceeds to Equity $ 2,361,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-31 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
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Total Property $3,138,000 14.2%
Mortgage 2,196,000 9.4
Equity 941,000 22.0
Note: Whereas the mortgage constant and value are calculated on the basis of
monthly mortgage payments, the mortgage yield in this proof assumes single
annual payments. As a result, the proof's derived yield may be slightly
less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $3,129,000 value is correct, based on the assumptions
used in this approach.
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Table 10-32 Total Property Yield
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Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.2% Cash Flow
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1997 $ 469,000 x 0.875715 = $ 411,000
1998 352,000 x 0.766878 = 270,000
1999 362,000 x 0.671567 = 243,000
2000 373,000 x 0.588101 = 219,000
2001 386,000 x 0.515009 = 199,000
2002 401,000 x 0.451002 = 181,000
2003 411,000 x 0.394949 = 162,000
2004 425,000 x 0.345863 = 147,000
2005 439,000 x 0.302878 = 133,000
2006 4,390,000 * x 0.265235 = 1,164,000
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Total Property Value $ 3,129,000
* 10th year net income of $451,000 plus sales proceeds of $ 3,939,000
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Table 10-33 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $ 245,000 x 0.914275 = $ 224,000
1998 245,000 x 0.835899 = 205,000
1999 245,000 x 0.764242 = 187,000
2000 245,000 x 0.698728 = 171,000
2001 245,000 x 0.638830 = 157,000
2002 245,000 x 0.584066 = 143,000
2003 245,000 x 0.533997 = 131,000
2004 245,000 x 0.488221 = 120,000
2005 245,000 x 0.446368 = 109,000
2006 1,823,000 * x 0.408103 = 744,000
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Value of Mortgage Component $ 2,191,000
*10th year debt service of $245,000
plus outstanding mortgage balance of $ 1,578,000
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Table 10-34 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.0% Cash Flow
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1997 $ 224,000 x 0.819654 = $ 184,000
1998 107,000 x 0.671832 = 72,000
1999 117,000 x 0.550669 = 64,000
2000 128,000 x 0.451358 = 58,000
2001 141,000 x 0.369957 = 52,000
2002 156,000 x 0.303237 = 47,000
2003 166,000 x 0.248549 = 41,000
2004 180,000 x 0.203724 = 37,000
2005 194,000 x 0.166983 = 32,000
2006 2,567,000 * x 0.136868 = 351,000
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Value of Equity Component $ 938,000
*10th year net income to equity of $206,000
plus sales proceeds of $ 2,361,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.2%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 7.2% to 21.1%, it is our opinion that a 14% discount factor would be
appropriate for the Howard Johnson - MiddletownHoward Johnson - Middletown. The
following table illustrates the discounted cash flow analysis using a 14%
discount factor.
================================================================================
Table 10-35 Discounted Cash Flow Analysis
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Discount
Calendar Net Factor Discounted
Year Income @ 14.0% Cash Flow
--------------------------------------------------------------
1997 $ 469,000 0.87719 $ 411,404
1998 352,000 0.76947 270,853
1999 362,000 0.67497 244,340
2000 373,000 0.59208 220,846
2001 386,000 0.51937 200,476
2002 401,000 0.45559 182,690
2003 411,000 0.39964 164,251
2004 425,000 0.35056 148,988
2005 439,000 0.30751 134,996
2006 4,390,043 * 0.26974 1,184,187
Estimated Market Value: $ 3,163,030
(Say): $ 3,200,000
Reversion Analysis
11th Year's Net Income $ 467,000
Capitalization Rate 11.5%
Total Sales Proceeds $ 4,060,870
Less: Broker & Legal @ 3.0% 121,826
-----------
Net Sales Proceeds $ 3,939,043
*10th year net income of $451,000 plus sales proceeds of $ 3,939,043
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled, Hotels and Motels: A Guide to Market Analysis,
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Investment Analysis and Valuations,(1) Method Two (which discounts the projected
net income and reversion using an overall discount rate, or total property
yield) "does not consider the impact of mortgage debt, leverage and the specific
equity demands of typical hotel investors. . . . This technique is simple but
less reliable because the derivation of the discount rate has little support."
In light of this consideration, we have relied on the $3,129,000 value
conclusion indicated by Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thereby diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
--------
Property: Super 8
Location: 1220 Dual Highway
Hagerstown, MD
Date of Sale: September, 1995
Sales Price: $1,585,000
Grantor: Rivett Group
Grantee: Mijoe, Inc.
Year Opened: 1984
Number of Rooms: 62
Price per Room: $25,565
Sale #2:
--------
Property: Ramada Inn
Location: 798 E I-10 Service Road
Slidell, LA
Date of Sale: March, 1995
Sales Price: $3,850,000
Grantor: Sydnay Day
Grantee: Capstar Hotels
Year Opened: 1978
Number of Rooms: 140
Price per Room: $27,500
Sale #3:
--------
Property: Econo Lodge
Location: 2451 Riva Road
Annapolis, MD
Date of Sale: October, 1995
Sales Price: $2,260,000
Grantor: NA
Grantee: NA
Year Opened: 1984
Number of Rooms: 69
Price per Room: $32,753
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Sale #4:
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Property: Quality Inn
Location: 6111 Arlington Boulevard
Falls Church, VA
Date of Sale: August 13, 1995
Sales Price: $3,000,000
Grantor: Third Hotel Associates
Grantee: Virginia Hospitality, Inc.
Year Opened: 1966
Number of Rooms: 108
Price per Room: $27,778
In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in 1994. The details of this
transaction are summarized as follows.
Subject Property:
-----------------
Property: Howard Johnson - Middletown
Location: 551 Route 211 East
Middletown, NY
Date of Sale: March, 1994
Sales Price: $1,696,603
Grantor: Nippon Credit Bank, Ltd.
Grantee: Chartwell/G.S.R. Hotels III Limited
Partnership, an entity controlled by
Ashford Financial Corporation
Year Opened: 1975
Number of Rooms: 117
Price per Room: $17,445
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The subject property was
acquired by Ashford Financial Corporation from Nippon Credit Bank, Ltd. in March
of 1994 as part of a purchase of a mortgage loan secured by 15 hotel properties.
The outstanding principal balance of the non-performing
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mortgage loan at the time of acquisition was $72,840,000, and the purchase price
was $18,730,000. At the time of the closing, the mortgage loan was the subject
of a settlement agreement between Nippon Credit Bank, Ltd. and Northeast Hotel
Association, Inc., which was the owner of the subject property. The settlement
agreement called for the conveyance of property deeds in lieu of foreclosure, as
well as a cash payment of $2,000,000 for the settlement of guaranty obligations.
The above-listed price represents an allocation of the total package price
rather than a negotiated value for this single asset. Based on our understanding
of the terms of this transaction, we do not believe that this sale was
reflective of the market value of the individual hotel.
The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecast to continue this positive trend. As previously discussed, the market
for hotel investments has also improved significantly, due to changes in lender
and investor attitudes. Finally, the property itself has undergone a significant
renovation, with a total of approximately $600,000 spend on upgrading the
facilities and amenities. For these reasons, we are of the opinion that the 1994
sale involving the subject property is not a reliable indicator of the current
value of the hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific,
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detailed information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $20,700 to $32,800 per room, or $2,400,000
to $3,800,000 for the 117-unit subject property. The income capitalization
approach indicates a value of $3,129,000, which falls within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1975, and will be approximately 21 years
old as of the date of this appraisal. Currently, the interior of the subject
property is in good condition having had recent renovations to its guestrooms,
meeting space and public space. However, the exterior of the Howard Johnson
needs renovations to update its obsolete appearance. The depressed hotel market
conditions that prevailed in the late 1980s and the early 1990s have also led to
a degree of external obsolescence. In our opinion, it is impossible to identify
and quantify the impact of these factors on the property's value with any
accuracy, so we will only estimate the replacement cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled, The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- - ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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HVS International, Mineola, New York Cost Approach 134
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
- --------------------------------------------------------------------------------
Cost No. of
Hotel Cost per Room Rooms Total Cost
--------------------------------------------------------------------------
Building $30,000 117 $3,510,000
FF&E 7,000 117 819,000
Pre-Opening 2,000 117 234,000
Operating Capital 1,500 117 175,500
--------------------------------------------------------------------------
Totals $40,500 $4,738,500
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
<PAGE>
HVS International, Mineola, New York Cost Approach 135
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subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the land.
Land value is then calculated by dividing the economic rent by an appropriate
capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Howard Johnson - Middletown appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3% and 5% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4% of stabilized rooms revenue. The subject property's stabilized
rooms revenue has been deflated to reflect 1996 dollars. The following
calculation shows the derivation of the subject property's economic ground rent.
Stabilized Rooms Revenue (1996 dollars) $ 1,334,300
Rental Percentage 0.04
-----------
Economic Ground Rent $ 53,372
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 4%. Applying this indicated capitalization rate to the
<PAGE>
HVS International, Mineola, New York Cost Approach 136
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subject property's economic ground rent yields the following estimate of land
value.
Economic Ground Rent $53,372 $ 533,720
------------------------ = ------------ =
Capitalization Rate 0.10
Estimated Land Value (Say) $ 530,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 16.9% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
- --------------------------------------------------------------------------------
Cost of the Improvements and FF&E $ 4,738,500
Land Value 530,000
Developer's Profit 526,850
-----------
Total Replacement Cost $ 5,800,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This case
would also reduce the probability of new hotel development, which is not likely
to be feasible under those conditions, and would create an effective barrier to
entry for new competition, thereby reducing the risk associated with the subject
property's income-generating potential. An upward adjustment of the value
indicated by the income capitalization approach is also justified by this
barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation
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HVS International, Mineola, New York Cost Approach 137
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estimates, it is our opinion that the cost approach is inapplicable in
estimating the market value of the Howard Johnson - Middletown. However, we have
estimated the subject property's replacement cost as new, which may set the
upper limit of the hotel's value.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 138
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================================================================================
13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
Income Capitalization $3,129,000
Sales Comparison $2,400,000 - $3,800,000
Cost (Replacement Cost) $5,800,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 139
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $17,445 to $32,754 per available room. The income capitalization approach
indicates a per-room value of approximately $26,818. This information suggests
that a slight upward adjustment of the value indicated by the income
capitalization approach may be warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market of the
fee simple interest in the Howard Johnson - Middletown - Middletown, as of
January 1, 1997, is:
$3,300,000
THREE MILLION THREE HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 140
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This value estimate equates to roundly $28,205 per room, which is well supported
by market sales, and which is approximately 5% higher than the value indicated
by the income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the Howard Johnson - Middletown indicates that the personal
property and fixtures are in good condition following the renovations previously
mentioned in this report.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $7,000 per available room. Assuming an average useful
life of ten years and an effective age of three years, the value of the
furniture, fixtures, and equipment currently in place is approximately $2,100
per room, or a total of $245,700.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that ". . . any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 141
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business and real estate components; without the business expertise necessary to
operate the facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 142
Limiting Conditions
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================================================================================
14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 143
Limiting Conditions
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6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is within the
boundaries of the property described, and that there is no encroachment or
trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 144
Limiting Conditions
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15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor make
provision for the effect of any sharp rise or decline in local or national
economic conditions. To the extent that wages and other operating expenses
may advance during the economic life of the property, we expect that the
prices of rooms, food, beverages, and services will be adjusted to at
least offset those advances. We do not warrant that the estimates will be
attained, but they have been prepared on the basis of information obtained
during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 145
Limiting Conditions
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21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 146
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================================================================================
15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Marie K. Laib personally inspected the property described in this
report; Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings, but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
<PAGE>
HVS International, Mineola, New York Certification 147
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Marie K. Laib
-------------------------------------
Marie K. Laib
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
-------------------------------------
Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
-------------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Main view of the Subject Property
[GRAPHIC OMITTED]
North view of the central & west guestrooms wings
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
East view of the east guestroom wing
[GRAPHIC OMITTED]
South view of the central guestroom wing
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
The front desk
[GRAPHIC OMITTED]
Typical guestroom at the Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Subject Property guestroom corridor
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Typical guestroom bath area at the Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
The Boardroom
[GRAPHIC OMITTED]
Subject Property meeting space: Parlors A & B combined
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
The Courthouse restaurant
[GRAPHIC OMITTED]
The Courthouse lounge
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Subject Property pool area
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Days Inn
[GRAPHIC OMITTED]
The Super 8
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
The Holiday Inn
<PAGE>
TICOR TITLE GUARANTEE COMPANY
SCHEDULE A DESCRIPTION
Title No.: 6194-00510
PARCEL I:
ALL that certain piece or parcel of land, situate in the Town of Wallkill,
County of Orange, State of New York, being more accurately bounded and
described as follows:
BEGINNING at an iron rod set in the northerly line of New York State Route
#211, said rod being the easterly most corner of lands now or formerly of
Marine Midland Bank of Southeastern New York, N.A., Liber 1880 cp 256,
and runs thence along said lands of Marine Midland,
North 11 degrees 50 minutes 52 seconds West 236.9l feet, to an iron rod;
thence along said Marine Midland, and lands now or formerly of Nasar,
Liber 1597 cp 956,
North 46 degrees 51 minutes 40 seconds West 528.63 feet;
thence along the lands now or formerly of Middletown Motel Corporation,
Liber 1964 cp 418,
North 79 degrees 07 minutes 13 seconds East 689.07 feet;
thence along lands now or formerly of Saveat Corporation, Liber 2212 cp
430, and lands now or formerly Orange County Industrial Development
Agency, Liber 2212 cp 749,
South 9 degrees 39 minutes 31 seconds East 619.90 feet;
thence along the northerly line of New York State Route 211, the following
3 courses and distances:
1. South 73 degrees 48 minutes 42 seconds West 80.93 feet;
2. South 70 degrees 14 minutes 48 seconds West 202.00 feet;
3. South 74 degrees 42 minutes 50 seconds West 81.34 feet, to the point
or place of BEGINNING.
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Hotel 1
Management Agreement
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Synopsis of Hotel Management Agreement
Date: May, 1994
Owner: Middletown New York Hotel Limited Partnership
Manager: Remington Employers Corporation
Premises: Hotel and site
Term: 15 years
Renewal: The Manager may elect to exercise any such option
to renew, and shall give Owner notice to that
effect not less than six months prior to the
expiration of the current term.
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of the premises' gross revenues
Termination: May, 2009
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Franchise 1
and License Agreements
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Synopsis of Franchise and License Agreements
Date: May 12, 1994
Licensor: Howard Johnson Franchise Systems, Inc.
Licensee: Middletown New York Hotel Limited Partnership
Term: 15 years
Renewal: Neither party has renewal rights or options.
Fees: 4% (of gross room revenue) Franchise Fee
2% (of gross room revenue) Marketing Fee
2.5% (of gross room revenue) Room Sales Charge
Licensor Services: Marketing Contribution
Reservation System
Licensee Obligations: Renovations in compliance with Howard Johnson
standards
Termination: May 11, 2009
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 1
Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 2
Valuation Formula
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This process can be expressed in two algebraic equations that set forth the
mathematical relationships between the known and unknown variables using the
following symbols.
NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
de = Annual cash available to equity
dr = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
fp = Annual constant required to amortize the entire loan during the
projection period
Rr = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/Sn = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (de) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 3
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI11) by
the terminal capitalization rate (Rr). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11/R(r)),
are calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 4
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 5
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the property's value (V) is the only unknown, this equation can be
solved readily.
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 6
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Table 1: Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
- --------------------------------------------------------------------------------
The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
================================================================================
Table 2: Present Worth of $1 Factor at the Equity Yield Rate
- --------------------------------------------------------------------------------
Present Worth of $1
Calendar Year Factor @22.0%
---------------------------------------------------------------
1997 0.819654
1998 0.671832
1999 0.550669
2000 0.451358
2001 0.369957
2002 0.303237
2003 0.248549
2004 0.203724
2005 0.166983
2006 0.136868
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 x 0.70 x V = 0.078299 V
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 7
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Inserting the known variables into the hotel valuation formula produces the
following.
( 469,000 - 0.078299 V ) x 0.819672 +
( 352,000 - 0.078299 V ) x 0.671862 +
( 362,000 - 0.078299 V ) x 0.550707 +
( 373,000 - 0.078299 V ) x 0.451399 +
( 386,000 - 0.078299 V ) x 0.369999 +
( 401,000 - 0.078299 V ) x 0.303278 +
( 411,000 - 0.078299 V ) x 0.248589 +
( 425,000 - 0.078299 V ) x 0.203761 +
( 439,000 - 0.078299 V ) x 0.167017 +
( 451,000 - 0.078299 V ) x 0.136899 +
((( 467,000 / 0.115 ) - ( 0.03 x ( 467,000 / 0.115 )) -
(( 1 - 0.279638 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
Like terms are combined as follows.
$2,116,167 - 0.376214 V = (1 - 0.70) V
$2,116,167 = 0.67621 V
V = $2,116,167 / 0.67621
V = $3,129,437
Total Property Value as Indicated
by the Income Capitalization
Approach (Say) = $3,100,000
<PAGE>
HVS International, Mineola, New York Qualifications of Marie K. Laib
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Marie K. Laib
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports,
and Investment Counseling)
Summer, 1995 BRISTOL HOTEL COMPANY
Dallas, Texas
Education BA - School of Hotel Administration
Cornell University
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
<PAGE>
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Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
================================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
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Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Howard Johnson Westbury
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Jericho, New York
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Prepared by:
Hospitality Valuation Services
Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, New York 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, New York 10036
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[Letterhead of HVS International]
November 5, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, New York 10036
Re: Howard Johnson Westbury
Jericho, New York
Reference #9610281
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the central Nassau
County area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Appraisal Practice (USPAP),
as provided by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple (subject to
an overlease) interest in the subject property described in this report, as of
January 1, 1997, is:
$3,800,000
THREE MILLION EIGHT HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Sean A. Hehir
Sean A. Hehir
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones, CRE
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore, CRE, MAI, CHA
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary ...................................................... 1
2. Nature of the Assignment ............................................... 3
3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood . 7
4. Market Area Analysis ................................................... 22
5. Overview of External Forces Affecting the U.S. Lodging Industry ........ 38
6. Lodging Market Supply and Demand Analysis .............................. 54
7. Projection of Occupancy and Average Rate ............................... 69
8. Highest and Best Use ................................................... 85
9. Approaches to Value .................................................... 87
10. Income Capitalization Approach ........................................ 90
11. Sales Comparison Approach ............................................. 126
12. Cost Approach ......................................................... 134
13. Reconciliation of Value Indications ................................... 141
14. Statement of Assumptions and Limiting Conditions ...................... 145
15. Certification ......................................................... 148
Addenda
Photographs of the Subject Property
Photographs of the Competition
Legal Description
Synopsis of Hotel Management Agreement
Synopsis of Overlease Agreement
Explanation of the Simultaneous Valuation Formula
Qualifications
Sean A. Hehir
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Howard Johnson Westbury
Location: 120 Jericho Turnpike
Jericho, New York 11753
Date of Inspection: October 15, 1996
Interest Appraised: Fee simple, subject to an overlease
Date of Value: January 1, 1997
Land Description
Area: +/-1.68 acres, or +/-73,180 square feet
Zoning: Zoning F - Neighborhood Business District
Assessor's Parcel Number: Section 17-Block 16-Lot 47
Improvements Description
Age: Constructed in 1967
Property Type: Limited-service
Guestrooms: 80
Number of Stories: Two stories
Food and Beverage Facilities: None
Meeting Space: One room, +/-800 square feet
Parking: 100 spaces (around the perimeter of the
building)
Summary of Value Parameters
Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Two
Stabilized Year: 1998
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HVS International, Mineola, New York Executive Summary 2
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 11%
Brokerage and Legal Fees: 3%
Holding Period: 10 years
Calculated Discount Rate: 14.38%
Estimates of Value
Income Capitalization Approach: $3,700,000
Sales Comparison Approach: $2,700,000 to $4,400,000
Cost Approach (Replacement Cost): $4,600,000
Market Value Conclusion: $3,800,000
Market Value Conclusion per Room: $47,500
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple (subject to an
overlease) interest in a +/-73,180-square-foot (+/-1.68-acre) parcel improved
with an 80-room, limited-service lodging facility known as the Howard Johnson
Westbury, which opened in 1967. In addition to guestrooms, the subject property
contains a lobby, an outdoor swimming pool, approximately 800 square feet of
meeting space, and all other facilities and amenities typical of a
limited-service hotel. The property is located off Exit 40W of the Long Island
Expressway, at the southwest corner of the intersection formed by the southern
service road of the Long Island Expressway and Jericho Turnpike. Municipal
jurisdictions governing the property include the Village of Jericho, the Town of
Oyster Bay, the County of Nassau, and the State of New York. Although the
subject property carries a Westbury name, it is actually located in Jericho. The
Westbury name is used in an attempt to capitalize on perceived marketing
benefits associated with this location. The hotel's civic address is 120 Jericho
Turnpike, Jericho, New York, 11753.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the central
Nassau County area for the purpose of estimating the market value of the subject
property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under
conditions whereby:
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HVS International, Mineola, New York Nature of the Assignment 4
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1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what
they consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with its proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation. Unless noted
otherwise, we have inspected the competitive lodging facilities and analyzed the
sales summarized in this report, and our value conclusion is based on this
investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility). It must
be noted that the subject property is encumbered with an overlease, where the
current owner of the fee simple interest also holds the sublease position of the
property; a separate entity holds the sandwich lease position. Details of this
lease, which is referred to as an overlease, are included as an addendum to this
report.
(1) Federal Register, Vol. 55, No. 165, August 24, 1990, p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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HVS International, Mineola, New York Nature of the Assignment 5
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(3) Hotels,
Motels and Restaurants: Valuations and Market Studies,(4) The Computerized
Income Approach to Hotel/Motel Market Studies and Valuations,(5) and Hotels and
Motels: A Guide to Market Analysis, Investment Analysis, and Valuations.(6)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented as an addendum to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
According to records maintained at the Nassau County Tax Assessor's office, the
subject property was previously owned from the mid-1980s by Northeast Hotel
Associates. On May 12, 1994, Westbury New York Hotel Limited Partnership (formed
by Ashford Financial Corporation) acquired the fee simple interest in the
subject property from Northeast Hotel Associates for a reported price of
$2,785,641. In addition to the fee simple ownership, Westbury New York Hotel
Limited Partnership also assumed the
(3) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(4) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(5) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(6) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 6
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sublease position of Northeast Hotel Associates with Jacob Goldfarb and Malka R.
Goldfarb. The sublease arrangement stipulates that Westbury New York Hotel
Limited Partnership must pay an annual sublease fee of $51,400, payable in
monthly installments, to Jacob Goldfarb and Malka R. Goldfarb through November
of 2014.
The subject property is operated under a franchise agreement with Howard
Johnson; this agreement expires on May 12, 2009. Additionally, the hotel is
subject to a management agreement with Remington Hotel Company; an abstract of
this contract is presented as an addendum to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Sean A. Hehir on October 15, 1996.
<PAGE>
HVS International, Mineola, New York Description of the Land, Improvements 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located off Exit 40W of the Long Island Expressway, at the
southwest corner of the intersection formed by the southern service road of the
Long Island Expressway and Jericho Turnpike. Municipal jurisdictions governing
the property include the Village of Jericho, the Town of Oyster Bay, the County
of Nassau, and the State of New York.
According to the subject property's 1995/96 real estate tax bill and
representatives of the Nassau County Tax Assessor's Office, the subject parcel
measures approximately 1.68 acres, or +/-73,180 square feet and is generally
triangular in shape. Jericho Turnpike extends in an east/west direction along
the subject property's southern border. The eastbound southern service road of
the Long Island Expressway extends in a southeast/northwest direction along the
property's northeast border. Parking facilities, a gas station, and an
International House of Pancakes (IHOP) restaurant are situated along the subject
property's western periphery. Primary vehicular access to the property is
provided by both the southern service road of the Long Island Expressway and
Jericho Turnpike.
Topographically, the subject parcel and the surrounding area slope downward
slightly from west to east, and the size and topography of the subject parcel
appear well suited for its current use. The site appears to be fully developed,
with no excess land for expansion.
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HVS International, Mineola, New York Description of the Land, Improvements 8
Zoning, Taxes, and Neighborhood
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Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purposes of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
that would affect its use or marketability.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is readily accessible to a variety of local, county, state, and interstate
highways. Long Island's highway system is highly developed, placing the subject
property within close driving distance of most western Suffolk County and Nassau
County destinations via the Long Island Expressway (I-495), Northern State
Parkway, Southern State Parkway, and Jericho Turnpike (State Route 25). Of these
roadways, the Long Island Expressway is the only one that extends almost the
entire length of the island. The following description of the area's major
roadways demonstrates that it is well serviced by a variety of vehicular routes.
The Long Island Expressway (I-495) is a major east/west interstate thoroughfare
that connects Long Island with New York City and beyond. This expressway is
paralleled by two-lane service roads on its northern and southern sides
throughout most of Queens and Nassau Counties; the service roads are only
partially constructed in Suffolk County. The availability of a service road in
the vicinity of the subject property affords the site improved access, and thus
represents a locational advantage.
Northern State Parkway is a six-lane, limited-access route. This highway
originates at Veterans Memorial Highway (State Route 454) in Suffolk County and
continues westward through western Suffolk County and Nassau County. Northern
State Parkway becomes the Grand Central Parkway at the Nassau/Queens border and
terminates at the Triborough Bridge, which provides access to Manhattan and
Interstate 95. From the subject property, motorists can reach the Northern State
Parkway via local thoroughfares, including Brush Hollow Road, which intersects
the parkway approximately one mile south of the hotel.
Southern State Parkway is a six-lane, limited-access highway that provides
east/west transportation along the southern shore of Long Island. The route
originates in East Islip and extends west to the Nassau/Queens border, where it
intersects the Cross Island Parkway (which provides access to the Long Island
Expressway and Grand Central Parkway) and the Belt Parkway (which provides
access to John F. Kennedy International Airport and
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HVS International, Mineola, New York Description of the Land, Improvements 9
Zoning, Taxes, and Neighborhood
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Brooklyn). Southern State Parkway intersects Meadowbrook Parkway approximately
five miles southwest of the subject property.
With the exception of the Cross Island Parkway in Queens County, the Meadowbrook
is the westernmost north/south parkway on Long Island, and links the major
east/west arteries. This route originates at Jones Beach State Park and
continues north to the Northern State Parkway. Access to the subject property
from the Meadowbrook Parkway can be accomplished via the Northern State Parkway,
and thence from Jericho Turnpike.
Jericho Turnpike (Route 25) is a major east/west New York State thoroughfare
improved with a variety of commercial uses. The subject property is located at
the juncture of the Long Island Expressway and Jericho Turnpike. Other roads
that converge at this juncture include Brush Hollow Road and Cantiague Rock
Road. Overall, regional access to the Howard Johnson Westbury is considered to
be very good.
Local Access and Visibility
Local access to the subject property is provided by both Jericho Turnpike and
the southern service road of the Long Island Expressway. Eastbound motorists
traveling on the Long Island Expressway use Exit 40W, follow the southern
service road for a short distance, and make a right turn into the subject
property. Westbound travelers also use Exit 40W, loop around the interchange,
and proceed directly onto Jericho Turnpike, making a right turn into the subject
property.
Access to the subject hotel from Jericho Turnpike is convenient. Westbound
travelers make a right turn at the subject property, shortly after passing under
the interchange of the Long Island Expressway. A turnpike divider prevents
direct access to the subject property for eastbound motorists; guests must
travel past the subject property and execute a U-turn, arriving at the hotel
from the other direction. However, the subject property is considered to have
good access, as a result of its frontage on two major roadways.
In the vicinity of the subject property, Brush Hollow Road intersects with
Jericho Turnpike just southeast of the site. At roughly the same location, Brush
Hollow Road and Jericho Turnpike intersect with Cantiague Rock Road. Brush
Hollow Road leads to the Westbury Music Fair, which is located approximately one
mile southwest of the subject property, and to the Northern State Parkway.
Cantiague Rock Road leads to Cantiague Park.
The subject property is not very visible from the Long Island Expressway; the
hotel's signage can only be seen once you are almost parallel with the
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subject property, thus making it too late to exit. Visibility of the subject
property from Jericho Turnpike, however, is excellent, as the property fronts
this roadway. The distinguishing and well-recognized orange trademark of Howard
Johnson captures the attention of motorists passing the hotel.
Although visibility of the subject property from the Long Island Expressway is
limited, this is not considered to be a serious detriment. Like most hotels on
Long Island, the Howard Johnson Westbury does not attract a substantial amount
of demand from passing motorists. All destinations on Long Island can be reached
within one or two hours, and thus highway traffic does not produce a significant
number of hotel guests. Overall, the subject site is appropriate for hotel use
in terms of capacity, configuration, access, and visibility.
Airport Access
The subject property is within easy access of the three major airports on Long
Island: John F. Kennedy International, La Guardia, and MacArthur. John F.
Kennedy International Airport is approximately 20 miles southwest of the subject
site and can be accessed from the subject property by traveling west on the Long
Island Expressway, and then south on the Belt Parkway. La Guardia is roughly 20
miles northwest of the subject site and is accessible by traveling west on the
Long Island Expressway, and then north on the Grand Central Parkway. Long
Island's MacArthur Airport is located approximately 20 miles east of the subject
property and is accessible by traveling east on the Long Island Expressway, and
then southeast on Route 16.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-1 Available Utilities
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Utility Provider
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Water Jericho Water District
Electricity LILCO
Telephone NYNEX
Sewer Nassau County Sewer District
Garbage and Trash Jamaica Ash
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Soil and Subsoil Conditions
According to the Preliminary Environmental Site Assessment and Limited Asbestos
Survey prepared by Certified Engineering & Testing Company, Inc., dated November
24, 1993, four leaking underground storage tank (LUST) sites with "clean-up in
progress/required" status are located within one-half mile to the northeast of
the subject property. In addition, these sites are hydraulically upgradient from
the subject site. Additionally, a 550-gallon No. 2 fuel oil underground storage
tank (UST), which was installed in 1978 during the construction of the east wing
building, was identified on the subject site. The construction of the UST is
unknown, and the tank has no spill/overfill prevention, thus representing a
potential environmental concern for the subject site. The appraisers are not
qualified to evaluate soil conditions other than by a visual inspection of the
surface. Based on the findings of this environmental study, we urge concerned
individuals to seek further assistance from qualified engineers. For the purpose
of this report, we expressly do not consider the negative effect such findings
may have on the subject property. It must be noted, however, that any
environmental containment of the subject property could have an unfavorable
impact on the hotel's market value, and the estimate set forth in this appraisal
reflects our value conclusions prior to the deduction of any such costs.
Nuisances and Hazards
According to the same environmental assessment report cited above, the
non-friable asbestos-containing vinyl floor tiles of the east wing first floor
corridor, with an approximate total area of 250 square feet, contain asbestos.
Because the appraisers are not experts in this field, we urge the reader to
obtain an independent analysis to further investigate this possible
environmental concern. As noted previously, any environmental containment could
have an unfavorable impact on the subject property's market value, and the
estimate set forth in this appraisal report reflects our value conclusions prior
to the deduction of any such cost.
Flood Zone
As indicated by the Federal Emergency Management Agency (FEMA) Community Panel
Number 360483D, dated June 19, 1992, the subject property is located in Flood
Zone C, an area of minimal flooding.
Seismicity
At the time of writing this report, information on the seismicity of the subject
property was not available; for the purposes of this report, we have assumed
that the subject property is not located in an area of seismic danger.
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Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented as an addendum to this
report.
Conclusion
The subject parcel appears well suited as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The subject site features frontage on two major commercial thoroughfares.
o The surrounding neighborhood is characterized by a concentration of
potential demand generators.
o Regional access is favorable.
o Direct local access is provided by Jericho Turnpike and the Long Island
Expressway.
o All necessary utilities are available.
Disadvantages
o Preliminary environmental study reports potential environmental
containments that may adversely affect the market value of the subject
property.
o The site is not easily visible from the Long Island Expressway.
The disadvantage of limited visibility is surmountable, and the advantages
represent desirable locational attributes. Therefore, we believe that the
subject parcel is well suited for hotel use. The impact of the potential
environmental contamination may warrant further consideration but does not
presently detract from the site's utility as a lodging facility.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the
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improvements is based on our inspection of the hotel and information provided by
Ashford Financial Corporation.
The Howard Johnson Westbury is a limited-service lodging facility containing 80
rentable units, +/-800 square feet of meeting space, an outdoor swimming pool,
and appropriate back-of-the-house facilities. The two-story property opened in
1967 and is roughly 29 years old as of the date of this appraisal. In May of
1994, the hotel was acquired by Westbury New York Hotel Limited Partnership, an
entity formed by Ashford Financial Corporation. At the time of this transaction,
the hotel was in extremely poor condition. Subsequent to the acquisition, the
subject property was extensively renovated, at an estimated cost of $340,487 in
1994 and $22,690 in 1995. In scope, this renovation included the exterior of the
building, public areas, and guestrooms. Management representatives report that
all building systems are in good working order. The hotel is operated under a
license agreement with Howard Johnson and reportedly meets the standards for
lodging facilities of that brand.
Based on our inspection and information provided by Ashford Financial
Corporation, the following table summarizes the facilities available at the
subject property.
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Table 3-2 Facilities Summary
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Guestrooms
King Beds 6 Units
Queens 42
Double Queens 32
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Total 80 Units
Meeting and Banquet Rooms
800 Square Feet
----
Total 800 Square Feet
Recreational and Other Amenities
Outdoor swimming pool
Parking Spaces
100 surface spaces
Elevators
N/A
Life Safety Systems
Hard wired smoke detectors with battery back-up
and fire detectors
Not sprinklered
Laundry
2 Washers
3 Dryers
Construction Details
Concrete masonry blocks
Rubber membrane roof
Interior guestroom corridors
Carpeting in the guestrooms and corridors
Tile floor covering in guest bathrooms
Vinyl covering on the interior walls
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Property Exterior
The hotel structure is situated in the southern portion of the site. Paved
parking areas accommodating approximately 100 vehicles are located around the
perimeter of the building.
Vehicular access to the subject property is provided by both Jericho Turnpike
and the southern service road of the Long Island Expressway. Eastbound motorists
traveling on the Long Island Expressway use Exit 40W,
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follow the southern service road for a short distance, and make a right turn
into the subject property. Westbound travelers also use Exit 40W, loop around
the interchange, and proceed directly onto Jericho Turnpike, making a right turn
into the subject property.
Access to the subject hotel from Jericho Turnpike is convenient. Westbound
travelers make a right turn at the subject property, shortly after passing under
the interchange of the Long Island Expressway. A turnpike divider prevents
direct access to the subject property for eastbound motorists; guests must
travel past the subject property and execute a U-turn, arriving at the hotel
from the other direction. However, the subject property is considered to have
good access, as a result of its frontage on two major roadways.
After entering the site, guests proceed to the hotel's main entrance, which is
housed in a traditional Howard Johnson-style gatehouse located in the
southeastern portion of the site, immediately in front of the main entrance to
the property. Both the exterior of the subject property and the pavement appear
to be in good condition, with no apparent signs of disrepair.
Construction and Design
The subject property comprises two buildings connected by an enclosed corridor.
In terms of layout, the property consists of a U-shaped structure with an
outdoor swimming pool in the center. The west wing was originally constructed in
1967 and contains 58 guestrooms, while the east wing, which was added in 1978,
houses 22 rentable guestrooms. Reportedly, in August of 1986, a natural gas
explosion caused extensive damage at the subject property.
Until early 1987, approximately 60 guestrooms were reportedly out of order.
Lobby
The subject property's front desk, lobby, and manager's office are housed in the
brick-and-glass, orange-roofed gatehouse situated in the southeastern portion of
the site. A renovation is planned for the gatehouse in November of 1996;
approximately $38,000 will be spent modernizing the building's roof.
Meeting and Banquet Space
The subject property's meeting room is located in the west guestroom wing and is
approximately 800 square feet in size. No major renovations have taken place in
this room, nor are any planned for the immediate future. At the time of our
inspection, the meeting room appeared to be in good condition, showing no signs
of disrepair.
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Guestrooms
Of the 58 guestrooms in the west wing, 33 are furnished with two queen-size
beds, 24 contain one queen-size bed, and one is handicap accessible with one
queen-size bed. The rooms facing the pool area to the east are slightly larger
than those on the opposite side of the guestroom building. All west-facing rooms
in the west wing are reportedly furnished with two queen-size beds.
Guestrooms in the east building are furnished with a Thermosol whirlpool. In
addition, these rooms are equipped with a coffee maker. Sixteen guestrooms are
furnished with queen-size beds, while the remaining six rooms feature king-size
beds. The guestrooms in this wing are reportedly all the same size.
All of the guestroom televisions are older models that operate with channel
switch knobs. TV remote controls are currently available in all rooms to prevent
inconvenience for guests. However, these units are being replaced in the near
future. The subject property's guestrooms are of a typical layout and
configuration; in addition to beds, the guestrooms contain bedside tables,
lamps, two chairs, a writing desk, a dresser, draperies with black-out lining
and sheers, and a color television. Most of the bathrooms are finished with
ceramic tile floors, while the remaining units have linoleum tile.
Each guestroom reportedly contains a hard-wired smoke detector with battery
back-up. Because of the low-rise concrete construction of the building, the
structure is not sprinklered. Pull stations and fire extinguishers are located
at various points throughout the property.
At the time of our inspection, the subject property's guestrooms appeared to be
in a good and well-maintained condition.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with relatively new carpet,
which was replaced in the 1994/95 renovation. Corridor lighting is sufficient
and appears to be in good condition, and the lighting style appears appropriate
to the hallway's finishes. Vending and ice machines are also provided for guests
of the hotel.
Recreational Amenities
An outdoor swimming pool is located in the center of the U-shaped courtyard.
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Back-of-the-House Space
The subject property features an in-house laundry facility, which includes two
washing machines and three dryers. We were informed by management that the hotel
is in need of a third washing machine to adequately handle the laundry load.
Although the washing machines and dryers appear dated, they are reported to be
in good working condition.
Vertical Transportation
Vertical transportation is provided by three stairwells. One is positioned in
the western wing of the building, while the remaining two stairwells are located
in the eastern wing. All three stairwells appear to be well maintained.
Heating, Ventilation, and Air Conditioning
Guestrooms at the subject property are cooled by in-room, through-the-wall
cooling units that reportedly are in working order. Public areas are cooled by
individual air-conditioning units; hence, the subject property does not require
chillers. Electricity is used to heat the property.
Based on information provided by Ashford Financial Corporation, all of the
subject property's HVAC operating systems are adequate to maintain the operation
of the hotel.
Fire Protection
The subject property is reportedly fully compliant with all fire standards. All
of the hotel's guestrooms and public areas are fully sprinklered, and guestrooms
feature heat detectors, and hard-wired smoke alarms with battery back-up. The
property's fire alarm is wired to a central dispatch station.
The subject property employs a security guard to be on site during the evening
hours, from 10 p.m. to 6 a.m. Doors feature a TESA electronic locking system,
which contributes to the security of the hotel. Given the subject property's
location proximate to Jericho Turnpike and the Long Island Expressway, the
property is at times a target of crime given the relatively easy escape route.
However, according to management, crime is not a significant issue at the
subject property, and the on-staff guard is reportedly sufficient to deter
enough criminal activity so that this issue does not effect the competitive
level of the subject property.
Asbestos
According to the same environmental assessment report cited previously in this
report, the non-friable asbestos-containing vinyl floor tiles in the east wing
first floor corridor, with an approximate total area of 250 square feet, contain
asbestos. Because the appraisers are not experts in this field, we urge the
reader to obtain an independent analysis to further investigate this possible
environmental concern. As noted previously, any environmental containment could
have an unfavorable impact on the subject property's
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market value, and the estimate set forth in this appraisal report reflects our
value conclusions prior to the deduction of any such costs.
ADA Conformance
Following the January 26, 1992, passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
For the purposes of this appraisal, we have assumed that the subject property
will be maintained in its present condition throughout the assumed ten-year
holding period. Specifically, it is assumed that hotel management will employ
standard preventive maintenance measures, and that a reserve for replacement
fund will be established to fund the cost of any future necessary capital
expenditures.
ZONING
According to the Nassau County zoning regulations and map (dated October, 1993),
the subject property is zoned as follows.
Zoning F - Neighborhood Business District
Section 462C of the zoning ordinance states that under a Zoning F - Neighborhood
Business District zone, hotels, inns, motels, tourist cabins, lodging
facilities, and boarding houses are permitted when approved by the town board as
a special exception after a public hearing. Based on this information, the
subject property appears to conform to local zoning regulations. We assume that
all necessary permits and approvals have been secured (including an appropriate
liquor license), and that the subject property was constructed in accordance
with local zoning ordinances, building codes, and all other applicable
regulations. Our zoning analysis should be verified before any physical changes
are made to the hotel.
ASSESSED VALUE AND TAXES
Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments, and properties with higher
and lower values will have proportionately larger and
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smaller assessments. Depending on the taxing policy of the municipality,
property taxes can be based on the value of the real property or the value of
the personal property and the real property.
The Howard Johnson Westbury is subject to real estate taxes only; these are
payable to the Town of Oyster Bay and the Jericho School District. Property
taxes on Long Island are extremely high, which increases the operating expenses
of hotels located in this area. Both of the subject property's taxing
jurisdictions base tax amounts on the assessment set by Nassau County; this
assessment reportedly equals 8% of the property's 1986 market value.
The total assessment of the subject property for 1995/96 equates to $183,900. Of
this amount, $79,270 is attributed to the land and $104,630 to the improvements.
The subject hotel's property assessment has not changed over the past five
years. Town taxes are payable in January and June, and school taxes (which are
based on a fiscal year) are payable in October and March. Based on the current
assessment and the tax rates of $39.017 per $100 assessed value in the Jericho
School District and $30.617 per $100 assessed value in the Town of Oyster Bay,
the subject property's 1995/96 tax burden is calculated at approximately
$128,057. The combined tax rates of the school district and the town increased
at an average annual compounded rate of 4.4% between 1990 and 1995. Our
projections assume a 4.0% annual increase in the subject property's overall tax
burden.
The tax rates applicable to the subject property are presented in the following
table.
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Table 3-3 Tax Rates Applicable to the Subject Property
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Tax Rate per $100
Jurisdiction of Assessment
-----------------------------------------
Jericho School District $39.02
General Taxes 30.62
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Total $69.63
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Applying the projected increases to the 1995/96 tax burden yields the following
forecast of property taxes for the subject property.
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Table 3-4 Forecast of Property Tax Expense
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1997 Stabilized
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Forecast Property Taxes (+000) $137 $144
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood surrounding the Howard Johnson Westbury is characterized by a
mixture of commercial, retail, residential, and office developments. The subject
property is located along a commercial-strip portion of Jericho Turnpike (Route
25), a major Long Island east/west artery. Neighboring improvements along
Jericho Turnpike include an IHOP restaurant, an Exxon gas station, a Wendy's
fast-food restaurant, a Staples store, a Home Depot, low-rise office buildings,
and the Edgewater Motel. Brush Hollow Road and Cantiague Rock Road intersect
with Jericho Turnpike in the immediate vicinity of the subject property;
developments along these two roadways include Getty Storage, High Fives, ACME
Bus Corp., the College House, Inc., John Hassell, Inc., EAB Bank, and Westbury
Music Fair. Residential developments are located northeast and southwest of the
subject property. Jericho Quad/Chemical Bank and Jericho Plaza, two large office
complexes, are located northeast of the subject property.
Cantiague Park, located approximately one mile southeast of the subject
property, offers a nine-hole golf course, tennis courts, and various other
recreational facilities. Southwest of the hotel, along Old Country Road, is a
large concentration of retail stores and shopping centers. The Roosevelt Field
Shopping Center, which is the largest shopping mall on Long Island and one of
the largest malls in the nation, has frontage along this roadway. Some of the
other retail developments in this corridor, which has seen considerable retail
expansion in the last three years, include Fortunoff's, K-Mart, Tops Appliance
City, Price Club, and various free-standing restaurants.
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Conclusion
Overall, the neighborhood surrounding the Howard Johnson Westbury appears well
suited for the operation of a lodging facility. A base level of lodging demand
for the subject property is provided by the Jericho Plaza office complex and a
number of service and manufacturing companies situated nearby. The hotel's
proximity to Cantiague Park and the retail stores along Old Country Road
provides guests with leisure and shopping alternatives. In general, the subject
property's frontage and convenient access from Jericho Turnpike and the Long
Island Expressway increase its desirability for hotel use, and its favorable
location and the character of the surrounding neighborhood also make the site
appropriate for hotel operation.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property is located on Long Island, in the southeastern portion of
New York State. The hotel is situated in the Village of Jericho, in the Town of
Oyster Bay, and its primary market consists of Nassau County and the
Nassau-Suffolk, New York Metropolitan Statistical Area (MSA).
Long Island is approximately 118 miles long and 25 miles across at its widest
point; at roughly 1,396 square miles of land area, it is the largest island
adjoining the continental United States. The island is bounded by the Atlantic
Ocean to the south and east, Long Island Sound to the north, and the East River
and Upper New York Bay to the west. The area developed from a sparsely populated
agricultural region in the 18th century to a major suburban metropolitan center.
The character of Long Island changes markedly from urban to suburban to rural
over its length. The Queens and Brooklyn boroughs of New York City occupy the
western end of the island; Nassau and Suffolk Counties comprise the middle and
eastern portions. In the popular sense, Long Island refers only to Nassau and
Suffolk Counties, which occupy roughly 929 square miles and contain 67% of the
island's total land mass.
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AREA MAP
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The proximity of Nassau and Suffolk Counties to New York City has been the
primary factor in the development of Long Island. New York City, which consists
of five boroughs, is the most densely populated city in the United States and
serves as a global center for trade, commerce, and industry. New York and its
surrounding suburbs are the central hub of a megalopolis that extends along the
eastern seaboard from Boston, Massachusetts, to Philadelphia, Baltimore, and
Washington, DC.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods & Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
Population
Between 1980 and 1995, Nassau County registered an average annual compounded
decline in population of 0.1%, as compared to the MSA, the state, and the nation
as a whole, which registered positive growth rates of 0.1%, 0.2%, and 1.0%,
respectively. The population decline in Nassau County can be attributed to the
area's relatively more expensive housing costs when compared to the other
statistical areas. Between 1990 and 1995, as well as between 1995 and 2000,
similar trends were registered or are forecasted. Nassau County is anticipated
to experience a 0.2% decline in population between 1995 and 2000, while the
state and the nation are projected to expand at average annual rates of 0.1%,
and 0.9%, respectively.
Although there is no direct relationship between population and hotel demand, we
find that the rate of population growth generally establishes a minimum rate of
increase for an area's commercial segment lodging demand. This observation also
holds true for the meeting and group segment if a majority of the meetings are
business oriented.
Retail Sales
Trends in retail sales reflect both changes in population and the propensity of
area inhabitants and visitors to spend money on retail goods. Like population
trends, retail sales have no direct correlation with hotel room night
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demand, but they do tend to gauge the economic health and vitality of the
market. Between 1980 and 1995, retail sales in Nassau County increased at an
average annual compounded rate of 1.3%, which was higher than the state at 1.1%,
and below the levels achieved by the MSA at 1.6% and the nation at 1.9%. Nassau
County and the MSA each experienced growth in retail sales between 1990 and 1995
of 1.3%, compounded annually, while the state and the nation as a whole
registered gains of 1.2% and 2.5%, respectively.
Retail sales in Nassau County are anticipated to contract at an annual average
compounded rate of 0.2% between 1995 and 2000. During the same period, the MSA
is anticipated to show no increase, while the state and the nation are expected
to register increases of 0.1%, and 0.9%, respectively. According to these
projections, no expansion in retail sales activity is anticipated for the Nassau
County region over the next five years. As stated earlier, retail sales have no
direct correlation with hotel room night demand; however, they do represent
economic activity in the market.
Personal Income
Personal income is similar to disposable income, and is defined as gross income
available after taxes for the purchase of goods and services (i.e., available
spending money). Personal income gauges the economic health of the local
population and reflects market quality and the general ability to buy.
Personal income in Nassau County, between 1980 and 1995, increased at an average
annual compounded rate of 1.6%. However, these levels are lower than those
attained by the MSA, the state, and the nation, which registered annual growth
of 1.9%, 1.9%, and 2.3%, respectively, during this period. Between 1990 and
1995, the region and the nation underwent a period of economic downturn, and
personal income growth rates slowed accordingly, with Nassau County recording a
0.4% annual decline. However, the MSA, the state, and the nation, registered
positive growth during this short-term historical period of 0.1%, 0.5%, and
1.9%, respectively, per year. Projections for the period between 1995 and 2000
indicate a recovery of the economy. Personal income in Nassau County is expected
to grow by 1.3% annually, while the MSA, the state, and the nation are
anticipated to increase by 1.7%, 1.3%, and 2.3%, respectively.
Per capita personal income levels in both Nassau County and the Nassau-Suffolk,
NY MSA are considerably higher than levels for the nation. This relationship
suggests that Long Island residents have more money available to spend on retail
goods and services than do typical Americans. This
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increased spending ability contributes to a favorable environment for local
commercial establishments, and restaurants in particular. It should be noted,
however, that personal income does not take into account cost-of-living factors;
as a result, it is possible for local residents to have higher income levels
without enjoying greater affluence if the cost of necessities is greater than it
is in other parts of the nation.
Work Force Characteristics
The most rapid long-term historical growth in both the county and the MSA
between 1980 and 1995 occurred in the services and FIRE (finance, insurance, and
real estate) sectors. However, between 1990 and 1995, most of the sectors in the
county and the MSA experienced declines, with the exception of the services
sector, which expanded by 1.1% per year. The greatest drops were apparent in the
mining, construction, manufacturing, and federal government sectors; more
limited defense spending on a national level and the region's historical
reliance on defense contracts are largely responsible for the downward trends in
manufacturing and federal government employment on Long Island. Overall
employment declined by 0.9%, compounded annually, in Nassau County during this
recessionary period.
Between 1995 and 2000, overall employment levels are expected to remain
unchanged. The lack of change in projected employment reflects stabilization of
the local economy following the expansion in the 1980s and the recession that
characterized the early 1990s.
A favorable characteristic is the diversification of the Long Island economy.
Services, trade, and government are the largest employment sectors in both the
county and the MSA. Nassau County's FIRE sector is proportionately larger than
that of the MSA, which reflects the county's predominately white-collar
orientation. Suffolk County exhibits more dependence on manufacturing,
particularly in high-technology fields.
The major employers on Long Island represent a cross-section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in research and
development. Although this diversification may not maximize the area's lodging
demand, it does tend to stabilize the local economy during its various cycles.
The following table presents some of the major employers on Long Island.
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Table 4-1 Major Employers
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Number of
Firm Product Employees
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Diocese of Rockville Center Religious Institution 12,500
North Shore Health System Medical Care 11,002
Waldbaum's Supermarket 6,500
Long Island Rail Road Transportation 6,068
Long Island Lighting Company Electricity/Gas 5,947
Long Island Jewish Medical Center Medical Care 5,880
Northrop Grumman Aerospace Manufacturers 5,000
Chemical Banking Financial Institution 4,500
King Kullen Supermarket 4,500
NYNEX Communications 4,500
Pathmark Supermarket 4,500
Chase Manhattan Financial Institution 4,000
Macy's East Merchandising 4,000
Newsday Daily Newspaper 4,000
Winthrop University Hospital Medical Care 3,350
Brookhaven National Lab Research and Development 3,200
United Parcel Service Delivery Service 3,200
Source: Long Island Almanac 1996
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As illustrated by the preceding table, Northrop Grumman, a major defense
contractor, is currently the area's seventh-largest employer. In the late 1980s
and early 1990s, Grumman was the largest firm on Long Island, employing more
than 19,000 people. Cutbacks have occurred since that time as a result of both
the end of the cold war and pressures to reduce the federal deficit. It is
difficult to quantify the number of jobs lost at the small supply and
distribution companies that relied on Grumman for a majority of their business.
In early March, 1994, the Martin Marietta Corporation of Bethesda, Maryland,
announced that it would purchase Grumman for approximately $55 per share of
stock. Within the week, Northrop, based in Los Angeles, indicated that it would
beat Martin Marietta's offer and would pay approximately $60 per share. Grumman
did not solicit a takeover bid from Northrop, preferring instead to be bought by
Martin Marietta. However, Martin Marietta would not raise its offer of $55 a
share. Northrop eventually raised its final offer to $62. Grumman was officially
acquired by Northrop Corporation on April 15, 1994. Reports indicate that the
existing Grumman facilities will remain on Long Island, and current employment
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levels are believed to be stable. However, future changes in defense spending
could affect this employment sector.
Office Space
One of the economic indicators that best reflect lodging demand is the trend in
occupied office space. Firms that occupy office space generally exhibit a strong
propensity to attract commercial visitation. Although it is difficult to
quantify commercial hotel demand based on the amount of occupied office space,
trends that cause an increase or decrease in the amount of occupied space may
have a proportional impact on commercial lodging demand, and a less direct
effect on meeting demand.
Cushman and Wakefield subdivides office space in Nassau County into the western,
central, and eastern districts. The subject property is located in eastern
Nassau County, which includes the municipalities of Jericho, Eastern Westbury,
Woodbury, Syosset, and Plainview. Of the three office space districts in Nassau
County, the western area maintained the lowest level of year-end 1995 inventory,
at 4,540,276 square feet. The overall Nassau County inventory was reported at
18,139,248 square feet at the end of 1995, and the Long Island total was
26,039,938 square feet. The office vacancy rate for Long Island was 15.9% at
year-end 1995.
According to Cushman and Wakefield, Nassau County has undergone no new office
space construction since 1992, and its 1995 vacancy rate of 15.8% was the second
lowest since 1992. The eastern Nassau district registered the highest office
vacancy percentage in the county, at 18.8%.
Highway Traffic
The subject property occupies a prominent location adjacent to the Long Island
Expressway and Jericho Turnpike. The amount of traffic passing through a market
area can have a direct impact on commercial and leisure demand and an indirect
effect on meeting demand. According to a 1991 Traffic Volume Flow Map for Nassau
County depicting average annual daily traffic, traffic counts for Jericho
Turnpike, near the site of the subject property totaled 37,400, and traffic
counts near Exit 40W on the Long Island Expressway totaled 128,200. Because this
data is relatively outdated, minimum weight has been given to highway traffic
statistics in analyzing the economic trends of the subject property's market
area.
Airport Traffic
Airport passenger counts are important indicators of lodging demand. Depending
on the type and location of a particular airfield, a sizable percentage of
arriving passenger may have need for hotel and motel
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accommodations. Trends showing changes in passenger counts also reflect local
business activity and the overall economic health of an area.
The two major airports in the New York area are John F. Kennedy International
Airport and LaGuardia Airport; smaller facilities on Long Island include
MacArthur Airport and Republic Field, which have minimal effect on the subject
property. Between 1968 and 1994, passenger enplanements at Kennedy and LaGuardia
Airports declined at average annual compounded rates of 1.5% and 2.7%,
respectively. From 1993 to 1994, Kennedy registered a strong 7.5% increase, and
LaGuardia achieved a 4.7% gain. Because airport traffic often exhibits a high
degree of correlation with lodging demand, these trends hold particular
significance.
Leisure Travel
Although beaches and other attractions are available in the subject property's
area, leisure travel does not contribute a large percentage of local hotel
demand. Most leisure travel to Long Island consists of day trips rather than
overnight stays. Most of the areas that do attract leisure-oriented lodging
demand are situated on the eastern tip of the island, on the North and South
Forks. Some tourist attractions on Long Island include the Animal Farm, which
offers a petting farm and pony rides; the Brookhaven National Laboratory, an
exhibit center and science museum; the Cold Spring Harbor Fish Hatchery; the
Fire Island Lighthouse; the Hamptons, a seaside resort community; Hargrave
Vineyards, where tours and wine tastings are available; the children's zoo at
the Long Island Game Farm; Sagamore Hill, the former home of Theodore Roosevelt;
and the Shrine of Our Lady of the Island, a religious sanctuary. Numerous state
and county parks are located across the island, and many offer swimming and ice
skating. Golf is available at 113 private and public courses, bicycling trails
are available in numerous locations, and camping, boating, and fishing are
popular recreational activities. Small game hunting is permitted in season.
Retail Space
Although the subject property is located within the eastern Nassau district
categorized by Cushman & Wakefield's statistical research, it is relatively
close to the central Nassau district, which includes the municipalities of
Garden City, Mineola, Mitchell Field, and Carle Place, and the Roosevelt Field
area. Because of the proximity of the central Nassau district and the rich array
of retail development it offers, it is important to analyze this area's
attractions and activities, which provide guests of the subject property with an
array of shopping and dining alternatives.
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Built in 1956, Roosevelt Field Mall contains +/-2,200,000 gross leasable square
feet and is currently ranked the fourth-largest retail mall in the United States
by the International Council of Shopping Centers. In April of 1993, a 22-month,
$150-million renovation, which included the construction of a second story, the
addition of a 14-tenant, 850-seat food court, and a significant cosmetic
renovation, was completed and resulted in an increase in the number of stores
from 140 to 225. The mall is currently anchored by Macy's, JC Penney, Stern's,
and Bloomingdale's. An additional 400,000 square feet has been added to the
mall. Corporate Property Investors, owners of the mall, recently completed a
168,000-square-foot, second-story addition. This expansion houses 50 new stores,
which opened in October of 1996; among these 50 stores are FAO Schwartz, Polo,
and Pottery Barn. A 225,000-square-foot Nordstrom store, scheduled to open in
August of 1997, is under construction on the east side of the mall on land
Nordstrom has leased from Corporate Property Investors.
The expansion and renovation of the mall triggered a significant amount of new
retail development in the surrounding area. Fortunoff's, a leading specialty
housewares and jewelry retailer approximately one mile east of the mall, has
expanded the shopping area immediately surrounding its main store. The Price
Club Plaza, the first phase of Fortunoff's The Source, opened with a
+/-153,000-square-foot Price Club and a +/-250,000-square-foot complex
containing Marshall's, Sports Authority, and K-Mart. Additional retail spaces in
the area include the +/-30,000-square-foot Borders Books and Music outlet.
Several restaurants, including a California Pizza Kitchen, a Ruby Tuesdays, and
an Olive Garden, have opened in the past two years.
The second phase of Fortunoff's The Source is under construction, and according
to the developers of the project, Simon Properties Group, it will include a
+/-720,000-square-foot enclosed mall, of which +/-200,000 square feet is
allocated to the expansion of Fortunoff's, and the remaining space will be for
smaller retail stores. In addition to the mall structure, a three-story parking
garage designed to accommodate approximately 3,000 vehicles will be constructed.
Additional parking areas for approximately 1,000 vehicles will be available in
front of the mall. Anchor stores at The Source will include a 35,000-square-foot
Off 5th Saks Fifth Avenue Outlet and a 45,000-square-foot Nordstrom Rack outlet
store. Space has also been committed by Just for Feet for a 19,000-square-foot
shoe store and Virgin Megastore for a 25,000-square-foot record and video store,
as well as by Loehmann's, the Cheesecake Factory, Innovation, Cosmetics Plus,
47th St.
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Photo, Bertolini's, Rainforest Cafe, and Old Navy - the Gap's latest retail
concept. This retail project is scheduled to open during the summer of 1997 and
will encompass the existing 32-year-old, 212,000-square-foot Fortunoff's store.
Roosevelt Raceway, a 172-acre former horse-racing venue located in Westbury, was
closed several years ago. This area is currently being redeveloped into the
$500-million-plus, 2.6-million-square-foot Roosevelt Center
office/retail/housing complex by MCS Realty Corporation, which took title to the
raceway in November of 1994. The first phase of the Roosevelt Center project
entailed the construction of +/-525,000 square feet of retail space, including a
+/-185,000-square-foot Incredible Universe consumer electronic store, a
+/-127,000-square-foot Home Depot Expo Design Center, a Homeplace home
furnishing and appliance store, and a Modell's sporting goods store. Office
Depot, Babies "R" Us, a Creativity art supply center, three restaurants
(Chili's, Cozymel's, and the Macaroni Grill), and a ten-screen, 3,000-seat Sony
Theater have also opened on the site.
The Roosevelt Raceway flea market, which once accommodated up to 2,000 vendors,
was forced to close in December of 1995 to clear the way for housing and office
development.
Housing development incorporated in this project will involve the construction
of senior housing, townhouses, and multiple-dwelling living units. Residential
space at Roosevelt Center is expected to be fully developed by 1999, with total
residential absorption occurring within one year thereafter.
Current efforts are concentrated on commercial development. A total of five
buildings are planned in the office portion of the Roosevelt Center property,
which is zoned for approximately 900,000 square feet of office and exhibition
space, plus 110,000 square feet of hotel suites. According to one of the three
partners of the Roosevelt Center project, construction of a three-story,
150,000-square-foot office building should start by the end of 1996, and if
demand warrants it, construction of two additional buildings totaling more than
300,000 square feet would begin as well.
Development is also occurring within the +/-1,265.5-acre Mitchell Field area.
The county received ownership of the former airbase in 1963 with the stipulation
that it be developed for the public good. Hofstra University now occupies +/-157
acres in the southwest corner, and Nassau Community College
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is on +/-225 acres. Nassau Veterans Memorial Coliseum, interior roadways, and
parklands have together used up several hundred more acres. The remaining area
consists primarily of office and industrial space, which, to date, comprises
+/-4.2 million square feet.
Nassau Veterans Memorial Coliseum, one of the most prominent improvements in the
area, was constructed by Nassau County in 1972. This multi-purpose facility can
accommodate many different forms of activity. Up to 17,000 people can be
accommodated in the main arena, and the functional exhibition hall covers
+/-60,000 gross square feet; parking is available for more than 6,000 cars. The
coliseum is the home arena for the New York Islanders of the National Hockey
League. In addition, many sports events, shows, and concerts are held in the
arena every year, and carnivals, fairs, and outdoor exhibitions are hosted in
the facility's extensive parking area. It should be noted that there has been
some discussion of the privatization of the coliseum; although currently managed
by a professional third-party management company (Spectacor Management Group),
the coliseum is still owned by Nassau County. Options currently being discussed
include converting the coliseum into a 300- to 400-room hotel and incorporating
the coliseum area as part of Hofstra University's sports complex.
Plans are currently underway to construct senior housing within Mitchell Field;
the Meadows, a co-op with 438 two-bedroom apartments in 34 two-story buildings,
is to be built on a 20-acre tract in East Meadow. This project also has limited
commercial office space and will induce only a marginal amount of commercial and
meeting and group demand. The project will, however, help sustain leisure
demand.
In addition, the Nassau legislature has approved a scaled-down plan for a soccer
stadium and athletic park at Mitchell Field in preparation for the 1998 Goodwill
Games. Reportedly, the $22.6-million project will encompass a variety of
improvements, including an 8,000-seat soccer stadium and a 2,500-seat baseball
arena. Facilities for track and field competition will be incorporated into the
soccer stadium. The Goodwill Games, a quadrennial international competition,
will bring in $300 million to the county, and the soccer stadium could make the
county a legitimate contender for the Women's World Games, the Empire State
Games, and Women's World Cup Soccer. Such sporting events generate room nights
and help to sustain leisure demand.
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As evidenced by the projects summarized above, central Nassau County has become
a major retail hub. As a result of the recent recession and a decline in
high-paying defense and manufacturing jobs, much of the new retail development
has centered around discount stores that offer minimal services. However, the
renovation of Roosevelt Field in 1993 and 1996 and the addition of a number of
upscale specialty stores is an exception to this pattern. The surge in retail
development in central Nassau County and throughout Long island suggests an
anticipated rebound from the recent recession, and is a favorable indicator of
hotel demand growth.
Conclusion
Our review of various economic and demographic data indicates that the local
economy experienced strong growth during the early to mid-1980s, which moderated
in the latter part of the decade; as a result of the regional and national
recessions, declines were evident in the early 1990s. Projections indicate that
economic expansion is likely to resume. Although these trends suggest that local
lodging demand will not increase as dramatically as it did during the 1980s,
slight gains are anticipated.
The table on the following pages summarizes the economic and demographic trends
discussed throughout this section. All figures that reflect dollar amounts have
been adjusted for inflation, and thus reflect real change. It should be noted
that the percent changes indicated in the following tables are based on
unrounded figures, and thus may not calculate exactly.
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Nassau County 1980-1995 1,321.1 1,299.9 (0.1%)
Nassau-Suffolk, NY MSA 1980-1995 2,606.8 2,652.7 0.1
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 18,844.2 19,725.4 0.3
State of New York 1980-1995 17,566.4 18,195.7 0.2
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Nassau County 1990-1995 1,286.1 1,299.9 0.2
Nassau-Suffolk, NY MSA 1990-1995 2,608.7 2,652.7 0.3
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 19,470.4 19,725.4 0.3
State of New York 1990-1995 18,002.3 18,195.7 0.2
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Nassau County 1995-2000 1,299.9 1,287.1 (0.2)
Nassau-Suffolk, NY MSA 1995-2000 2,652.7 2,657.2 0.0
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 19,725.4 19,827.7 0.1
State of New York 1995-2000 18,195.7 18,314.7 0.1
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Nassau County 1980-1995 10,278.2 12,449.9 1.3
Nassau-Suffolk, NY MSA 1980-1995 17,537.0 22,328.1 1.6
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 105,476.9 127,771.9 1.3
State of New York 1980-1995 91,865.8 108,055.2 1.1
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Nassau County 1990-1995 11,699.8 12,449.9 1.3
Nassau-Suffolk, NY MSA 1990-1995 20,977.4 22,328.1 1.3
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 120,093.1 127,771.9 1.2
State of New York 1990-1995 101,720.0 108,055.2 1.2
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Nassau County 1995-2000 12,449.9 12,328.6 (0.2)
Nassau-Suffolk, NY MSA 1995-2000 22,328.1 22,334.3 0.0
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 127,771.9 128,377.0 0.1
State of New York 1995-2000 108,055.2 108,691.5 0.1
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Nassau County 1980-1995 7,780.2 9,577.7 1.4
Nassau-Suffolk, NY MSA 1980-1995 6,727.4 8,417.1 1.5
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 5,597.3 6,477.5 1.0
State of New York 1980-1995 5,229.6 5,938.5 0.9
United States 1980-1995 5,900.6 6,719.5 0.9
</TABLE>
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Retail Sales Per Capita
Nassau County 1990-1995 9,097.3 9,577.7 1.0%
Nassau-Suffolk, NY MSA 1990-1995 8,041.4 8,417.1 0.9
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 6,168.0 6,477.5 1.0
State of New York 1990-1995 5,650.4 5,938.5 1.0
United States 1990-1995 6,244.5 6,719.5 1.5
Projected Personal Retail Sales Per Capita
Nassau County 1995-2000 9,577.7 9,578.8 0.0
Nassau-Suffolk, NY MSA 1995-2000 8,417.1 8,405.2 (0.0)
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 6,477.5 6,474.6 (0.0)
State of New York 1995-2000 5,938.5 5,934.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales
(+000,000)
Nassau County 1980-1995 812.9 993.7 1.3
Nassau-Suffolk, NY MSA 1980-1995 1,362.0 1,821.9 2.0
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 10,199.7 13,183.6 1.7
State of New York 1980-1995 9,199.4 11,882.1 1.7
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales
(+000,000)
Nassau County 1990-1995 951.1 993.7 0.9
Nassau-Suffolk, NY MSA 1990-1995 1,676.7 1,821.9 1.7
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 12,105.4 13,183.6 1.7
State of New York 1990-1995 10,874.1 11,882.1 1.8
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Nassau County 1995-2000 993.7 998.3 0.1
Nassau-Suffolk, NY MSA 1995-2000 1,821.9 1,866.8 0.5
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 13,183.6 13,497.4 0.5
State of New York 1995-2000 11,882.1 12,228.3 0.6
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales
Per Capita
Nassau County 1980-1995 615.3 764.4 1.5
Nassau-Suffolk, NY MSA 1980-1995 522.5 686.8 1.8
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 541.3 668.4 1.4
State of New York 1980-1995 523.7 653.0 1.5
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales
Per Capita
Nassau County 1990-1995 739.5 764.4 0.7
Nassau-Suffolk, NY MSA 1990-1995 642.7 686.8 1.3
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 621.7 668.4 1.5
State of New York 1990-1995 604.0 653.0 1.6
United States 1990-1995 646.3 704.1 1.7
</TABLE>
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Eating and Drinking Place Sales Per Capita
Nassau County 1995-2000 764.4 775.6 0.3%
Nassau-Suffolk, NY MSA 1995-2000 686.8 702.6 0.5
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 668.4 680.7 0.4
State of New York 1995-2000 653.0 667.7 0.4
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Nassau County 1980-1995 26,854.4 34,236.3 1.6
Nassau-Suffolk, NY MSA 1980-1995 46,050.4 61,056.6 1.9
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 316,226.9 439,766.7 2.2
State of New York 1980-1995 268,310.1 358,297.4 1.9
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
Short-Term Historical Personal Income (+000,000)
Nassau County 1990-1995 34,957.9 34,236.3 (0.4)
Nassau-Suffolk, NY MSA 1990-1995 60,694.9 61,056.6 0.1
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 427,531.9 439,766.7 0.6
State of New York 1990-1995 349,724.3 358,297.4 0.5
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Nassau County 1995-2000 34,236.3 36,523.8 1.3
Nassau-Suffolk, NY MSA 1995-2000 61,056.6 66,527.7 1.7
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 439,766.7 472,116.9 1.4
State of New York 1995-2000 358,297.4 382,633.9 1.3
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Nassau County 1980-1995 20,328.0 26,338.0 1.7
Nassau-Suffolk, NY MSA 1980-1995 17,666.0 23,017.0 1.8
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1980-1995 16,781.0 22,294.0 1.9
State of New York 1980-1995 15,274.0 19,691.0 1.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Nassau County 1990-1995 27,182.0 26,338.0 (0.6)
Nassau-Suffolk, NY MSA 1990-1995 23,267.0 23,017.0 (0.2)
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1990-1995 21,958.0 22,294.0 0.3
State of New York 1990-1995 19,427.0 19,691.0 0.3
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Nassau County 1995-2000 26,338.0 28,377.0 1.5
Nassau-Suffolk, NY MSA 1995-2000 23,017.0 25,037.0 1.7
New York-North New Jersey-Long Island, NY-NJ-CT-PA CMSA 1995-2000 22,294.0 23,811.0 1.3
State of New York 1995-2000 19,691.0 20,892.0 1.2
United States 1995-2000 16,908.0 18,097.0 1.4
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 36
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Employment - Nassau County (+000)
Farm 1980-1995 0.2 0.1 (2.7)%
Agriculture Services, Other 1980-1995 6.1 4.8 (1.6)
Mining 1980-1995 1.1 0.4 (7.1)
Construction 1980-1995 26.2 26.2 0.0
Manufacturing 1980-1995 90.2 50.6 (3.8)
Trans., Comm. & Public Utils. 1980-1995 26.8 29.4 0.6
Total Trade 1980-1995 174.3 166.7 (0.3)
Wholesale Trade 1980-1995 54.0 45.3 (1.2)
Retail Trade 1980-1995 120.2 121.4 0.1
Finance, Insurance, & Real Estate 1980-1995 69.3 84.7 1.4
Services 1980-1995 190.2 270.5 2.4
Total Government 1980-1995 80.7 79.5 (0.1)
Federal Civilian Govt. 1980-1995 6.9 8.8 1.7
Federal Military Govt. 1980-1995 4.1 3.7 (0.6)
State & Local Govt. 1980-1995 69.8 67.0 (0.3)
TOTAL 1980-1995 665.1 712.8 0.5
Short-Term Historical Employment - Nassau County (+000)
Farm 1990-1995 0.1 0.1 0.0
Agriculture Services, Other 1990-1995 4.6 4.8 0.8
Mining 1990-1995 0.5 0.4 (7.6)
Construction 1990-1995 31.6 26.2 (3.6)
Manufacturing 1990-1995 67.0 50.6 (5.5)
Trans., Comm. & Public Utils. 1990-1995 31.8 29.4 (1.6)
Total Trade 1990-1995 176.0 166.7 (1.1)
Wholesale Trade 1990-1995 51.3 45.3 (2.5)
Retail Trade 1990-1995 124.7 121.4 (0.5)
Finance, Insurance, & Real Estate 1990-1995 93.2 84.7 (1.9)
Services 1990-1995 255.5 270.5 1.1
Total Government 1990-1995 85.9 79.5 (1.5)
Federal Civilian Govt. 1990-1995 10.3 8.8 (3.1)
Federal Military Govt. 1990-1995 4.2 3.7 (2.5)
State & Local Govt. 1990-1995 71.4 67.0 (1.3)
TOTAL 1990-1995 746.2 712.8 (0.9)
</TABLE>
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Table 4-2 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Employment - Nassau County (+000)
Farm 1995-2000 0.1 0.1 (0.8)%
Agriculture Services, Other 1995-2000 4.8 4.2 (2.5)
Mining 1995-2000 0.4 0.4 0.4
Construction 1995-2000 26.2 26.3 0.0
Manufacturing 1995-2000 50.6 45.5 (2.1)
Trans., Comm. & Public Utils. 1995-2000 29.4 29.7 0.2
Total Trade 1995-2000 166.7 159.8 (0.8)
Wholesale Trade 1995-2000 45.3 45.0 (0.1)
Retail Trade 1995-2000 121.4 114.8 (1.1)
Finance, Insurance, & Real Estate 1995-2000 84.7 87.9 0.7
Services 1995-2000 270.5 278.4 0.6
Total Government 1995-2000 79.5 79.6 0.0
Federal Civilian Govt. 1995-2000 8.8 8.6 (0.4)
Federal Military Govt. 1995-2000 3.7 3.7 0.2
State & Local Govt. 1995-2000 67.0 67.2 0.1
TOTAL 1995-2000 712.8 711.8 (0.0)
</TABLE>
Source: Woods & Poole Economics, Inc.
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The Lodging Market Supply and Demand Analysis section of this economic study and
appraisal will relate these historical and projected growth trends to specific
market segments based on their propensity to reflect visitation. This analysis
will provide a basis for forecasting changes in room night demand in the subject
property's area.
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5. Overview of External Forces Affecting the
U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
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Year 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
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Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- --------------------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
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Source: Smith Travel Research & HVS International
* Projected
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This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates
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that during periods of prosperity, room rates are a good hedge against
inflation; this was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and
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declining economy and decided to bail out at that time. In 1987 and 1990,
the average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Air Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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<TABLE>
<CAPTION>
Annual Percent Change
---------------------
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following list
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summarizes the positive and negative factors that are likely to influence the
U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This is a
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HVS International, Mineola, New York Overview of External Forces 52
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good indication that hotel values will return to record levels in the next
two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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================================================================================
6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year to Date Average Annual
(August) Compounded
-------------- Growth
1989 1990 1991 1992 1993 1994 1995 1995 1996 1989 - 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 561 561 561 561 561 582 643 643 640
Annual Guestroom Supply 204,675 204,675 204,675 204,675 204,675 212,309 234,695 156,249 156,249
Percent Change -- 0.0% 0.0% 0.0% 0.0% 3.7% 10.5% -- 0.0% 2.3%
Room Night Demand 132,425 125,466 117,279 125,875 136,109 137,152 166,633 109,999 114,062
Percent Change -- (5.3)% (6.5)% 7.3% 8.1% 0.8% 21.5% -- 3.7% 3.9%
Occupancy 64.7% 61.3% 57.3% 61.5% 66.5% 64.6% 71.0% 70.4% 73.0%
Percent Change -- (5.3)% (6.5)% 7.3% 8.1% (2.9%) 9.9% -- 3.7% 1.6%
Average Rate $81.41 $79.11 $71.24 $65.72 $66.32 $65.09 $67.52 $66.34 $70.15
Percent Change -- (2.8)% (9.9)% (7.7)% 0.9% (1.9%) 3.7% -- 5.7% (3.1)%
RevPAR $52.67 $48.49 $40.82 $40.42 $44.10 $42.05 $47.94 $46.70 $51.21
Percent Change -- (7.9)% (15.8)% (1.0)% 9.1% (4.7%) 14.0% -- 9.6% (1.6)%
</TABLE>
Note: The 82-unit Fairfield Inn opened in October of 1994
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HVS International, Mineola, New York Lodging Market Supply and Demand 56
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
As indicated by the preceding table, room supply in the competitive market has
remained fairly stable over the past six years, except for the opening on
October 15, 1994, of a Fairfield Inn, approximately five miles northeast of the
subject property. The increase in guestroom supply from 1994 to 1995 is
attributable to the fact that the Fairfield Inn was open for a full year in
1995, as opposed to only two and one-half months in 1994.
In 1990 and 1991, the competitive market registered decreases of 5.3% and 6.5%,
respectively, in room demand, which can be attributed to the nationwide
recession and the Persian Gulf War. Lodging demand recovered substantially in
1992, recording a strong 7.3% increase. It must be noted, however, that average
rates for this year registered a significant drop of 7.7%, which may have
contributed to the strong demand level. Room night demand increased
significantly, by 8.1%, in 1993, indicative of a continued recovery from the
economic downturn. It is important to note that January, 1993, was an
exceptional month weather-wise, with the Blizzard of 1993 storming through the
region. Local hotels recorded significant occupancy levels as many travelers
were stranded in the area. Considering the additional room supply in the market,
along with the exceptional occupancy level in January of 1993, the slight
increase of 0.8% in 1994 does not suggest that the market experienced a
significant slowing trend.
Concrete evidence of the market's relative strength is demonstrated by the 21.5%
increase in demand reported in 1995. A majority of this remarkable increase in
occupancy can be attributed to the opening of the Fairfield Inn in October of
1994, which increased the areawide room supply by 14.6%. The addition of these
rooms to the market supported this increase in demand as this new property was
able to accommodate the demand that had previously been unaccommodated by the
existing hotels. The balance of the increase can be ascribed to the area's
continued recovery from the economic recession experienced during the early
years of the decade.
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HVS International, Mineola, New York Lodging Market Supply and Demand 57
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In the first eight months of 1996, demand increased by 3.7% over the
corresponding period in 1995. This further growth can be attributed to the
continuing improvement in the regional economy and the resulting higher demand
for hotel accommodations. Between 1989 and 1995, room night demand rose at an
average annual compounded rate of 3.9%. The overall change in occupancy from
64.7% in 1989 to 71.0% in 1995 equates to an average annual compounded growth
rate of 1.6%.
Average rate declined by 2.8% in 1990, and then plummeted by 9.9% in 1991,
reflective of the nationwide recession and the Persian Gulf War. Moreover,
Grumman, a major defense contractor and at one time the largest employer on Long
Island, underwent significant cutbacks in 1991 as a result of a nationwide
scale-back of the defense budget following the declaration of the Cold War's
end. The overall economy in the region was devastated. Local lodging facilities
reacted to the negative economic climate by decreasing average rates in an
effort to maintain occupancy levels. Average rates registered a further 7.7%
decline in 1992; this strategy was somewhat successful as occupancy in that year
rose by 7.3%, resulting in a minimal 1.0% decrease in RevPAR.
As occupancy levels continued to rise in 1993, the market made some cautious
attempts to recover average rates, which increased 0.9% in that year. Reflective
of the cautious reaction to the additional room supply in the market following
the opening of the Fairfield Inn, average rate decreased by 1.9% in 1994. In
1995 and year-to-date (through August) 1996, areawide occupancy surpassed the
70% mark for the first time since the 1980s. In response to this healthy demand
level, hotel management took an aggressive position with respect to average
rates. As a result, the market registered a 3.7% increase in average rate in
1995; a further gain of 5.7% was recorded in year-to-date 1996 when compared to
results for the corresponding months of 1995. However, it must be noted that the
areawide average rate remains well below the peak rate of $81.41 achieved in
1989. Overall, average rate in the market declined at an average annual
compounded rate of 3.1% between 1989 and 1995.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
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Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in Nassau County
is generated primarily by the following three market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the year-end 1996 distribution of accommodated hotel room
night demand as follows.
================================================================================
Table 6-2 Estimated Year-end 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
--------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 113,000 61% 14,000 56%
Meeting and Group 13,000 7 0 0
Leisure 59,000 32 11,000 44
------- --- ------ ---
Total 185,000 100% 25,000 100%
- --------------------------------------------------------------------------------
Commercial demand predominates in the local market area, accounting for
approximately 61% of the room night demand in 1996. Leisure demand shows a
relatively strong presence, capturing approximately 32% of the market. Meeting
and group demand recorded a 7% share of the room night demand. The subject
property's market segmentation differs from that of the market as a whole,
largely due to the limited meeting space available at the hotel. Furthermore,
the hotel demonstrates a stronger orientation to the leisure segment than the
market as a whole and a somewhat weaker presence in the commercial segment. This
leisure orientation is due to the nature of the Howard Johnson affiliation,
which is generally perceived to be somewhat weak in the commercial segment, and
stronger in the leisure segment of the market.
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HVS International, Mineola, New York Lodging Market Supply and Demand 59
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Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual business people who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 persons per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
Business travelers tend not to be particularly rate-sensitive, and will make use
of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates. Future
commercial demand potential is tied to the business and economic health of the
surrounding area. During the past ten years, the economies of Nassau County and
Long Island as a whole have shown moderately favorable growth trends, although
economic trends indicate a considerable slowing in the early 1990s.
Commercial business is forecasted to contribute approximately 61% of the
competitive market's total year-end 1996 room night demand. According to local
hotel representatives, major commercial demand generators in the area include
companies located in the 200/300 Jericho Quad/Chemical Bank office complex and
the One and Two Jericho Plaza office complex, as well as other manufacturing and
service companies that are situated in the area. These firms represent various
economic sectors, including services, manufacturing, and FIRE (finance,
insurance, and real estate). This diversity is significant because the area's
major sources of commercial demand are not tied to the health of one particular
industry.
We generally find a multiplier effect between employment growth in certain
sectors and the increase in commercial lodging demand (i.e., one new FIRE
employee will correspond to more than one new visitor). In conjunction with the
recent trend of slower growth in the local economy, commercial demand increases
have become more moderate. As the national and international economies improve
and prominent local businesses increase their production and employment levels,
commercial hotel demand is
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HVS International, Mineola, New York Lodging Market Supply and Demand 60
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expected to rebound quickly. According to data provided by Smith Travel
Research, total hotel demand in the competitive market rose at an average annual
compounded growth rate of 3.9% between 1989 and 1995. However, this growth rate
includes the 21.5% surge in demand recorded in 1995 as a result of the opening
of the Fairfield Inn. Over the long term, growth from this segment is expected
to be more moderate. Accordingly, we project that commercial demand (which
comprises more than 61% of the total market) will increase by 3% in 1997 and
1998. Thereafter, we project demand in this segment to stabilize at 2% annual
growth throughout the remainder of the projection period.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 persons per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group demand in Nassau County is generated primarily by local
businesses, and include functions such as training sessions, product
announcements, meetings, and seminars. Most of these meetings are small, and
range from 15 to 20 people. Non-commercial groups, such as civic associations
and professional societies, are a secondary source of meeting and group demand.
These types of meetings often range from 75 to 250 people. Most of the meetings
and group functions in Nassau County are held at local hotels. Because the
subject property is a limited-service facility and offers only two small meeting
rooms totaling approximately 800 square feet of space, participation in this
segment is inherently limited. Moreover, based on our discussions with on-site
management of the subject property, participation in this segment is considered
minimal.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout sessions, meals,
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HVS International, Mineola, New York Lodging Market Supply and Demand 61
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and receptions; recreational amenities; and a sufficient number of guestrooms to
house the attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus growth
in this segment tends to lag slightly behind increases in commercial demand.
In light of this information and the relevant economic and demographic trends,
we estimate that meeting and group demand in the subject property's market area
will increase by 2% in 1997 and stabilize at the same rate annually thereafter.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 persons per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. Within the subject property's market area,
leisure demand consists primarily of people attending events at the Westbury
Music Fair, the Nassau Coliseum, or Hofstra University, or visiting friends and
relatives. Additionally, leisure demand is also generated during the summer
months by persons visiting the local beaches; because of the subject property's
location along the Long Island Expressway and Jericho Turnpike and its proximity
to the Meadowbrook Parkway (a main access road to the south shore beaches), the
subject property is well suited for capturing this type of demand.
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Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Based
on our economic and demographic analysis of the area and our review of the
operating histories of the individual properties within the market, we have
forecasted growth in this segment of 1% annually throughout the projection
period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rate
---------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Commercial 3.0% 3.0% 2.0% 2.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 2.0 2.0 2.0
Leisure 1.0 1.0 1.0 1.0 1.0 1.0
Annual Average Growth (6.2)% 7.1% 1.8% 1.8% 1.8% 1.8%
- --------------------------------------------------------------------------------
The Plainview Plaza, one of the subjeoperty's primary competitors, plans to
close 72 of its guestrooms in 1997 for renovations; following the renovation,
this block of rooms will reopen in 1998 as 36 suites. With 72 fewer guestrooms
in the market during the renovation process, we anticipate an overall decline in
demand of 6.2%, as much of the demand previously accommodated by these rooms
will be displaced. With the reopening of the new suites in 1998, some of this
demand is expected to be recaptured. This recapture, together with the
underlying growth in the market, results in a total increase of 7.1% in 1998.
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
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HVS International, Mineola, New York Lodging Market Supply and Demand 63
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COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Nassau County area is served by
numerous hotels and motels located throughout the region. Unlike many other
suburban market areas, these properties are not concentrated in clusters, but
rather are spread throughout the area, generally proximate to the major highways
that serve Long Island. We have identified five properties that are considered
primarily competitive with the Howard Johnson Westbury_. These hotels have been
selected based on their proximity to the subject property and, more
significantly, to the demand generators that the Howard Johnson Westbury_
serves. Including the subject property, these primary competitors totaled 684
guestrooms in estimated year-end 1996.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors. This information was compiled from personal interviews,
inspections, lodging directories, and our in-house library of operating data.
The table also sets forth each property's penetration factors; penetration is
the ratio between a specific hotel's operating results and the corresponding
data for the market. If the penetration factor is greater than 100%, the
property is performing better than the market as a whole; conversely, if the
penetration is less than 100%, the hotel is performing at a level below the
marketwide average.
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Table 6-4 Competitive Lodging Facilities
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
------------------------- ----------------------------
Year Number Meeting Meeting Mtg.& Average
Property/Location Opened of Rooms Space Space/Room Comm. Group Leisure Occupancy Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
120 Jericho Turnpike, Westbury 1967 80 800 10 55% 0% 45% 82.5% $65.28 $53.86
Fairfield Inn
24 Oak Drive, Syosset 1994 82 805 10 75 0 25 73.0 68.00 49.64
Holiday Inn
369 Old Country Road, Westbury 1973 153 4,600 30 50 20 30 80.0 90.00 72.00
Ramada Limited
8030 Jericho Turnpike, Woodbury 1972 102 1,342 13 60 0 40 75.0 60.00 45.00
Quality Inn
7940 Jerich Turnpike, Woodbury 1965 85 0 0 60 0 40 74.0 54.00 39.96
Plainview Plaza
150 Sunnyside Blvd, Plainview 1962 182 2,575 14 70 10 20 53.0 56.00 29.68
- ------------------------------------------------------------------------------------------------------------------------------------
Totals/Averages 684 61% 7% 32% 70.8% $67.72 $47.93
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Estimated 1996
------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate RevPAR Penetration Penetration
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
120 Jericho Turnpike, Westbury 84.1% $67.67 $56.92 113.3% 109.1%
Fairfield Inn
24 Oak Drive, Syosset 80.0 70.00 56.00 107.7 107.4
Holiday Inn
369 Old Country Road, Westbury 82.0 92.00 75.44 110.4 144.6
Ramada Limited
8030 Jericho Turnpike, Woodbury 76.0 62.00 47.12 102.3 90.3
Quality Inn
7940 Jerich Turnpike, Woodbury 74.0 56.00 41.44 99.6 79.4
Plainview Plaza
150 Sunnyside Blvd, Plainview 60.0 61.00 36.60 80.8 70.2
- -----------------------------------------------------------------------------------------------
Totals/Averages 74.3% $70.24 $52.16 100.0% 100.0%
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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HVS International, Mineola, New York Lodging Market Supply and Demand 65
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Our survey of the primarily competitive hotels in the subject property's market
shows that these properties range in size from 80 rooms (subject property) to
182 rooms (Plainview Plaza). The market demand has a strong commercial
orientation; in 1996, this segment contributed 61% of the overall occupancy. The
leisure segment accounted for 32% of the total, followed by the meeting and
group segment at 7%.
By year-end 1996, the primary competitors are forecast to achieve an overall
occupancy of 74.3% at an average rate of $70.24, equating to a RevPAR of $52.16.
This represents a significant improvement over the comparable data for the
previous year. The greatest occupancy gains were reported by the Plainview Plaza
and the Fairfield Inn. With the exception of the Plainview Plaza, which
exhibited stronger growth, all properties in the market are expected to achieve
an estimated $2.00 increase in average rate.
In terms of occupancy, the subject property is the market leader in the
competitive set, registering an 82.5% level in 1995, and an estimated 84.1% for
year-end 1996. This high occupancy can be attributed to the subject property's
superior location, as well as to the relatively small number of rooms. It is
important to note that the subject property is one of the older properties in
the market and is therefore more susceptible to any new competition moving into
the area. In estimated year-end 1996, the subject property achieved a RevPAR of
$56.92, which was higher than the $52.16 average for the competitive set,
resulting in a yield penetration of 109.1%.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Fairfield Inn
The Fairfield Inn opened in Syosset, approximately five miles northeast of the
subject property, on October 15, 1994. This property was originally constructed
as a senior citizen home in 1991. However, due to the economic downturn of the
Long Island market, the facility reportedly never opened. In response to the
recent recovery of the regional economy, the facility was converted for
transient use. The property contains 82 guestrooms and one small meeting room
that can accommodate approximately 20 persons. Recreational facilities include a
small fitness room and a game room. The hotel is currently owned by Gold Crest
Properties and managed by Green Brier Inns. We estimate that the Fairfield Inn
will derive approximately 75% of its year-end 1996 demand from the commercial
segment and the remaining 25% from leisure travelers. Because of its limited
amount of meeting space, the property derives minimal demand from the meeting
and group
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HVS International, Mineola, New York Lodging Market Supply and Demand 66
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segment. This property benefits from its affiliation as a Fairfield Inn by
Marriott, which is one of the most successful limited-service brands in the
market today.
Holiday Inn
The Holiday Inn is situated on Old Country Road in Westbury. In this location,
the hotel is proximate to the concentrations of retail space (including
Roosevelt Field and the redeveloped Roosevelt Raceway) that are the focal point
of retail activity for all of Long Island. This property is owned and operated
by Westbury Hotel Operators under a franchise agreement with Holiday Inn
Worldwide; the restaurant and meeting facilities are leased to an independent
third party.
The Holiday Inn contains 153 guestrooms. Meeting space is situated on a
below-ground level and consists of three rooms that can accommodate 200 persons.
Additional amenities include a restaurant, a lounge, an outdoor swimming pool,
and a sauna. We estimate that for year-end 1996, the Holiday Inn will derive
approximately 50% of its occupancy from the commercial segment, 20% from meeting
and group demand, and 30% from leisure travelers.
Ramada Limited
The Ramada Limited is located in Woodbury, approximately six miles northeast of
the subject property, on Jericho Turnpike. Currently underway at this property
is a renovation that encompasses the replacement of some of the soft goods in
all guestrooms and the installation of electronic door locks on all guestroom
doors. The Ramada Limited reportedly was constructed in 1972. The hotel was
operated as a full-service property known as the Ramada Inn until 1990 when the
food and beverage outlets were closed and the hotel was renamed the Ramada
Limited. According to management of the Ramada Limited, the hotel was previously
operated by Crossroad Hospitality. However, the management contract was not
renewed in September of 1994. The hotel is currently independently owned and
operated by BDSP Holding Corporation. This facility offers two meeting rooms
with a maximum capacity of 60 people.
We estimate that the Ramada Limited will derive approximately 60% of its
year-end 1996 room nights from the commercial segment, while the remaining 40%
will be generated by leisure travelers.
Quality Inn
The Quality Inn is located in Woodbury, approximately six miles northeast of the
subject property. This hotel had reportedly not been renovated for about six or
seven years and thus represented a very tired facility. The
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Quality Inn was purchased by Woodbury Hotel Associates in December of 1995 and
is now undergoing extensive renovations. The scope of the renovations
encompasses a new hotel lobby, guestroom beds, vanity units, showers, and soft
goods. New HVAC units are being installed in all of the guestrooms as well as
electronic door locks and televisions. New case goods are to be installed in all
of the guestrooms some time in the near future. The parking lot was recently
resurfaced as part of the renovation process.
The Quality Inn features exterior corridors, and its location is set back from a
Chinese restaurant on Jericho Turnpike. Although a tall billboard sign is
situated along Jericho Turnpike to assist motorists in locating the hotel,
visibility of the property is inherently limited. We estimate that the Quality
Inn will derive approximately 60% of its year-end 1996 demand from commercial
business. The remaining 40% will be generated by leisure travelers.
Plainview Plaza
The Plainview Plaza is located approximately seven miles northeast of the
subject property, along the southern service road of the Long Island Expressway.
As a result of its location, the property enjoys excellent visibility from the
expressway. In addition to 182 guestrooms, the hotel contains an outdoor
swimming pool and meeting space that can accommodate up to 200 people. A
100-seat restaurant and a 70-seat lounge are also available. The Plainview Plaza
was formerly affiliated with Howard Johnson. However, in January of 1995, the
affiliation was discontinued.
According to our discussions with current management of this property, the hotel
replaced the draperies and bedspreads in all guestrooms at the end of 1994.
Approximately $350,000 was spent in 1995 to further maintain the property. In
1997, the Plainview Plaza will once again undergo renovations. A 72-room
guestroom wing will be converted into an all-suite wing housing 36 suites; these
units are scheduled to open in 1998. We estimate that the property will derive
approximately 70% of its year-end 1996 occupancy from commercial demand, 10%
from attendees of meeting and group functions, and the remaining 20% from
leisure travelers.
Proposed Competitors
Based on our fieldwork in the market and our discussions with local hotel
operators, developers, and government officials, there appear to be no hotel
properties proposed or under construction that are likely to compete with the
subject property. However, numerous hotel companies and developers have
expressed a high level of interest in the Nassau County market area. Moreover,
the high areawide occupancy levels suggest that the addition of new supply
should be prudently factored into an occupancy forecast. Our
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HVS International, Mineola, New York Lodging Market Supply and Demand 68
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experience indicates that once markets surpass occupancies levels in the mid-70%
range, there is often some demand that cannot be accommodated by the existing
hotels. Moreover, investors and developers rapidly become interested in such
strong markets, particularly when the area is characterized by a degree of
economic growth, thus increasing the likelihood of construction. In light of
these factors and the cyclical nature of the lodging industry, we have included
a hypothetical 100-room, limited-service hotel that is projected to be directly
competitive with the subject property and is assumed to be open by January 1,
1999. The inclusion of such a facility will enable us to develop a more
realistic model of the probable future trends in occupancy in the subject market
area, and thus a more reliable estimate of stabilized occupancy for the subject
property.
Conclusion
According to data supplied by Smith Travel Research, marketwide demand increased
significantly in 1995, by 21.5%, and grew a further 3.7% in year-to-date
(August) 1996. Marketwide average rates also posted healthy gains, rising from
$65.09 in 1994 to $67.52 in 1995. Year-to-date statistics show a 5.7% gain, with
average rate growing from $66.34 in year-to-date 1995 to $70.15 in year-to date
1996.
A majority of the area's lodging demand is generated by commercial travelers,
who will constitute roughly 61% of the total year-end 1996 occupancy. All of the
competitive hotels derived at least 50% of their demand from commercial
business. Leisure demand contributed roughly 32% of the total, and the meeting
and group market segment accounted for the remaining 7%. We have not identified
any new hotels, proposed or under construction, that are likely to be
competitive with the subject property. However, we have incorporated the opening
of a hypothetical 100-room, limited-service hotel into our analysis as of
January 1, 1999, as we believe the strength of the market will result in future
additions to the local lodging supply.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year to Date (August)
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 73.8% 82.5% 80.3% 84.9%
Percent Change NA% 11.8% -- 5.7%
Occupancy Penetration 114.2% 116.2% 114.1% 116.3%
Average Rate $ 62.46 $ 65.28 $ 64.20 $ 67.64
Percent Change N/A% 4.5% -- 5.4%
Average Rate Penetration 96.0% 96.7% 96.8% 96.4%
RevPAR $ 46.08 $ 53.87 $ 51.58 $ 57.43
Percent Change N/A% 16.9% -- 11.3%
RevPAR Penetration 109.6% 112.4% 110.4% 112.1%
Areawide (STR)
Occupancy 64.6% 71.0% 70.4% 73.0%
Percent Change (2.9)% 9.9% -- 3.7%
Average Rate $ 65.09 $ 67.52 $ 66.34 $ 70.15
Percent Change (1.9)% 3.7% -- 5.7%
RevPAR $ 42.05 $ 47.94 $ 46.70 $ 51.21
Percent Change (4.7)% 14.0% -- 9.6%
- --------------------------------------------------------------------------------
Operating data for the subject property was available only for calendar years
1994 and 1995, and for year-to-date (through August) 1996. The preceding table
shows that the subject property outperformed the market in terms of occupancy in
1994, 1995, and year-to-date 1996. However, this performance was not matched in
terms of average rate, as the subject property registered average rates that
were lower than the market averages in 1994 and 1995. In year-to-date 1996, the
subject property's average rate performance improved when compared to the
corresponding eight months of 1995. As a result of the subject property's
greater-than-marketwide occupancies, the hotel has consistently recorded RevPAR
levels higher than the market average.
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The hotel's penetration rates have followed a similar trend, with occupancy
penetration rate remaining above the hotel's fair share (100%) in 1994, 1995,
and year-to-date 1996. Because of the hotel's below-market average rate, its
penetration rate did not reached a fair share level (100%) during the historical
period. As a result of this combination of strong occupancy and below-market
average rate, RevPAR penetration levels have consistently been above the hotel's
fair share of 100%.
A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy from 1994 through year-to-date (August) 1996.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1994 1995 1996 Year to Date
---- ---- -----------------
Occupancy Occupancy % Change Occupancy % Change
--------- --------- -------- --------- --------
January 56.2% 56.2% 0.0% 68.3% 21.5%
February 67.5 67.5 0.0 75.9 12.4
March 76.9 76.9 0.0 79.1 2.9
April 75.5 75.5 0.0 91.3 20.9
May 87.2 85.2 (2.3) 88.0 3.3
June 88.3 92.4 4.6 89.7 (2.9)
July 80.0 90.7 13.4 89.8 (1.0)
August 84.6 97.3 15.0 96.7 (0.6)
September 78.7 90.9 15.5 0.0 0.0
October 69.3 92.1 32.9 0.0 0.0
November 63.3 85.5 35.1 0.0 0.0
December 57.6 79.0 37.2 0.0 0.0
----- ----- ----- ---- ----
Full Year 73.8% 82.5% 11.8% N/A% N/A%
- --------------------------------------------------------------------------------
The subject property's peak season is in the spring and summer, from March
through the end of September, with occupancies percentages in the 80s and 90s
during this period. The fall months - September, October, and November - also
perform well, with occupancies in 1995 reaching levels in the mid 80% to low 90%
range. These higher occupancy levels are attributed to the influx of commercial
travelers in Nassau County during the mid to late summer. As mentioned in
earlier sections of the report, occupancy levels are increasing due to the
improved economy and more favorable economic climate. In the subject market
area, occupancy declines moderately
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during the winter months owing to reduced commercial and leisure business.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
The total annual number of room nights occupied in the competitive hotels
equates to the market's estimated year-end 1996 accommodated room night demand,
as shown in the following table.
================================================================================
Table 7-3 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-----------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 113,000 61% 14,000 56%
Meeting and Group 13,000 7 0 0
Leisure 59,000 32 11,000 44
------- --- ------ ---
Total 185,000 100% 25,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand.
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Unaccommodated Demand
Unaccommodated demand refers to individuals who are unable to secure
accommodations in the market because all of the local hotels are filled. These
travelers must defer their trips, settle for less desirable accommodations, or
stay in properties located outside the market area. Because this demand did not
yield occupied room nights, it is not included in the estimate of historical
accommodated room night demand.
Induced Demand
Induced demand represents the additional room nights that are expected to be
attracted to the market following the introduction of a new demand generator.
Situations that can induce demand include the opening of a new manufacturing
plant, the expansion of a convention center, or the addition of a new hotel with
a distinct chain affiliation or unique facilities.
As mentioned in a previous section of this report, the Old Country Road corridor
has been the focus of several new retail developments. Although we believe that
there might be some induced demand entering the market as a result of the
opening of these large retail stores, for the purpose of this report, we did not
incorporate any induced demand into our room night analysis as a result of the
new development; however, we did consider this factor in our final selection of
a stabilized occupancy level.
It should be noted, however, that marketwide demand will be reduced by an
estimated 15,800 room nights in 1997. This reduction reflects the planned
renovation at the Plainview Plaza, whereby 72 standard guestrooms will be
removed from the supply and converted into 36 suites. We have shown 50% of the
demand returning in 1998, when the 36 suites are scheduled to open; however the
balance of 50% will remain unaccommodated. These calculations are shown in the
following table.
================================================================================
Table 7-4 Induced Demand Calculation
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Phase-in: (100)% (50)% (50)% (50)% (50)% (50)%
Commercial (11,000) (5,500) (5,500) (5,500) (5,500) (5,500)
Meeting and Group (1,600) (800) (800) (800) (800) (800)
Leisure (3,200) (1,600) (1,600) (1,600) (1,600) (1,600)
------- ------- ------- ------- -------- -------
Total (15,800) (7,900) (7,900) (7,900) (7,900) (7,900)
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Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market. The following table shows the projected annual change in accommodated
and usable room night demand in the subject property's competitive market.
================================================================================
Table 7-5 Total Usable Room Night Demand
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<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- 3.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 113,026 116,417 119,910 122,308 124,754 127,249 129,794 132,390
Usable Latent -- (11,000) (5,500) (5,500) (5,500) (5,500) (5,500) (5,500)
Meeting and Group
Growth Rate -- 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 13,145 13,408 13,676 13,950 14,229 14,514 14,804 15,100
Usable Latent -- (1,600) (800) (800) (800) (800) (800) (800)
Leisure
Growth Rate -- 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 59,252 59,845 60,443 61,047 61,657 62,274 62,897 63,526
Usable Latent -- (3,200) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600)
Totals
Commercial 113,026 105,417 114,410 116,808 119,254 121,749 124,294 126,890
Meeting and Group 13,145 11,808 12,876 13,150 13,429 13,714 14,004 14,300
Leisure 59,252 56,645 58,843 59,447 60,057 60,674 61,297 61,926
Airline 0 0 0 0 0 0 0 0
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL DEMAND 185,423 173,870 186,129 189,405 192,740 196,137 199,595 203,116
Annual Forecasted Growth (6.2)% 7.1% 1.8% 1.8% 1.8% 1.8% 1.8%
</TABLE>
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Guestroom Supply
In estimated year-end 1996, the competitive properties provided a total of 684
guestrooms. The room supply is expected to change in 1997 with the closure of 72
guestrooms at the Plainview Plaza hotel for renovation, and the reopening of 36
renovated suites in 1998. As discussed earlier in the section entitled Lodging
Market Supply and Demand Analysis, we have included a hypothetical 100-room,
limited-service hotel that is projected to be directly competitive with the
subject property and is assumed to be open by
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January 1, 1999. With these changes, room supply is projected to increase to 748
rooms in 1999.
The following table shows the projected competitive supply of available rooms
and available room nights. To calculate the annual number of available room
nights, the number of available rooms is multiplied by 365.
================================================================================
Table 7-6 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
----------------------------------------------------------
Historical 185,423 249,660 74%
1997 173,870 223,380 78
1998 186,129 236,520 79
1999 189,405 273,020 69
2000 192,740 273,020 71
2001 196,137 273,020 72
2002 199,595 273,020 73
2003 203,116 273,020 74
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
With forecasted growth in demand, overall competitive occupancy is expected to
increase from 74% in year-end 1996 to 79% by 1998. However, with the opening of
the hypothetical property in 1999, the projected increase in room supply is
expected to adversely impact areawide occupancy by ten percentage points,
dropping overall occupancy to 69% in that year. From the year 2000 and beyond,
growth in room demand is expected to fully absorb the increase in room supply
occurring in 1999, and overall competitive occupancy is expected to increase
steadily.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, or leisure), or the number of room nights
actually accommodated per year, per room, per market segment. For example, if a
hotel has a commercial competitive index of 190, each room in the property is
occupied 190 times a year by a commercial traveler. The competitive index is
calculated by dividing a hotel's annual accommodated room night demand in a
particular market segment by that property's room count. Competitive indexes
will be used to illustrate
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each property's position in the market based on its ability to compete with
other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market ranged from 153 to 219. With an index of 219, the Fairfield Inn was the
most competitive property in the commercial market in year-end 1996. At 169, the
subject property ranked second, followed by the Ramada Limited at 166. We have
assumed that the subject property has reached stabilization at 169 and shall
maintain the same index throughout the projection period. Indexes for the
Fairfield Inn, the Holiday Inn, and the Ramada Limited are also expected to
remain unchanged during the projection period; these properties are not planning
any significant renovations in the next few years that would alter their
competitiveness.
Current renovations at the Plainview Plaza and the Quality Inn are expected to
increase their competitiveness in the commercial market during the projection
period. The proposed hypothetical hotel has been given a stabilized competitive
index similar to that for the Fairfield Inn, as we believe that if a new hotel
were to open in the market, it would probably be a property with a positioning
similar to that of a Fairfield Inn, a Hampton Inn, or a Marriott Courtyard.
================================================================================
Table 7-7 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 169 169 169 169 169 169
Fairfield Inn 219 219 219 219 219 219
Holiday Inn 150 150 150 150 150 150
Ramada Limited 166 166 166 166 166 166
Quality Inn 162 170 175 175 175 175
Plainview Plaza 153 155 156 156 156 156
Proposed Hotel 0 0 0 190 200 220
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Meeting and Group Segment
There are only two hotels in the market with facilities capable of accommodating
large meetings and groups: the Holiday Inn and the Plainview Plaza. The Holiday
Inn contains meeting space that can accommodate up to 200 people. Although more
of a tourist hotel, the Plainview Plaza offers meeting facilities with a
200-person, theater-style capacity, and a ballroom that can be divided into
three rooms through the use of air walls. With the recent renovation of the
Plainview Plaza, we believe that this hotel will be
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able to participate more extensively in the meeting and group segment. Because
the subject property offers only 800 square feet of meeting space, participation
in this segment is inherently limited. Based on our conversations with
management of the subject property, the Howard Johnson Westbury derives
negligible demand from this segment.
The following table illustrates the competitive indexes in the meeting and group
segment.
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Table 7-8 Meeting and Group Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001
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Subject Property 0 0 0 0 0 0
Fairfield Inn 0 0 0 0 0 0
Holiday Inn 60 60 60 60 60 60
Ramada Limited 0 0 0 0 0 0
Quality Inn 0 0 0 0 0 0
Plainview Plaza 22 25 26 26 26 26
Proposed Hotel 0 0 0 0 0 0
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Leisure Segment
With an index of 138, the subject property was the most competitive property in
the leisure market in estimated year-end 1996. The Ramada Limited was the
second-most competitive at 111, followed by the Quality Inn, which achieved a
competitive index of 108 in year-end 1996. The subject property's lack of
participation in the meeting and group segment, and orientation towards the
commercial and leisure market segments explain the subject property's strength
in the leisure segment. We have assumed that the subject property has reached
stabilization at 138 and have forecast that the hotel will maintain this
historical level throughout the projection period. Additionally, the Fairfield
Inn, the Holiday Inn, and the Ramada Limited will also retain the same indexes
through the projection period, as no changes or renovations are planned at these
properties that would increase their competitiveness in the leisure segment.
Current renovations at the Plainview Plaza and the Quality Inn are expected to
increase the competitiveness of these properties in the leisure market during
the projection period. The proposed hypothetical hotel has been given a
stabilized competitive index similar to that of the Fairfield Inn; as noted
previously, we believe that if a new hotel were to open in the
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market, it would most likely be a property with a positioning similar to that of
a Fairfield Inn, a Hampton Inn, or a Marriott Courtyard.
The following table illustrates the competitive indexes in the leisure segment.
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Table 7-9 Leisure Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001
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Subject Property 138 138 138 138 138 138
Fairfield Inn 73 73 73 73 73 73
Holiday Inn 90 90 90 90 90 90
Ramada Limited 111 111 111 111 111 111
Quality Inn 108 110 115 115 115 115
Plainview Plaza 44 54 60 60 60 60
Proposed Hotel 0 0 0 60 70 75
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Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
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Table 7-10 Room Nights Captured by the Subject Property
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1997 1998 1999 2000 2001 2002
-------------------------------------------------------------
Commercial
Demand 105,417 114,410 116,808 119,254 121,749 124,294
Market Share 0.1314 0.1240 0.1056 0.1048 0.1032 0.1032
-------- --------- --------- -------- -------- -------
Capture 13,856 14,190 12,337 12,497 12,564 12,827
Meeting and Group
Demand 11,808 12,876 13,150 13,429 13,714 14,004
Market Share 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
-------- --------- --------- -------- -------- -------
Capture 0 0 0 0 0 0
Leisure
Demand 56,645 58,843 59,447 60,057 60,674 61,297
Market Share 0.1923 0.1820 0.1656 0.1632 0.1620 0.1608
-------- --------- --------- -------- -------- -------
Capture 10,893 10,711 9,846 9,800 9,828 9,857
Total Capture 24,749 24,900 22,183 22,298 22,393 22,684
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 80 x 365) produces the
projected occupancy percentage.
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Table 7-11 Calculation of the Subject Property's Projected Occupancy
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1997 1998 1999 2000 2001 2002
------------------------------------------------------
Total Room Nights
Captured/Year 24,749 24,901 22,183 22,297 22,392 22,684
Available Room Nights 29,200 29,200 29,200 29,200 29,200 29,200
Occupancy 84.76% 85.28% 75.97% 76.36% 76.68% 77.68%
Rounded 85% 85% 76% 76% 77% 78%
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For the purpose of forecasting income and expense, we will use the following
occupancy levels.
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Table 7-12 Occupancy Forecast
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Year Occupancy
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1997 85%
Stabilized 78
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Although the preceding room night analysis shows the subject property achieving
a 85% occupancy in 1998, we have chosen to use a stabilized level of 78%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate for calendar years 1994 and 1995 and year-to-date 1996, through August.
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Table 7-13 Subject Property's Occupancy and Average Rate by Month
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<TABLE>
<CAPTION>
1994 1995 1996 Year to Date
---- ---- -----------------
Average Average Average
Occupancy Rate Occupancy % Chg Rate % Chg Occupancy % Chg Rate % Chg
------------------ ---------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 56.2% $59.67 56.2% 0.0% $59.67 0.0% 68.3% 21.5% $65.05 9.0%
February 67.5 59.30 67.5 0.0 59.30 0.0 75.9 12.4 65.31 10.1
March 76.9 62.42 76.9 0.0 62.42 0.0 79.1 2.9 66.40 6.4
April 75.5 64.09 75.5 0.0 64.09 0.0 91.3 20.9 63.15 (1.5)
May 87.2 60.72 85.2 (2.3) 67.92 11.9 88.0 3.3 67.01 (1.3)
June 88.3 58.94 92.4 4.6 66.53 12.9 89.7 (2.9) 71.02 6.7
July 80.0 63.58 90.7 13.4 65.63 3.2 89.8 (1.0) 70.31 7.1
August 84.6 63.26 97.3 15.0 64.64 2.2 96.7 (0.6) 71.28 10.3
September 78.7 64.62 90.9 15.5 66.45 2.8 NA NA NA NA
October 69.3 64.49 92.1 32.9 68.56 6.3 NA NA NA NA
November 63.3 60.99 85.5 35.1 67.43 10.6 NA NA NA NA
December 57.6 67.93 79.0 37.2 66.52 (2.1) NA NA NA NA
Weighted Average 73.8% $62.46 82.5% 11.8% $65.28 4.5% NA% NA% NA NA%
---- ----- ---- ---- ----- --- ---- ---- ----- ----
</TABLE>
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The previous table underscores the correlation between a hotel's occupancy and
its average rate: as occupancy increases, rates tend to follow. On a monthly
basis, the Howard Johnson Westbury's average rate fluctuates_, generally showing
the highest levels in May, June, October, and November, when commercial travel
is at its peak. The subject property recorded average rates over $70 for the
first time since 1994 in June, July, and August of 1996. With the exception of
April and May of 1996 and December of 1995, the subject property has registered
consistent positive growth in average rate. Consistent increases in occupancy
have also been recorded, with the exception of May of 1995 and June and July of
1996.
Competitive Positioning
The Howard Johnson Westbury's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
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Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the estimated year-end 1996 average rate and RevPAR
of the subject property and its competitors.
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Table 7-14 Estimated Year-end 1996 Average Rate and RevPAR of the Primary
Competitors
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1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
------------------------------------------------------------------------
Subject Property $67.67 $56.92
Fairfield Inn 70.00 56.00
Holiday Inn 92.00 75.44
Ramada Limited 62.00 47.12
Quality Inn 56.00 41.44
Plainview Plaza 61.00 36.60
------ ------
Average $70.24 $52.16
------------------------------------------------------------------------
As the preceding table indicates, the Holiday Inn registered the highest average
rate, $92.00, in the market in estimated year-end 1996, followed, at some
distance, by the Fairfield Inn with $70.00. The subject property placed third,
with a $67.67 average rate. This competitive position is reasonable for the
subject property given that the Holiday Inn is a full-service hotel, and the
Fairfield Inn is the newest facility in the market. Although the Plainview Plaza
is a full-service hotel, it is operated as an independent hotel, without a
franchise, and thus has experienced difficulties in achieving high occupancies
and average rates. The recent and planned renovations at the Plainview Plaza are
expected to assist the hotel in achieving higher average rates.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
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o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Statistics provided by Smith Travel Research has indicated strong average rate
growth in the past two years, with average rate increasing 3.7% in 1995.
Furthermore average rates in the market have increased by 5.7% in 1996 over 1995
levels. The subject property has experienced a 5.4% increase in average rate in
1996 over 1995. Based on these considerations, the following table shows our
projection of average rate increases.
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Table 7-15 Average Rate Forecast
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Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
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Positioned Base -- -- -- $67.67
1997 78 % 5% to 7% 4.0% 70.38
1998 79 4 to 6 4.0 73.20
1999 69 4 to 5 3.5 75.76
2000 71 3 to 4 3.5 78.41
2001 72 3 to 4 3.5 81.16
2002 73 3 to 4 3.5 84.00
- --------------------------------------------------------------------------------
To derive a forecast of average rate for the subject property, we have
recognized the strong level of demand in the market. We anticipate that the
subject property's average rate will increase by 4% in the first two projection
years, then slow somewhat and stabilize at a growth rate of 3.5% in 1999,
equivalent to the underlying inflationary rate.
The following occupancy and average rate levels will be used to project the
subject property's rooms revenue.
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Table 7-16 Forecast of Occupancy and Average Rate
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Year Occupancy Average Rate
--------------------------------------------------
1997 85 % $70.38
Stabilized 78 73.20
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8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property, which
is physically possible, appropriately supported, financially feasible, and that
results in the highest value.(7)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(8)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(7) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(8) Ibid., p. 40.
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be its current use as a transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
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9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(9)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors, such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(9) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(10)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach are considered, and the range
of value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(10) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(11) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(11) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992,
p.236.
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on their leveraged discounted cash flow."(12) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(13)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(12) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(13) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."14
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(14) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Howard Johnson Westbury is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1967 and achieved
occupancy levels of 72.7% in 1994 and 82.5% in 1995. The following income and
expense statements were provided by Ashford Financial Corporation and are
unaudited. Where applicable, we have reorganized the statements in accordance
with the Uniform System of Accounts for Hotels.
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================================================================================
Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year: 1995 1994
Total Rooms: 80 80
Occupied Rooms: 24,094 14,243
Complimentary Rooms: 409 251
Days Open: 365 245
Occupancy: 82.5% Amount per Amount per 72.7% Amount per Amount per
Average Rate: $65.29 Percentage Available Occupied $62.94 Percentage Available Occupied
(+000) of Revenue Room Room (+000) of Revenue Room Room
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,546 95.4% $19,331 $64.18 $ 881 95.9% $11,009 $61.83
Telephone 61 3.7 757 2.51 28 3.1 350 1.97
Other Income 15 0.9 185 12.45 10 1.1 122 0.69
Total 1,622 100.0 20,273 67.31 919 100.1 11,481 64.49
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 300 19.4 3,751 12.45 183 20.8 2,285 12.84
Telephone 27 44.1 334 1.11 17 62.1 218 1.22
Other Income 0 0.0 0 0.00 0 1.1 1 0.01
Total 327 20.1 4,084 13.56 200 21.8 2,504 14.07
- -------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,295 79.9 16,188 53.75 718 78.3 8,977 50.42
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 192 11.8 2,395 7.95 116 12.7 1,454 8.17
Management Fee 49 3.0 608 2.02 28 3.0 346 1.94
Marketing 70 4.3 870 2.89 15 1.6 188 1.05
Franchise Fees 49 3.0 608 2.02 44 4.8 554 3.11
Property Oper. & Maint. 115 7.1 1,439 4.78 54 5.9 675 3.79
Energy 111 6.8 1,383 4.59 72 7.8 901 5.06
Total 584 36.0 7,302 24.25 329 35.8 4,118 23.13
- -------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 711 43.9 8,886 29.50 389 42.5 4,859 27.29
- -------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 154 9.5 1,926 6.40 72 7.9 901 5.06
Insurance 19 1.2 234 0.78 18 2.0 225 1.26
Reserve for Replacement 65 4.0 811 2.69 28 3.0 345 1.94
Ground Lease 51 3.2 643 2.13 34 3.7 428 2.41
Fixed 2 0 0.0 0 0.00 1 0.1 15 0.09
Total 289 17.9 3,613 12.00 153 16.7 1,915 10.75
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 422 26.0% $5,273 $17.50 $ 236 25.8% $2,944 $16.54
===============================================================================================================================
</TABLE>
*Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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================================================================================
Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year: 1995 YTD 1996 YTD
Total Rooms: 80 80
Occupied Rooms: 15,310 16,220
Complimentary Rooms: 0 0
Days Open: 242 243
Occupancy: 79.1% Amount per Amount per 83.4% Amount per Amount per
Average Rate: $64.46 Percentage Available Occupied $67.87 Percentage Available Occupied
(+000) of Revenue Room Room (+000) of Revenue Room Room
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $ 987 95.3% $12,336 $64.46 $1,101 95.6% $13,761 $67.87
Telephone 40 3.9 504 2.63 42 3.7 528 2.60
Other Income 8 0.8 106 0.55 9 0.8 109 0.54
Total 1,036 100.0 12,946 67.65 1,152 100.1 14,398 71.01
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 189 19.1 2,362 12.34 216 19.6 2,700 13.32
Telephone 17 42.0 212 1.11 24 55.9 295 1.46
Other Income 0 0.0 0 0.00 0 0.0 0 0.00
Total 206 19.9 2,574 13.45 240 20.8 2,995 14.77
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 830 80.1 10,371 54.19 912 79.3 11,403 56.24
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 125 12.0 1,556 8.13 131 11.4 1,642 8.10
Management Fee 31 3.0 388 2.03 35 3.0 432 2.13
Marketing 44 4.3 555 2.90 50 4.3 624 3.08
Franchise Fees 31 3.0 388 2.03 36 3.1 444 2.19
Property Oper. & Maint 73 7.1 915 4.78 65 5.6 813 4.01
Energy 75 7.2 933 4.88 76 6.6 947 4.67
Total 379 36.6 4,736 24.75 392 34.0 4,902 24.18
- ------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 451 43.5 5,635 29.44 520 45.3 6,501 32.06
- ------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 110 10.6 1,375 7.18 83 7.2 1,039 5.12
Insurance 12 1.2 154 0.81 13 1.1 165 0.81
Reserve for Replacement 41 4.0 518 2.71 46 4.0 576 2.84
Ground Lease 34 3.3 428 2.24 34 3.0 431 2.12
Fixed 2 0 0.0 0 0.00 0 0.0 0 0.00
Total 198 19.1 2,475 12.93 177 15.3 2,210 10.90
- ------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 253 24.4% $3,160 $16.51 $ 343 30.0% $4,291 $21.16
==============================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 96
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These historical income and expense statements show that operating efficiencies
were achieved in the rooms department in 1995; rooms expense declined from 20.8%
of the corresponding revenue in 1994 to 19.4% in 1995. Efficiencies have also
been achieved in the telephone department; expenses in this department were
62.1% of telephone revenue in 1994, and 44.1% in 1995. Operating expenses have
remained relatively stable; declines achieved in property operations and
maintenance for year-to-date 1996 are attributed to costs for some of the
on-site renovations being allocated to this department. Operating results for
year-to-date (through August) indicate that efficiencies have been achieved in
fixed expenses, with a decline from 19.1% of total revenue in year-to-date 1995
to 15.3% for the corresponding period in 1996. This decline is mainly
attributable to a decline in property taxes between the two time periods.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraisers'
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
82.5%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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================================================================================
Table 10-3 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
Year: 1995
Number of Rooms: 80
Occupancy: 82.5%
Average Rate: $65.29 Percent of Amount per Amount per
Occupied Rooms: 24,094 Total Available Occupied
(+000) Revenue Room Room
- --------------------------------------------------------------------------------
Revenue
Rooms $ 1,573 95.5% $19,665 $ 65.29
Telephone 59 3.6 742 2.46
Other Income 15 0.9 185 0.61
Total Revenue $ 1,647 100.0 $20,591 $ 68.37
- --------------------------------------------------------------------------------
Expenses
Rooms* $ 338 21.5% $ 4,228 $ 14.04
Telephone* 31 53.0 393 1.31
Administrative & General 192 11.6 2,395 7.95
Management Fee 49 3.0 618 2.05
Marketing 70 4.2 870 2.89
Franchise Fees 63 3.8 787 2.61
Property Oper. & Maint 104 6.3 1,295 4.30
Energy 111 6.7 1,383 4.59
Property Taxes 126 7.6 1,573 5.22
Insurance 24 1.5 300 1.00
Reserve for Replacement 66 4.0 824 2.73
Ground Lease 51 3.1 643 2.13
Total Expenses $ 1,225 74.3% $15,307 $ 50.83
- --------------------------------------------------------------------------------
Net Income $ 423 25.7% $ 5,284 $ 17.54
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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HVS International, Mineola, New York Income Capitalization Approach 98
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Table 10-4 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer
Price Index (Annualized Rate
Versus 12 Months Earlier)
-------------------------------
November May
Source of 1996 of 1997
- ------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Webber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
--- ---
Averages 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 99
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1995, the national CPI increased at an average annual
compounded rate of 3.7%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected a stabilized inflation rate of 3.5% in
1999, and annually thereafter.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
-----------------------------------------------
1997 4.0%
1998 4.0
1999 3.5
2000 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1995 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
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HVS International, Mineola, New York Income Capitalization Approach 100
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------------
Forecast Occupancy Percentage 85.0% 78.0%
Forecast Average Rate $70.38 $73.20
-----------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Forecast
Calendar Projected Average Number of Days Rooms
Year: Occupancy Room Rate of Units in Year Revenue
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 85.0% X $ 70.38 X 80 X 365 = $ 1,747
Stabilized 78.0 X 73.20 X 80 X 365 = 1,667
1999 78.0 X 75.76 X 80 X 365 = 1,726
- --------------------------------------------------------------------------------------------
</TABLE>
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 101
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long-distance calls to their personal or business accounts in this manner, the
hotel loses the revenue associated with long-distance tariffs and mark-ups, and
only receives an access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-8 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
---------------------------------------------------------------------------
Total Telephone Revenue (+000) $ 65 $ 63
Percent of Total Revenue 3.6% 3.6%
Amount Per Available Room $ 816 $ 782
Amount Per Occupied Room $ 2.62 $ 2.77
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
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HVS International, Mineola, New York Income Capitalization Approach 102
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o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-9 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 Stabilized
----------------------------------------------------------------------
Total Other Income (+000) $ 16 $ 16
Percent of Total Revenue 0.9% 0.9%
Amount Per Available Room $ 200 $ 201
Amount Per Occupied Room $ 0.64 $ 0.70
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 103
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================================================================================
Table 10-10 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------------
Total Rooms Expense (+000) $ 367 $ 367
Percent of Rooms Revenue 21.0% 22.0%
Amount per Available Room $4,584 $4,585
Amount per Occupied Room $14.79 $16.11
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-11 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------------
Total Telephone Expense (+000) $ 34 $ 34
Percent of Telephone Revenue 52.3% 54.4%
Amount per Available Room $ 425 $ 429
Amount per Occupied Room $ 1.37 $ 1.49
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 104
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In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
================================================================================
Table 10-12 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 Stabilized
-------------------------------------------------------------------------
Total Administrative & General Expense (+000) $ 207 $ 210
Percentage of Total Revenue 11.3% 12.0%
Amount per Available Room $2,588 $2,625
Amount per Occupied Room $ 8.36 $ 9.20
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 105
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Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Hotel Company, and management fees
equal 3% of total revenues. Based on our review of the current market for
management contracts, we are of the opinion that this fee is consistent with
prevailing market terms. Applying this management fee structure to the
projection of total revenue yields the following forecast of the subject
property's management fee.
================================================================================
Table 10-13 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 Stabilized
------------------------------------------------------------------
Management Fees Expense (+000) $ 55 $ 52
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 106
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Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a fixed
and variable component model.
================================================================================
Table 10-14 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------
Total Marketing Expense (+000) $ 75 $ 76
Percentage of Total Revenue 4.1% 4.4%
Amount per Available Room $ 942 $ 952
Amount per Occupied Room $3.04 $3.34
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Howard Johnson for the use of the
company's name, trade marks, and service marks. The following table illustrates
the projection of the subject property's franchise fee.
================================================================================
Table 10-15 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 Stabilized
------------------------------------------------------------------
Franchise Fees Expense (+000) $ 70 $ 67
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility
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that operates with a lower-than-normal maintenance budget is likely to
accumulate a considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-16 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Property Oper. & Maint. Expense (+000) $ 112 $ 113
Percentage of Total Revenue 6.1% 6.5%
Amount per Available Room $ 1,402 $ 1,417
Amount per Occupied Room $ 4.52 $ 4.98
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
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Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-17 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Total Energy Expense (+000) $ 119 $ 122
Percentage of Total Revenue 6.5% 7.0%
Amount per Available Room $ 1,487 $ 1,527
Amount per Occupied Room $ 4.79 $ 5.36
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-18 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Forecast Property Taxes (+000) $ 137 $ 144
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
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Based on historical levels, we project the subject property's insurance expense
at approximately $26,000 in 1997 (the first projection period). In subsequent
years, this amount is assumed to increase in tandem with inflation. The
following table outlines our projection of insurance expense.
================================================================================
Table 10-19 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
----------------------------------------------------------------
Forecast Insurance (+000) $ 26 $ 27
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
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Table 10-20 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 Stabilized
--------------------------------------------------------------------
Reserve for Replacement Expense (+000) $ 73 $ 70
- --------------------------------------------------------------------------------
Ground Lease
Despite the fee simple ownership of the subject property, the property is
encumbered by an overlease agreement that was entered into on August 22, 1966.
Ownership is required to pay Jacob Goldfarb and Malka R. Goldfarb $4,283 a
month, or approximately $51,400 per annum. This contract has been renewed twice;
the current term extends to November 25, 2014.
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning January 1, 1997, and are
expressed in inflated dollars for each year.
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Table 10-21 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Howard Johnson Westbury, Jericho, New York
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
--------------------------------------------
Calendar Years Ending: 1995 1997 Stabilized
Number of Rooms: 80 80 80
Occupancy: 82.5% 85.0% 78.0%
Average Rate: $65.29 $70.38 $73.20
Days Open: 365 365 365
Occupied Rooms: 24,094 %Gross PAR POR 24,820 %Gross PAR POR 22,776
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,546 95.4% $19,331 $64.18 $1,747 95.5% $21,838 $70.39 $1,667
Telephone 61 3.7 757 2.51 65 3.6 813 2.62 63
Other Income 15 0.9 185 0.61 16 0.9 200 0.64 16
Total Revenues 1,622 100.0 20,273 67.31 1,828 100.0 22,850 73.65 1,746
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 300 19.4 3,751 12.45 367 21.0 4,588 14.79 367
Telephone 27 44.1 334 1.11 34 52.3 425 1.37 34
Total Dept. Expenses 327 20.1 4,084 13.56 401 21.9 5,013 16.16 401
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,295 79.9 16,188 53.75 1,427 78.1 17,838 57.49 1,345
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 192 11.8 2,395 7.95 207 11.3 2,588 8.34 210
Management Fee 49 3.0 608 2.02 55 3.0 688 2.22 52
Marketing 70 4.3 870 2.89 75 4.1 938 3.02 76
Franchise Fees 49 3.0 608 2.02 70 3.8 875 2.82 67
Property Oper. & Maint. 115 7.1 1,439 4.78 112 6.1 1,400 4.51 113
Energy 111 6.8 1,383 4.59 119 6.5 1,488 4.79 122
Total Operating Expenses 584 36.0 7,302 24.25 638 34.8 7,975 25.71 640
- -----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 711 43.9 8,886 29.50 789 43.3 9,863 31.79 705
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 154 9.5 1,926 6.40 137 7.5 1,713 5.52 144
Insurance 19 1.2 234 0.78 26 1.4 325 1.05 27
Reserve for Replacement 65 4.0 811 2.69 73 4.0 913 2.94 70
Ground Lease 51 3.2 643 2.13 51 2.8 638 2.05 51
Total 289 17.9 3,613 12.00 287 15.7 3,588 11.56 292
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $422 26.0 5,272 $17.51 $502 27.6 $6,275 $20.23 $413
===================================================================================================================================
Telephone/Rooms 3.9% 3.7% 3.8%
Other Income/Rooms 1.0% 0.9% 1.0%
</TABLE>
Calendar Years Ending:
Number of Rooms:
Occupancy:
Average Rate:
Days Open:
Occupied Rooms: %Gross PAR POR
- -------------------------------------------------------------------
REVENUE
Rooms 95.5% $20,838 $73.19
Telephone 3.6 788 2.77
Other Income 0.9 200 0.70
Total Revenues 100.0 21,825 76.66
- ------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 22.0 4,588 16.11
Telephone 54.0 425 1.49
Total Dept. Expenses 23.0 5,013 17.61
- ------------------------------------------------------------------
DEPARTMENTAL INCOME 77.0 16,813 59.05
- ------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 12.0 2,625 9.22
Management Fee 3.0 650 2.28
Marketing 4.4 950 3.34
Franchise Fees 3.8 838 2.94
Property Oper. & Maint. 6.5 1,413 4.96
Energy 7.0 1,525 5.36
Total Operating Expenses 36.7 8,000 28.10
- ------------------------------------------------------------------
HOUSE PROFIT 40.3 8,813 30.95
- ------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 8.2 1,800 6.32
Insurance 1.5 338 1.19
Reserve for Replacement 4.0 875 3.07
Ground Lease 2.9 638 2.24
Total 16.6 3,650 12.82
- ------------------------------------------------------------------
NET INCOME 23.7 $5,163 $18.13
==================================================================
- --------------------------------------------------------------------------------
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Table 10-22 Ten-Year Forecast of Income and Expense, Howard Johnson Westbury,
Jericho, New York ($+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years Ending: 1997 1998 1999 2000 2001
------------------- -------------------- -------------------- ------------------- -------------------
Number of Rooms: 80 80 80 80 80
Occupied Rooms: 24,820 22,776 22,776 22,776 22,776
Occupancy: 85.0% % of 78.0% % of 78.0% % of 78.0% % of 78.0% % of
Average Rate: $70.38 Gross $73.20 Gross $75.76 Gross $78.41 Gross $81.16 Gross
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,747 95.5% $1,667 95.5% $1,726 95.5% $1,786 95.5% $1,848 95.5%
Telephone 65 3.6 63 3.6 65 3.6 67 3.6 69 3.6
Other Income 16 0.9 16 0.9 17 0.9 17 0.9 18 0.9
Total 1,828 100.0 1,746 100.0 1,808 100.0 1,870 100.0 1,935 100.0
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
DEPARTMENTAL EXPENSES
Rooms 367 21.0 367 22.0 380 22.0 393 22.0 407 22.0
Telephone 34 52.3 34 54.0 35 53.8 37 55.2 38 55.1
Total 401 21.9 401 23.0 415 23.0 430 23.0 445 23.0
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
DEPARTMENTAL INCOME 1,427 78.1 1,345 77.0 1,393 77.0 1,440 77.0 1,490 77.0
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
OPERATING EXPENSES
Administrative & General 207 11.3 210 12.0 217 12.0 225 12.0 232 12.0
Management Fee 55 3.0 52 3.0 54 3.0 56 3.0 58 3.0
Marketing 75 4.1 76 4.4 79 4.4 82 4.4 84 4.3
Franchise Fees 70 3.8 67 3.8 69 3.8 71 3.8 74 3.8
Property Oper. & Maint. 112 6.1 113 6.5 117 6.5 121 6.5 126 6.5
Energy 119 6.5 122 7.0 126 7.0 131 7.0 135 7.0
Total 638 34.8 640 36.7 662 36.7 686 36.7 709 36.6
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
HOUSE PROFIT 789 43.3 705 40.3 731 40.3 754 40.3 781 40.4
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
FIXED EXPENSES
Property Taxes 137 7.5 144 8.2 150 8.3 157 8.4 164 8.5
Insurance 26 1.4 27 1.5 28 1.5 29 1.6 30 1.6
Reserve for Replacement 73 4.0 70 4.0 72 4.0 75 4.0 77 4.0
Ground Lease 51 2.8 51 2.9 51 2.8 51 2.7 51 2.6
Total 287 15.7 292 16.6 301 16.6 312 16.7 322 16.7
- ---------------------------- ------------------- -------------------- -------------------- ------------------- -------------------
NET INCOME $502 27.6% $413 23.7% $430 23.7% $442 23.6% $459 23.7%
============================ =================== ==================== ==================== =================== ===================
<CAPTION>
Calendar Years Ending: 2002 2003 2004 2005 2006
------------------ ------------------ ------------------ ------------------- -------------------
Number of Rooms: 80 80 80 80 80
Occupied Rooms: 22,776 22,776 22,776 22,776 22,776
Occupancy: 78.0% % of 78.0% % of 78.0% % of 78.0% % of 78.0% % of
Average Rate: $84.00 Gross $86.94 Gross $89.98 Gross $93.13 Gross $96.39 Gross
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,913 95.5% $1,980 95.5% $2,049 95.5% $2,121 95.5% $2,195 95.5%
Telephone 72 3.6 74 3.6 77 3.6 80 3.6 82 3.6
Other Income 18 0.9 19 0.9 20 0.9 20 0.9 21 0.9
Total 2,003 100.0 2,073 100.0 2,146 100.0 2,221 100.0 2,298 100.0
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
DEPARTMENTAL EXPENSES
Rooms 421 22.0 436 22.0 451 22.0 467 22.0 483 22.0
Telephone 39 54.2 41 55.4 42 54.5 44 55.0 45 54.9
Total 460 23.0 477 23.0 493 23.0 511 23.0 528 23.0
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
DEPARTMENTAL INCOME 1,543 77.0 1,596 77.0 1,653 77.0 1,710 77.0 1,770 77.0
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
OPERATING EXPENSES
Administrative & General 241 12.0 249 12.0 258 12.0 267 12.0 276 12.0
Management Fee 60 3.0 62 3.0 64 3.0 67 3.0 69 3.0
Marketing 87 4.3 90 4.3 94 4.4 97 4.4 100 4.4
Franchise Fees 77 3.8 79 3.8 82 3.8 85 3.8 88 3.8
Property Oper. & Maint. 130 6.5 135 6.5 139 6.5 144 6.5 149 6.5
Energy 140 7.0 145 7.0 150 7.0 155 7.0 161 7.0
Total 735 36.6 760 36.6 787 36.7 815 36.7 843 36.7
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
HOUSE PROFIT 808 40.4 836 40.4 866 40.3 895 40.3 927 40.3
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
FIXED EXPENSES
Property Taxes 171 8.5 179 8.6 187 8.7 195 8.8 204 8.9
Insurance 31 1.5 32 1.5 33 1.5 34 1.5 35 1.5
Reserve for Replacement 80 4.0 83 4.0 86 4.0 89 4.0 92 4.0
Ground Lease 51 2.5 51 2.5 51 2.4 51 2.3 51 2.2
Total 333 16.5 345 16.6 357 16.6 369 16.6 382 16.6
- ---------------------------- ------------------ ------------------ ------------------ ------------------- -------------------
NET INCOME $475 23.9% $491 23.8% $509 23.7% $526 23.7 $545 23.7%
============================ ================== ================== ================== =================== ===================
</TABLE>
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-23 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
- --------------------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91 in the equation presented
above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent re-emergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of
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65% to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors, such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors, such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-24 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Date of Overall Total Property
Hotel City and State Rooms Sale Sales Price Rate Yield
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-25 Equity Yield Requirements
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Source Equity Yield Requirement
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Individual 20% - 24%
Institution 18% - 22%
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Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Percent of Rate of Weighted
Value Return Average
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Mortgage 0.70 X 0.111856 = 0.07830
Equity 0.30 X 0.130000 = 0.03900
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Overall Capitalization Rate 0.11730
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
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Table 10-26 Summary of Valuation Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
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Valuation of the Mortgage and
Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth as an addendum to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at roundly $3,700,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22%, then $3,700,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $2,596,000
Equity Component (30%) 1,113,000
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Total $3,709,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $2,596,000
Mortgage Constant 0.111856
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Annual Debt Service $290,378
(Say) $290,000
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-27 Forecast of Net Income to Equity
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Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
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1997 $ 502,000 - $ 290,000 = $ 212,000
1998 413,000 - 290,000 = 123,000
1999 430,000 - 290,000 = 140,000
2000 442,000 - 290,000 = 152,000
2001 459,000 - 290,000 = 169,000
2002 475,000 - 290,000 = 185,000
2003 491,000 - 290,000 = 201,000
2004 509,000 - 290,000 = 219,000
2005 526,000 - 290,000 = 236,000
2006 545,000 - 290,000 = 255,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($564,000 /0.110) $5,127,000
Less:
Brokerage and Legal Fees 154,000
Mortgage Balance 1,870,000
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Net Sale Proceeds to Equity $3,103,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-28 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
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Total Property $3,709,000 14.4%
Mortgage 2,596,000 9.4
Equity 1,113,000 22.0
Note: Whereas the mortgage constant and value are calculated on the basis
of monthly mortgage payments, the mortgage yield in this proof assumes
single annual payments. As a result, the proof's derived yield may be
slightly less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $3,700,000 value is correct based on the assumptions
used in this approach.
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Table 10-29 Total Property Yield
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Net Income before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.4% Cash Flow
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1997 $ 502,000 x 0.874288 = $ 439,000
1998 413,000 x 0.764379 = 316,000
1999 430,000 x 0.668288 = 287,000
2000 442,000 x 0.584276 = 258,000
2001 459,000 x 0.510825 = 234,000
2002 475,000 x 0.446608 = 212,000
2003 491,000 x 0.390464 = 192,000
2004 509,000 x 0.341378 = 174,000
2005 526,000 x 0.298463 = 157,000
2006 5,518,000 * x 0.260942 = 1,440,000
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Total Property Value $ 3,709,000
*10th year net income of $545,000 plus sales proceeds of $ 4,973,000
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Table 10-30 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $ 290,000 x 0.914400 = $ 265,000
1998 290,000 x 0.836128 = 242,000
1999 290,000 x 0.764555 = 222,000
2000 290,000 x 0.699110 = 203,000
2001 290,000 x 0.639266 = 185,000
2002 290,000 x 0.584545 = 170,000
2003 290,000 x 0.534508 = 155,000
2004 290,000 x 0.488754 = 142,000
2005 290,000 x 0.446917 = 130,000
2006 2,161,000 * x 0.408661 = 883,000
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Value Of Mortgage Component $ 2,597,000
*10th year debt service of $290,000
plus outstanding mortgage balance of $1,870,000
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Table 10-31 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.0% Cash Flow
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1997 $ 212,000 x 0.819487 = $ 174,000
1998 123,000 x 0.671559 = 83,000
1999 140,000 x 0.550333 = 77,000
2000 152,000 x 0.450991 = 69,000
2001 169,000 x 0.369581 = 62,000
2002 185,000 x 0.302867 = 56,000
2003 201,000 x 0.248195 = 50,000
2004 219,000 x 0.203393 = 45,000
2005 236,000 x 0.166678 = 39,000
2006 3,358,000 * x 0.136590 = 459,000
--------------
Value of Equity Component $ 1,114,000
*10th year net income to equity of $255,000
plus sales proceeds of $ 3,103,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.38%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 6% to 18%, it is our opinion that a 14% discount factor would be
appropriate for the Howard Johnson Westbury. The following table illustrates the
discounted cash flow analysis using a 14% discount factor.
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Table 10-32 Discounted Cash Flow Analysis
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Discount
Net Factor Discounted
Calendar Year Income @ 14.0% Cash Flow
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1997 $502,000 0.87719 $440,351
1998 413,000 0.76947 317,790
1999 430,000 0.67497 290,238
2000 442,000 0.59208 261,699
2001 459,000 0.51937 238,390
2002 475,000 0.45559 216,404
2003 491,000 0.39964 196,222
2004 509,000 0.35056 178,435
2005 526,000 0.30751 161,749
2006 5,518,455 * 0.26974 1,488,569
Estimated Market Value: $3,789,847
(Say:) $3,800,000
Reversion Analysis
11th Year's Net Income $564,000
Capitalization Rate 11.0%
Total Sales Proceeds $5,127,273
Less: Broker & Legal @ 3.0% 153,818
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Net Sales Proceeds $4,973,455
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(15) Method Two (which discounts the projected net
income and reversion using an overall discount rate, or total property yield)
"does not consider the impact of mortgage debt, leverage and the specific equity
demands of typical hotel investors. This technique is simple but less reliable
because the derivation of the discount rate has little support." In light of
this consideration, we have relied on the $3,700,000 value conclusion indicated
by Method One.
(15) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992,
p. 236.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available, and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
Property: Quality Inn
Location: Woodbury, New York
Date of Sale: August, 1995
Sales Price: $2,900,000
Grantor: The Estate of Frederick Phillips, et al.
Grantee: Woodbury Realty Associates
Year Opened: 1961
Number of Rooms: 85
Price per Room: $34,118
Confirmed By: Goodman Marks Associates
Comments: This property is located on Jericho Turnpike
in Woodbury. The purchase price includes the
furniture, fixtures, and equipment, and the
property is subject to a long-term lease for
a restaurant on the premises.
Sale #2:
Property: Comfort Inn
Location: 7625 Imperial Way
Fogelsville, Pennsylvania
Date of Sale: March, 1995
Sales Price: $7,000,000
Grantor: Solow Hotel Corporation
Grantee: Innkeepers USA, L.P.
Year Opened: 1990
Number of Rooms: 127
Price per Room: $55,118
Confirmed By: Pratt, White, and Whitney, Real Estate
Appraisers and Consultants
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Sale #3:
Property: Comfort Inn
Location: 629 Frontage Road
Augusta, Georgia
Date of Sale: May, 1995
Sales Price: $6,000,000
Grantor: International Management & Investment
Corporation
Grantee: Winston Hotels
Year Opened: 1989
Number of Rooms: 123
Price per Room: $48,780
Confirmed By: Schultz, Carr, Bissette & Associates
Comments: The purchaser reportedly paid a premium for
this property in order to obtain the
remaining properties in the portfolio.
Sale #4:
Property: Hampton Inn
Location: 6109 Glenwood Avenue
Raleigh, North Carolina
Date of Sale: May, 1995
Sales Price: $6,700,000
Grantor: IMIC (International Management and
Investment Corporation).
Grantee: Winston Hotels, Inc.
Year Opened: 1986
Number of Rooms: 141
Price per Room: $47,518
Confirmed By: Schultz, Carr, Bissette & Associates
Comments: The property features an outdoor swimming
pool.
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In addition to considering the preceding recent transactions, we have also
reviewed the sale of the subject property, which occurred in 1994. The details
of this transaction are summarized as follows.
Subject Property:
Property: Howard Johnson Westbury
Location: Jericho, NY
Date of Sale: May, 1994
Sales Price: $3,148,818
Grantor: Northeast Hotel Associates
Grantee: Westbury New York Hotel Limited Partnership
(an entity controlled by Ashford Financial
Corporation)
Year Opened: 1967
Number of Rooms: 80
Price per Room: $39,360
Comments: The sales price represents the allocated
purchase price for the property and included
an amount equivalent to $363,177 allocated to
upgrade the facility subsequent to the sale.
The renovation costs included capital
expenditures for 1994 and 1995.
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The subject property was
acquired by Ashford Financial Corporation from Nippon Credit Bank, Ltd. in March
of 1994 as part of a purchase of a mortgage loan secured by 15 hotel properties.
The outstanding principal balance of the nonperforming mortgage loan at the time
of acquisition was $72,840,000, and the purchase price was $18,730,000. At the
time of the closing, the mortgage loan was the subject of a settlement agreement
between Nippon Credit Bank, Ltd. and Northeast Hotel Association, Inc., which
was the owner of the subject property. The settlement agreement called for the
conveyance of property deeds in lieu of foreclosure as well as a cash payment of
$2,000,000 for the settlement of guaranty obligations. The above-listed price
represents an allocation of the total package price rather than a negotiated
value for this single asset. Based on our understanding of the terms of this
transaction, we do not believe that this sale was reflective of the market value
of the individual hotel.
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The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions that has occurred since
the date of this sale. Areawide occupancy and average rate have improved
dramatically in the intervening months, and are forecast to continue this
positive trend. As previously discussed, the market for hotel investments has
also improved significantly because of changes in lender and investor attitudes.
Finally, the property itself has undergone a significant renovation, with
approximately $370,000 spent on upgrading the facilities and amenities. For
these reasons, we are of the opinion that the May, 1994, sale involving the
subject property is not a reliable indicator of the current value of the hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can
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be used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the sale of the subject property, the sales
prices range from approximately $34,100 to $55,100 per room, or roundly
$2,700,000 to $4,400,000 for the 80-unit subject property. The income
capitalization approach indicates a value of $3,700,000, which falls within this
range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1967, and will be approximately 29 years
old as of the date of this appraisal. As a result of renovations that occurred
in 1994 and 1995, the hotel is in relatively good condition. Further renovations
are scheduled to take place later in 1996, when the gatehouse, which houses the
reception and administrative offices, will undergo a refurbishment. The subject
property features interior corridors and an outdoor swimming pool.
We also note that the depressed hotel market conditions that prevailed in the
late 1980s and the early 1990s have also led to a degree of external
obsolescence. In our opinion, it is impossible to identify and quantify the
impact of these factors on the property's value with any accuracy, so we will
only estimate the replacement cost of the subject property.
Replacement Cost Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May, 1996,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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HVS International, Mineola, New York Cost Approach 136
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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HVS International, Mineola, New York Cost Approach 137
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $42,000 80 $3,360,000
FF&E 9,000 80 720,000
Pre-Opening 2,000 80 160,000
Operating Capital 1,800 80 144,000
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Total $54,800 $4,384,000
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the
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HVS International, Mineola, New York Cost Approach 138
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hotel's economic rent, or what is also known as the income attributable to the
land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Howard Johnson Westbury appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 4.0% and 5.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.5% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $1,610,628
Rental Percentage 0.045
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Economic Ground Rent $72,478
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation.
It is important to note that a portion of the subject property's land is subject
to a ground lease. However, lease payments are not calculated as a percentage of
rooms revenue; rather, they are set according to a predetermined
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HVS International, Mineola, New York Cost Approach 139
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schedule. In order to determine the value of the land that would be transferable
upon sale of the subject property, we have determined the economic ground rent
of the entire parcel using the ground lease approach. We then subtracted from
the total estimate of the property's economic ground rent the actual rent of the
leased portion of the subject site, resulting in the total economic ground rent
for the portion of the subject site that is not leased, calculated as follows.
$72,478 - $51,400 = $21,078
We then applied a capitalization rate to this figure to determine the value of
the fee simple portion of the land upon which the subject property is situated.
Based on the risk factors outlined previously and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate yields the following
estimate of land value for the portion of the site that is not leased.
Economic Ground Rent (Less Lease Rental) = $21,078 = $210,783
- ----------------------------------------- ------------
Capitalization Rate 0.10
Estimated Land Value (Say) $211,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 6.0% of the subject
property's total value as indicated by the income capitalization approach and
reflects the applicable overlease.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $4,384,000
Land Value 211,000
--------------
Total Replacement Cost $4,595,000
Total Replacement Cost (Say) $4,600,000
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HVS International, Mineola, New York Cost Approach 140
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Howard Johnson Westbury. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 141
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $3,700,000
Sales Comparison $2,700,000 to $4,400,000
Cost (Replacement Cost) $4,600,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 142
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate a value range of
$34,100 to $55,100 per available room. The income capitalization approach
indicates a per-room value of approximately $46,300. This information suggests
that a slight upward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. In the case of the subject property, the replacement cost is slightly
higher than the value indicated by the income capitalization approach or the
sales comparison approach. This suggests that a slight
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 143
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upwards adjustment to the value indicated by the income capitalization approach
may be warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market value
of the fee simple (subject to an overlease) interest in the Howard Johnson
Westbury - Jericho, as of January 1, 1997, is:
$3,800,000
THREE MILLION EIGHT HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $47,500 per room, which is well supported
by market sales and approximately 2.6% higher than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 144
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A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the Howard Johnson Westbury indicates that the personal property
and fixtures are in fair condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $9,000 per available room. Assuming an average useful
life of ten years and an effective age of six years, the value of the furniture,
fixtures, and equipment currently in place is approximately $3,600 per room, or
a total of $288,000.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(16) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(16) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 145
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 146
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 147
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 148
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15. Certification
1. We, the undersigned appraisers, hereby certify:
2. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
3. that Sean A. Hehir personally inspected the property described in this
report; that Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings but did not personally inspect the
property;
4. that we have no current or contemplated interests in the real estate that
is the subject of this report;
5. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
6. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
7. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
8. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
9. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
<PAGE>
HVS International, Mineola, New York Certification 149
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10. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
11. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
12. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
13. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Sean A. Hehir
-----------------------------------
Sean A. Hehir
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
-----------------------------------
Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
-----------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Subject Property
[GRAPHIC OMITTED]
Lobby
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Standard Guestroom
[GRAPHIC OMITTED]
Guestroom with Jacuzzi
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Corridor
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Typical Bathroom
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Holiday Inn Westbury
[GRAPHIC OMITTED]
Fairfield Inn Syosset
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Quality Inn Westbury
[GRAPHIC OMITTED]
Ramada Limited Woodbury
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Plainview Plaza
<PAGE>
Howard Johnson Lodge - Westbury, NY
WESTBURY
SCHEDULE A
ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING AT
JERICHO, TOWN OF OYSTER BAY, COUNTY 0F NASSAU AND STATE OF NEW YORK, BOUNDED AND
DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER FORMED BY THE INTERSECTION OF THE NORTHERLY SIDE OF
JERICHO TURNPIKE WITH THE SOUTHERLY SIDE 0F SOUTH SERVICE ROAD - LONG ISLAND
EXPRESSWAYS;
RUNNING THENCE WESTERLY ALONG THE NORTHERLY SIDE OF JERICHO TURNPIKE ON THE ARC
OF A CURVE BEARING TO THE RIGHT HAVING A RADIUS OF 738.90 FEET A DISTANCE OF
297.27 FEET;
RUNNING THENCE SOUTH 57 DEGREES 57 MINUTES 43 SECONDS WEST STILL ALONG THE
NORTHERLY SIDE OF JERICHO TURNPIKE 70.03 FEET;
RUNNING THENCE NORTH 32 DEGREES 01 MINUTES 47 SECONDS WEST 302.99 FEET TO THE
SOUTHERLY SIDE OF SOUTH SERVICE ROAD LONG ISLAND EXPRESSWAY;
RUNNING THENCE NORTH 73 DEGREES 53 MINUTES 58 SECONDS EAST ALONG SAID SOUTHERLY
SIDE OF SOUTH SERVICE ROAD - LONG ISLAND EXPRESSWAY 40.56 FEET;
RUNNING THENCE EASTERLY ALONG THE SOUTHERLY SIDE OF SOUTH SERVICE ROAD - LONG
ISLAND EXPRESSWAY ON THE ARC OF A CURVE BEARING TO THE RIGHT HAVING A RADIUS OF
673.38 FEET A DISTANCE OF 373.80 FEET;
RUNNING THENCE SOUTH 68 DEGREES 44 MINUTES 50 SECONDS EAST STILL ALONG THE
SOUTHERLY SIDE OF SOUTH SERVICE ROAD - LONG ISLAND EXPRESSWAY 30.26 FEET TO THE
CORNER, THE POINT OR PLACE OF BEGINNING.
FOR INFORMATION ONLY: SECTION 17 BLOCK 16 LOT 47
<PAGE>
HVS International, Mineola, New York Synopsis of Hotel Management Agreement
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Synopsis of Hotel Management Agreement
Date: May, 1994
Owner: Westbury New York Hotel Limited Partnership
(Ashford Financial Corporation)
Manager: Remington Hotel Company
Premises: Howard Johnson Westbury
Jericho, New York
Term: 15 years
Renewal: Operator option for two successive periods
of five years
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: 1) Upon default by owner or manager
2) Upon death or incapacitation of
Archie Bennett, Jr., President of
Remington Hotel Company
3) Upon sale of property (owner's option)
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HVS International, Mineola, New York Synopsis of Overlease Agreement
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Synopsis of Overlease Agreement
Lessor: Westbury New York Hotel Limited Partnership
Lessee: Jacob Goldfarb and Malka R. Goldfarb
Sublessee: Westbury New York Hotel Limited Partnership
Term: 25 years
Extension Options: First extension option - 15 years
Second extension option - through
November 25, 2014
Rent: $51,400 annually, payable in monthly
installments
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 1
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The Simultaneous Valuation Formula as Used in the Valuation of the Subject
Property
The algebraic equation, known as the Simultaneous Valuation Formula, that solves
for the total property value using a ten-year mortgage equity technique was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the forecasted income before
debt service, leaving the net income to equity for each projection year. The net
income as of the 11th year is capitalized into a reversionary value using the
terminal capitalization rate. The equity residual, which is the total
reversionary value less the mortgage balance at that point in time and less any
broker and legal costs associated with the sale, is discounted to the date of
value at the equity yield rate. The net income to equity for each of the
projection years is also discounted back to the date of value. The sum of these
discounted values equals the value of the equity component. Because the equity
component comprises a specific percentage of the total value, the value of the
mortgage and the total property can be computed easily. This process can be
expressed in two algebraic equations that set forth the mathematic relationships
between the known and unknown variables using the following symbols.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula 2
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to
calculate total property reversion (sales price at the end of the
projection period)
1/S^n = Current worth of $1 factor (discount factor) at the equity yield
rate
Using these symbols, the following formulas can be derived to express some of
the components comprising this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount which equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the amount of the mortgage by
the annual debt service constant (f). The following formula represents debt
service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents net income to equity.
NI - (f x M x V) = d(e)
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HVS International, Mineola, New York Simultaneous Valuation Formula 3
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Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th year's net income before debt service (NI^11) by
the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage equity valuation process. Brokerage and legal
costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of a
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of a loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of a loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
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HVS International, Mineola, New York Simultaneous Valuation Formula 4
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Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity reversionary value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial amount of the mortgage is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each of the projection years is discounted to the present value at the
equity yield rate (1/S^n). The sum of all these cash flows is the value of the
equity (1 - M) V. The following formula represents the calculation of equity as
the sum of the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
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HVS International, Mineola, New York Simultaneous Valuation Formula 5
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Combine Equations: Annual Cash Flow to Equity and Discounting the Cash Flow to
Equity to the Present Value - The last step is to arrive at one overall equation
that shows that the annual cash flow to equity plus the yearly discounting to
the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
readily solved.
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most instances, net
income before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income expressed as a percentage of total revenue will remain
constant, and the dollar amount will escalate at the annual inflation rate.
Hotel investors are currently using inflation rates of approximately 3.5%
annually. The previously presented ten-year forecast of income and expense
illustrates the subject property's net income, which is assumed to increase by
3.5% annually subsequent to the hotel's stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1 Summary of Known Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
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HVS International, Mineola, New York Simultaneous Valuation Formula 6
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The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
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Table 2 Present Worth of $1 Factor at Equity Yield Rate
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Calendar Year Ending: Present Worth of $1 Factor @ 22.0%
-------------------------------------------------------------------
1997 0.819487
1998 0.671559
1999 0.550333
2000 0.450991
2001 0.369581
2002 0.302867
2003 0.248195
2004 0.203393
2005 0.166678
2006 0.136590
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula.
The fraction of the loan paid off during the projection period is calculated as
follows.
P = (0.111856 - 0.095)/(0.155277 - 0.095) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following:
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HVS International, Mineola, New York Simultaneous Valuation Formula 7
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(502,000 - 0.078299 V ) x 0.819672 +
(413,000 - 0.078299 V ) x 0.671862 +
(430,000 - 0.078299 V ) x 0.550707 +
(442,000 - 0.078299 V ) x 0.451399 +
(459,000 - 0.078299 V ) x 0.369999 +
(475,000 - 0.078299 V ) x 0.303278 +
(491,000 - 0.078299 V ) x 0.248589 +
(509,000 - 0.078299 V ) x 0.203761 +
(526,000 - 0.078299 V ) x 0.167017 +
(545,000 - 0.078299 V ) x 0.136899 +
(((564,000/0.110) - (0.03 x (564,000/0.110)) -
((1 - 0.279638) x 0.70 x V)) x 0.136899)= ( 1 - 0.70)V
Combine Like Terms
$2,508,260 - 0.376214 = (1 - 0.70)V
$2,508,260 = 0.67621 V
V = $2,508,260 / 0.67621
V = $3,709,272
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $3,700,000
<PAGE>
HVS International, Mineola, New York Qualifications of Sean A. Hehir
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Sean A. Hehir
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports,
and Investment Counseling)
Summer, 1996 THE HILTON AT SHORT HILLS
Short Hills, New Jersey
1995 to 1996 THE STATLER HOTEL AND JW MARRIOTT
EXECUTIVE EDUCATION CENTER
Ithaca, New York
1993 HOTEL DE CHAILLY
Montreux, Switzerland
1992 HOTEL BAUR AU LAC
Zurich, Switzerland
Education BS - School of Hotel Administration, Cornell University
University of Nevada at Las Vegas
Hotel Institute Montreux, Montreux, Switzerland
Professional Cornell Society of Hotelmen
Affiliations
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
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HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
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HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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INTERNATIONAL
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================================================================================
Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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INTERNATIONAL
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================================================================================
Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
==============================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
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<PAGE>
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<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
RAEFORD-HOKE VILLAGE
234 Cole Avenue
Raeford, Hoke County, North Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
April 30, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS COMPANY, INC.]
May 6, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Raeford-Hoke Village
234 Cole Avenue
Raeford, Hoke County, North Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 30, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 73,530 square
feet of leaseable area. The center was constructed in 1982. The anchor tenants
are Food Lion and Revco.
The subject property is currently 100 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
----------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Raeford is the county seat of Hoke County. The city is located in the eastern
section of North Carolina. The county is bound by Moore County and Hartley
County on the north; by Cumberland County on the east; by Robeson County on the
south; and Scotland County and portions of Moore County on the west. The Fort
Bragg Military Base is located to the north of Raeford and Hoke County. I-95 is
located to the east of Fayetteville, which is approximately 20 miles east of
Raeford. Lumberton is approximately 30 miles to the southeast. Raleigh is
located approximately 75 miles north with Wilmington being 115 miles east. The
unemployment rate for Hoke County as of 1994 (most recent) was 7.2% and North
Carolina had an unemployment rate of 4.2%. The population of Hoke County in 1995
(most recent) was 27,627 and 8.4 percent of the population were over 65 years of
age. The average per capita income was $11,921 in 1993 (most recent).
Neighborhood and Site
The subject neighborhood is located in the western section of Raeford on US
Highway #401 Business. The Hoke County High School is located in the subject
neighborhood on the south side of Harris Avenue. Country Side Apartments are
located across Cole Avenue from the subject property. Other commercial uses
include Burger King, Days Inn, McDonald's, Five Star Entertainment (movies),
Kentucky Fried Chicken, Hardee's, BP convenience market/self-service gasoline
station, Progressive Savings and Loan, ABC Package Store, J's Pizza House,
Advance Auto Parts and Subway. Commercial properties are concentrated on the
major thoroughfare with residential properties being located off of this
thoroughfare. There are a few multi-family properties in the neighborhood. The
business district of Raeford is located approximately one and a half miles to
the east of the subject property. It is typical of most downtown sections with
several municipal buildings. Many of the older buildings have been renovated and
are being used as retail stores in the downtown area.
Physical features are as follows:
1. Size 9.31 acres or 405,544 square feet
2. Identity 234 Cole Avenue
TMS 9424-12-01-119
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 73,530 square feet
2. Layout & Design 1 story-food store, drug store, three shops
3. Parking Spaces 366
4.98 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
1
<PAGE>
Market Position and Marketability Conclusions
The City of Raeford contains two retail centers. In addition to the subject, the
Edinborough Center is located on Harris Avenue at Main Street. It was built in
1973 and contains five stores that have an average rental rate of $4.00. There
is a Family Dollar store located across the street from this center. No new
properties are under construction or planned for this area at this time. Since
there are no other centers in Raeford rentals from the surrounding cities were
used in this market study.
Red Springs is located to the southeast of Raeford. The Red Springs Commons is a
new center and the only center in Red Springs. It contains 40,450 square feet
and is located at the intersection of Highway #211 and McArthur Street. This is
a neighborhood center that contains four stores and first opened in 1996. It
currently operates at 100 percent occupancy. The shops are rented at $8.00 per
square foot.
Fayetteville is approximately 30 miles from subject. Westin Centre is located on
the outskirts of Fayetteville towards Raeford just off of US Highway #211 on
Cliffdale Road. Food Lion and Revco are the anchor tenants in this center that
was built in 1995. It contains 75,000 square feet of space and is currently 100
percent occupied with outlots for lease. Shops are rented at $12.00 per square
foot with $1.00 for CAM.
Lumberton is approximately 30 miles to the southeast of Raeford and centered
around I-95. The Lumber River Village is located in Lumberton and contains
56,500 square feet. It was constructed in 1985 and expanded in 1987. Food Lion
and Revco Drugs are the anchor tenants in this center. Occupancy is currently at
100 percent. The rental range is from $5.40 to $7.00 per square foot.
The subject property is in the middle of the neighborhood being located on US
Highway #401 Business. The location of subject is convenient to the single
family dwellings that are located throughout the neighborhood. US Highway #401
is the major traffic artery running through the area. The Hoke County High
School is located in the subject neighborhood as well as the Army National
Guard.
The Raeford-Hoke Village has three stores with rental rates ranging from $3.00
to $6.50 per square foot. These are thought to be reasonable rental rates for
the neighborhood because this center is located in more heavily traveled area of
Raeford and is newer than the other comparable located in Raeford.
The rental rate for the Food Lion is $6.41 per square foot while the rental rate
for the Revco Drug Store is $6.38 per square foot. Overage rentals are being
received from both of these anchor tenants.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the western section of Raeford. The
neighborhood is continuing to develop and contains several single family
dwellings. Commercial developments are located along the major traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Raeford-Hoke Village Edinborough Center Red Springs Commons Westin Centre
-------------------- -------------------- -------------------- --------------------
b. Street Harris Avenue at Highway #211 at
234 Cole Avenue Main Street McArthur Street 9535 Cliffdale Road
-------------------- -------------------- -------------------- --------------------
c. City Raeford, NC Raeford, NC Red Springs, NC Fayetteville, NC
-------------------- -------------------- -------------------- --------------------
d. Distance from subject N/A 2 miles 12 miles 18 miles
-------------------- -------------------- -------------------- --------------------
e. Contact Deborah Morrow,
Edens Avant, Inc. ARCO Realty Zimmer Development Rob Neill, President
-------------------- -------------------- -------------------- --------------------
f. Phone (803) 779-4420 (910)273-3767 (910) 763-4669 (704) 643-9933
-------------------- -------------------- -------------------- --------------------
2. Attributes
a. Year built 1982 1973 1996 1995
-------------------- -------------------- -------------------- --------------------
b. Net sq. Ft. 73,530 52,600 40,450 75,000
-------------------- -------------------- -------------------- --------------------
c. # building 1 1 1 1
-------------------- -------------------- -------------------- --------------------
d. # stories 1 1 1 1
-------------------- -------------------- -------------------- --------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
-------------------- -------------------- -------------------- --------------------
f. # elevators N/A N/A N/A N/A
-------------------- -------------------- -------------------- --------------------
g. Parking Adequate Adequate Adequate Adequate
-------------------- -------------------- -------------------- --------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
-------------------- -------------------- -------------------- --------------------
I. Vacancy % 0% 0% 0% 0%
-------------------- -------------------- -------------------- --------------------
j. Anchors, if Retail Bo's Supermarket,
Food Lion, Revco Maxway Food Lion, Revco Food Lion, Revco
-------------------- -------------------- -------------------- --------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Lumber River Village
-----------------------
b. Street US Highway #301
at I-95
-----------------------
c. City Lumberton, NC
-----------------------
d. Distance from subject 30 miles
-----------------------
e. Contact Ann Coffman,
Leasing Agent
-----------------------
f. Phone (704) 525-8700
-----------------------
2. Attributes
a. Year built 1985, Expanded 1987
-----------------------
b. Net sq. Ft. 56,500
-----------------------
c. # building 1
-----------------------
d. # stories 1
-----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A
-----------------------
f. # elevators N/A
-----------------------
g. Parking Adequate
-----------------------
h. Construction Type Brick/Concrete Block
-----------------------
I. Vacancy % 0%
-----------------------
j. Anchors, if Retail
Food Lion, Revco
-----------------------
Comments: Comparables #2, #3 and #4 are located outside of subject
neighborhood because there are only two centers in Raeford.
Comparable #1 is older than subject with expansions having been
completed in 1987 to Comparable #4. All of the comparables are
experiencing 100 percent occupancy rates at this time.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
1. Asking Rental Rate
<S> <C> <C> <C> <C>
a. Anchor Space N/A N/A N/A N/A
--------------------- ------------------- ------------------- -------------------
b. Shop Space $3.00 - $6.50 $4.00 - $6.00 $8.00 $12.00
--------------------- ------------------- ------------------- -------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net
--------------------- ------------------- ------------------- -------------------
3. Rent Concessions None None None None
--------------------- ------------------- ------------------- -------------------
4. Effective Rent $3.00 - $6.50 $4.00 - $6.00 $8.00 $12.00
--------------------- ------------------- ------------------- -------------------
5. TI Allowance None None None None
--------------------- ------------------- ------------------- -------------------
6. Expense Stop None None None None
--------------------- ------------------- ------------------- -------------------
7. Length of Lease Term 6 to 10 years (shops) 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
--------------------- ------------------- ------------------- -------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00%
--------------------- ------------------- ------------------- -------------------
9. Percentage Rent Bo's Supermarket,
(per lease terms) Food Lion, Revco Maxway Food Lion, Revco Food Lion, Revco
--------------------- ------------------- ------------------- -------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A
--------------------- ------------------- ------------------- -------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A N/A
--------------------- ------------------- ------------------- -------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Inferior Similar Similar
--------------------- ------------------- ------------------- -------------------
</TABLE>
COMPARABLE 4
------------
1. Asking Rental Rate
a. Anchor Space N/A
----------------------
b. Shop Space $5.40 - $7.00
----------------------
2. Lease Type (Gross/Net) Triple Net
----------------------
3. Rent Concessions None
----------------------
4. Effective Rent $5.40 - $7.00
----------------------
5. TI Allowance None
----------------------
6. Expense Stop None
----------------------
7. Length of Lease Term 3 - 5 years (shops)
----------------------
8. Commissions 5.00% to 7.00%
----------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco
----------------------
10. Historical Annual
Absorption/sq.ft. N/A
----------------------
11. Annual Operating
Expense psf (Including
taxes) N/A
----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) Similar
----------------------
D. EXPLAIN RANKING/COMMENTS: Subject is located in a more heavily traveled and
newer area of Raeford than Comparables #1. Also,
Comparable #1 is older than subject therefore it
is ranked inferior. Comparable #2 is ranked
similar to subject because it is located in a
small town such as subject and even though it is a
newer center, Comparable #2 is smaller than
subject. The rental rates that are being received
are slightly higher than those of subject. The
other shopping centers have been rated as similar
and are thought to be so with subject. Comparables
#2, #3 and #4 also have the same anchor tenants as
subject.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Edinborough Center
Location: Harris Avenue at Main Street
Raeford, NC
Year Built: 1973
Total Size: 52,600 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Rate Range: $4.00 - $6.00 (estimated - leasing agent
declined to reveal rental rates)
Tenant Expenses: Triple Net
Remarks: Bo's Supermarket and Maxway are the major
tenants. Located on Harris Avenue and Main
Street in a less desirable area of Raeford.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Red Springs Commons
Location: Highway #211 at McArthur Street
Red Springs, NC
Year Built: 1996
Total Size: 40,540 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Rate Range: $8.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Food Lion and Revco.
This is the only center in Red Springs and
has recently been constructed. It has
operated at a high occupancy rate.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Westin Centre
Location: 9535 Cliffdale Road
Fayetteville, NC
Year Built: 1995
Total Size: 75,000 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Rate Range: $12.00 plus $1.00 per square foot for CAM
which includes real estate taxes and hazard
insurance.
Tenant Expenses: Triple Net
Remarks: This center was built in 1995. Food Lion and
Revco Drugs are the anchor tenants. This
center has operated at a high occupancy
level since opening.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Lumber River Village
Location: US Highway #301 at I-95
Lumberton, NC
Year Built: 1985, Expanded 1987
Total Size: 56,500 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Rate Range: $5.40 - $7.00
Tenant Expenses: Triple Net
Remarks: This center was expanded in 1987. Food Lion
and Revco are the anchor tenants in the
center. Lumber River Village is located in
close proximity to I-95 which is a heavily
traveled interstate running in a north/south
direction.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
II. SALES COMPARABLES
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Raeford-Hoke Village St. Andrews Crossing Eastage Shopping Center One Norman Center
-------------------- -------------------- ----------------------- -----------------------
b. Street Address NWC Whiskey Rd. & 19706 One Norman
234 Cole Avenue 817 St. Andrews Road Eastgate Dr. Blvd.
-------------------- -------------------- ----------------------- -----------------------
c. City Raeford, NC Columbia, SC Aiken, SC Cornelius, NC
-------------------- -------------------- ----------------------- -----------------------
d. Distance from Subject N/A 150 miles 200 miles 120 miles
-------------------- -------------------- ----------------------- -----------------------
2. Attributes
a. Year Built 1982 1994 1995 1993
-------------------- -------------------- ----------------------- -----------------------
b. Net sq. feet 73,530 66,910 SF 75,716 SF 54,185 SF
-------------------- -------------------- ----------------------- -----------------------
c. # Buildings 1 1 1 1
-------------------- -------------------- ----------------------- -----------------------
d. # of Stories 1 1 1 1
-------------------- -------------------- ----------------------- -----------------------
e. Vacancy % 0% 0% 7.21% 6.98%
-------------------- -------------------- ----------------------- -----------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000 $4,650,000
-------------------- -------------------- ----------------------- -----------------------
b. Sales Price PSF N/A $97.89 $88.16 $85.82
-------------------- -------------------- ----------------------- -----------------------
c. Cap. Rate N/A 9.69% 9.86% 9.68%
-------------------- -------------------- ----------------------- -----------------------
d. Date N/A 05-25-94 09-28-95 10-12-95
-------------------- -------------------- ----------------------- -----------------------
e. NOI at time of Sale N/A $634,797 $782,704 $474,591
-------------------- -------------------- ----------------------- -----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A Superior Similar Similar
-------------------- -------------------- ----------------------- -----------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Paw Creek Commons
-----------------------
b. Street Address E/S Little Rock Road
at Freedom Drive
-----------------------
c. City Charlotte, NC
-----------------------
d. Distance from Subject 110 miles
-----------------------
2. Attributes
a. Year Built 1996
-----------------------
b. Net sq. feet 66,050 SF
-----------------------
c. # Buildings 1
-----------------------
d. # of Stories 1
-----------------------
e. Vacancy % 2.73%
-----------------------
3. Sales Information
a. Sales Price $5,384,000
-----------------------
b. Sales Price PSF $77.52
-----------------------
c. Cap. Rate 9.61%
-----------------------
d. Date 03-25-97
-----------------------
e. NOI at time of Sale $517,412
-----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) Superior
-----------------------
Explain Ranking/Comments: Comparables #1 and #4 are ranked superior to
subject. The reason for this is because of
the location of these comparables being
superior to subject. Also, these comparables
are newer than subject. Comparable # 3 is
located in a commercial area that is
approximately the same size as subject and
is similar. However, Comparable #3 is
smaller than subject.
9
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from $8.00
to $13.00 per square foot. This is a neighborhood
shopping center with stucco and brick exterior that
was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95
percent.
(643)
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,384,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.61%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie and
Revco. Blockbuster occupies a store containing 5,500
square feet at $11.20 per square foot. Rents on shops
range from $13.00 to $14.00 per square foot. Anchor
income is 79.41 percent of gross income.
(793)
13
<PAGE>
ADDENDA
o Hoke County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
USA COUNTIES 1996
Geographic Area: Hoke, NC (37093)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 .......................................................... 27,627
Percent 65 years and over .................................. 8.4
1990 .......................................................... 22,856
1980 .......................................................... 20,383
Occupied housing units, 1990 ..................................... 7,405
Percent owner occupied ......................................... 75.3
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ..................................................... 413
Per 1,000 resident population .................................. 16.5
Percent to mothers under 20 years of age ....................... 24.2
Deaths, 1993 ..................................................... 190
Per 1,000 resident population .................................. 7.6
Infant deaths per 1,000 live births, 1993 ........................ 14.5
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 .................................. 13,267
Percent high school graduates .................................. 55.7
Percent college graduates ...................................... 8.4
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ....................................... 9,770
Percent unemployed ............................................. 7.2
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ....................................... 271
Percent retail trade ........................................... 33.6
Percent services ............................................... 31.0
Paid employees, 1993 (pay period including March 12) ............. 5,309
Annual payroll, 1993 ($1,000) .................................... 92,106
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................. 299,056
Per capita (dollars) ........................................... 11,921
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ............................................ 173
Land in farms as percent of total land ......................... 23
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ...................................... 60,964
Per capita (dollars) ........................................... 2,541
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ................................. 4
Total deposits ($1,000) ........................................ 69,940
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 .................. 3,280
Retired workers ................................................ 1,660
Supplementary Security Income recipients, December 1994 .......... 813
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................. 2,336
1990 (dollars) ................................................. 1,873
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
Comparable Rentals Map
<PAGE>
[GRAPHIC OMITTED]
Comparable Sales Map
<PAGE>
[GRAPHIC OMITTED]
Building Sketch
<PAGE>
Date: 04/08/97 Page 142
EDENS & AVANT, INC.
Retai1 Custom Rent Roll
Property: RAEFORD-HOKE VILLAGE
234 COLE AVENUE
RAEFORD, NC 28376-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
B.C. MOORE & SONS INC.
MOORE'S 678- 10 20,800 10/13/94 10/31/04 3.00 11/01/94 62,400.00
- --------------------------------------------------------------------------------------------------------------------
FOOD LION #127 678- 20 31,880 08/01/95 07/31/15 2.77 02/01/83 88,269.96
3.50 02/10/94 111,669.96
6.41 08/01/95 204,369.96
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
REVCO #4313
REVCO DISCOUNT DRUG CENTERS I 678- 30 8,450 12/01/82 11/30/02 0.00 0.00
5.50 01/01/83 46,474.92
6.38 04/01/95 53,886.24
- --------------------------------------------------------------------------------------------------------------------
SUPER 10 STORE #195
VARIETY WHOLESALERS, INC. 678- 40 6,000 05/01/94 04/30/00 3.00 05/01/91 18,000.00
0.00 0.00
4.25 05/01/94 25,500.00
4.68 05/01/97 28,080.00
- --------------------------------------------------------------------------------------------------------------------
CATO CORPORATION #210
CATO 678- 60 6,400 08/01/94 01/31/00 3.34 11/01/90 21,396.00
0.00 0.00
6.50 12/01/94 41,600.04
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied. ..... 73,530 Current Annual Base Rent 387,756.24
Available ..... 0
Total ......... 73,530
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Beqin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B.C. MOORE & SONS INC. None 0 None 0 None 0 11/01/04 10/31/09 3.30 2.00 2,000,000
MOORE'S
- -----------------------------------------------------------------------------------------------------------------------------------
FOOD LION #127 PRS 1983 None 0 Full 0 08/01/15 07/31/20 6.55 1.00 20,437,000
08/01/20 07/31/25 6.68 1.00 7,735,000
08/01/25 07/31/30 6.82 1.00 0
08/01/30 07/31/35 6.96 1.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
REVCO #4313
REVCO DISCOUNT DRUG CENTERS I PRS 1983 PRS 1988 Full 0 12/01/97 11/30/02 6.37 2.00 1,267,500
12/01/02 11/30/07 6.88 2.00 0
12/01/07 11/30/12 7.32 2.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
SUPER 10 STORE #195
VARIETY WHOLESALERS, INC. PRS 1987 PRS 1987 Full 0 05/01/97 04/30/00 4.68 2.50 960,000
0.00 2.50 0 Y
0.00 2.50 1,020,000 Y
0.00 2.50 1,123,200 Y
- -----------------------------------------------------------------------------------------------------------------------------------
CATO CORPORATION #210 Full 0 Full 0 Full 0 02/01/00 01/31/05 7.00 5.00 1,040,000
CATO 02/01/05 01/31/10 7.50 4.00 0 Y
02/01/10 01/31/15 8.00 4.00 1,040,000 Y
0.00 4.00 0 Y
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
[US Highway #401 Business - Facing North]
[GRAPHIC OMITTED]
[US Highway #401 Business - Facing South]
<PAGE>
[GRAPHIC OMITTED]
[Cole Avenue - Facing West]
[GRAPHIC OMITTED]
[Cole Avenue - Facing Subject]
<PAGE>
[GRAPHIC OMITTED]
[Cole Avenue - In Front of Subject - Facing East]
[GRAPHIC OMITTED]
[Subject - Front View]
<PAGE>
[GRAPHIC OMITTED]
[Subject - Side View]
[GRAPHIC OMITTED]
[Subject - Rear View]
<PAGE>
[GRAPHIC OMITTED]
[Subject - Rear View]
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
Market Study of:
EDGECOMBE SQUARE
SHOPPING CENTER
1102-1110 Western Boulevard
Tarboro, Edgecombe County, North Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
April 28, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS COMPANY, INC.]
May 5, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Edgecombe Square Shopping Center
1102-1110 Western Boulevard
Tarboro, Edgecombe County, North Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 28, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 85,740 square
feet of leaseable area. The center was constructed in 1990 and the anchor
tenants are Food Lion and Revco. Roses vacated a 50,040 square foot store and
Food Lion is negotiating with the owners to expand into the former Roses space
as of the date of this market study. The subject property is currently 41.64
percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
----------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Tarboro is the county seat of Edgecombe County. Being situated on the Tar River,
the city is at the intersection of US Highway #64 and #258 in eastern North
Carolina. From Tarboro, the capital city of Raleigh is approximately 65 miles
southwest and Charlotte is approximately 240 miles to the southwest. The
unemployment rate for Edgecombe County as of 1994 (most recent) was 6.8% and
North Carolina had an unemployment rate of 4.0%. The population of Edgecombe
County in 1995 was 56,371 and 12.8 percent of the population was over 65 years
of age. The average per capita income was $15,432 in 1993 (most recent).
Industry and agricultural play an important role in the Edgecombe County
economy. Retail sales in the county totaled $366 million in 1995. Also, 56
percent of the land in the county is attributed to farming.
Neighborhood and Site
The subject neighborhood is located in the Town of Tarboro near the intersection
of Western Boulevard and Howard Avenue. The Tarboro High School is located at
this intersection. Westgate Nursing Home is located across Western Boulevard
from the subject property. The Parkhill Mall is also located in the
neighborhood. Other commercial uses include Kentucky Fried Chicken, Golden
Corral, Advance Auto Parts, Beverly Health Care Center (in the rear of subject),
Burger King, and an Amoco convenience market/self-service gasoline station.
Commercial properties are concentrated around the intersection of Western
Boulevard and Howard Avenue with residential properties being located off of
these thoroughfares. Subdivisions in the area include Edgecombe Hills,
Barrington Woods, Clifton Ridge, Woodgreen, Speight Forest, Sunset Estates,
Fairview and others. Multi-family projects include Deerridge Apartments,
Edgewood Place, Georgetown Apartments, Hendrix Park and others. The Sprint
Communications Facility is also located in the neighborhood along Western
Boulevard approximately 1/2 a block from the subject property. Several medical
facilities are concentrated around the intersection of Hospital Drive and North
Main Street. Also, a BB&T branch bank is currently under construction as of the
date of this market study. The Edgecombe Community College is located on Wilson
Street to the west of subject property. The business district of Tarboro is
located approximately two miles to the east of the subject property. It is
typical of most downtown sections with several municipal buildings. Many of the
older buildings have been renovated and are being used as retail stores and
restaurants in the downtown area. The Albemarle Retirement Center is also
located in downtown Tarboro at the intersection of Trade Street and Grandville
Street.
Physical features are as follows:
1. Size 9.62 acres or 419,047 square feet
2. Identity 1102-1110 Western Boulevard
TMS 4728-64-6676-00
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
1
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 85,740 square feet
2. Layout & Design 1 story-food store, drug store, two shops
3. Parking Spaces 506
5.90 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
Market Position and Marketability Conclusions
The Tarboro area contains four retail structures. Parkhill Mall measures 213,000
square feet and is located at the intersection of Western Boulevard and Howard
Avenue which is one block north of subject. Renovations to the front of the
building are being made as of the date of this market study. Pic-N-Pay recently
relocated from a small store to a larger store in this center. Also, the
Fairview Shopping Center is located on North Main Street and it contains 60,000
square feet with one vacant store. The Tarboro Shopping Center is located on St.
Andrews Street and contains approximately 120,000 square feet. Food Lion is
expected to expand its store in this center to 32,000 square feet by the spring
of 1997. No new properties are under construction or planned for this area at
this time.
The subject property is in the middle of the neighborhood being around the
intersection of Western Boulevard and Howard Avenue. The location of subject is
convenient to the single family and multi-family dwellings that are located
throughout the neighborhood. Western Boulevard and Howard Avenue are the major
traffic arteries running through the area. The Parkhill Mall is located
approximately 1/2 a block from subject. This center has Belk and K-Mart as the
major tenant and the rental rate for the shops ranges from $3.00 to $7.00 per
square foot. The anchor tenant in the Fairview Shopping Center is Piggly Wiggly.
The rental rate for the shops ranges from $2.00 to $7.00 per square foot. The
major tenants in the Tarboro Shopping Center are Food Lion and Eckerd Drug
Stores. The rental rate for the shops ranges from approximately $2.00 to $7.00
per square foot.
The subject property has two shops with rental rates of $8.00 and $9.66 per
square foot. These are thought to be reasonable rental rates for the
neighborhood because this is a newer center and it is located in a more
desirable area of Tarboro.
The rental rate for the Food Lion is $6.00 per square foot while the rental rate
for the Revco Drug Store is $8.00 per square foot. Overage rentals are being
received from both of these anchor tenants.
The subject property is presently operating at a low occupancy rate since the
Roses store was vacated. However, it is thought that Food Lion will negotiate a
new contract to expand into the former Roses space. The location of subject is
strategic within the neighborhood and convenient to the shoppers throughout the
neighborhood.
Trends
The subject property is located in the eastern section of Tarboro. The
neighborhood is continuing to develop and contains several single family and
multi-family dwellings. Commercial developments are located along the major
traffic arteries. The Tarboro High School and Edgecombe Community College are
located in the neighborhood.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Edgecombe Square Parkhill Mall Fairview SHC Tarboro SHC
---------------------- ------------------------ ------------------------- ----------------------
b. Street 1102-1110 Western St. Andrews St. &
Boulevard Western Boulevard North Main Street Hope Lodge
---------------------- ------------------------ ------------------------- ----------------------
c. City Tarboro, NC Tarboro, NC Tarboro, NC Tarboro, NC
---------------------- ------------------------ ------------------------- ----------------------
d. Distance from subject N/A 1 block 2 miles 2 1/2miles
--------------------- ----------------------- ------------------------ ----------------------
e. Contact Edens Avant, Inc. Jim Bullock, Owner R.M. Fountain, Jr. Tammie Leggett
---------------------- ------------------------ ------------------------- ----------------------
f. Phone (803) 779-4420 (919) 823-6231 (919) 823-2138
---------------------- ------------------------ ------------------------- ----------------------
2. Attributes
a. Year built 1967, Expanded &
Renovated 1989,
1990 1971, Renovated 1989 1945 Currently Expanding
---------------------- ------------------------ ------------------------- ----------------------
b. Net sq. Ft. 85,740 213,000 60,000 120,000
---------------------- ------------------------ ------------------------- ----------------------
c. # building 2 2, Enclosed (T-Shaped) 1 1
---------------------- ------------------------ ------------------------- ----------------------
d. # stories 1 1 1 1
---------------------- ------------------------ ------------------------- ----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
---------------------- ------------------------ ------------------------- ----------------------
f. # elevators N/A N/A N/A N/A
---------------------- ------------------------ ------------------------- ----------------------
g. Parking Adequate Adequate Adequate Adequate
---------------------- ------------------------ ------------------------- ----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
---------------------- ------------------------ ------------------------- ----------------------
I. Vacancy % 58.36% 10% 2.5% 36%
---------------------- ------------------------ ------------------------- ----------------------
j. Anchors, if Retail Food Lion, Revco Belk, K-Mart Piggly Wiggly, Auto Zone Food Lion, Eckerd
---------------------- ------------------------ ------------------------- ----------------------
</TABLE>
Comments: These comparable rentals are located close to subject
neighborhood and are the only shopping centers in Tarboro. All of
these centers are relatively old with renovations having been
completed in 1989 to Comparable #1 and Comparable #3 and current
expansions under way to Comparable #3. Comparable #3 is experiencing
a low occupancy rate at this time.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A N/A
---------------- ------------------ ------------------- ------------------
b. Shop Space $8.00 - $9.66 $3.00 - $7.00 $2.00 - $7.00 $2.00 - $7.00
---------------- ------------------ ------------------- ------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net
---------------- ------------------ ------------------- ------------------
3. Rent Concessions None None None None
---------------- ------------------ ------------------- ------------------
4. Effective Rent $8.00 - $9.66 $3.00 - $7.00 $2.00 - $7.00 $2.00 - $7.00
---------------- ------------------ ------------------- ------------------
5. TI Allowance None None None None
---------------- ------------------ ------------------- ------------------
6. Expense Stop None None None None
---------------- ------------------ ------------------- ------------------
7. Length of Lease Term 3 years (shop) 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
---------------- ------------------ ------------------- ------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00%
---------------- ------------------ ------------------- ------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco Belk, K-Mart Piggly Wiggly, Auto Food Lion, Eckerd
Zone
---------------- ------------------ ------------------- ------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A
---------------- ------------------ ------------------- ------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A N/A
---------------- ------------------ ------------------- ------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Superior Inferior Inferior
---------------- ------------------ ------------------- ------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Subject is the newest shopping center for the
market. Comparable #1 is a significantly larger
center and is an enclosed center with Belk as a
major tenant that is significant with respect to
customer attraction. The rental rates that are
being received are slightly higher than those of
subject. The other shopping centers have been
rated as inferior and are thought to be so with
subject because of age and condition.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Parkhill Mall
Location: Western Boulevard
Tarboro, NC
Year Built: 1971, Renovated in 1989
Total Size: 213,000 SF
Vacant Space: 21,300 SF
Vacancy Rate: 10%
Rental Range: $3.00 - $7.00
Tenant Expenses: Triple Net
Remarks: Belk and K-Mart are the major tenants.
Located on Western Boulevard and Howard Avenue.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Fairview Shopping Center
Location: North Main Street
Tarboro, NC
Year Built: 1945
Total Size: 60,000 SF
Vacant Space: 1,500 SF
Vacancy Rate: 2.5%
Rental Range: $2.00 - $7.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Piggly Wiggly and Auto Zone.
This is an older center but has operated at a
relatively high occupancy rate for the market.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Tarboro Shopping Center
Location: St. Andrews Street and Hope Lodge
Tarboro, NC
Year Built: 1967, Expanded and Renovated in 1989,
Currently under expansion
Total Size: 120,000 SF
Vacant Space: 43,200 SF
Vacancy Rate: 36%
Rental Range: $2.00 - $7.00
Tenant Expenses: Triple Net
Remarks: This center was expanded in 1989 and Food Lion
is in the process of expanding their store to
32,000 square feet. A Pizza Inn restaurant
occupies an outlot.
7
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
1. Identification
<S> <C> <C> <C> <C>
a. Name Edgecombe Square St. Andrews Crossing Eastage Shopping Center One Norman Center
----------------- -------------------- ----------------------- -----------------
b. Street Address 1102-1110 Western NWC Whiskey Rd. & 19706 One Norman
Boulevard 817 St. Andrews Road Eastgate Dr. Blvd.
----------------- -------------------- ----------------------- -----------------
c. City Tarboro, NC Columbia, SC Aiken, SC Cornelius, NC
----------------- -------------------- ----------------------- -----------------
d. Distance from Subject N/A 280 miles 330 miles 220 miles
----------------- -------------------- ----------------------- -----------------
2. Attributes
a. Year Built 1990 1994 1995 1993
----------------- -------------------- ----------------------- -----------------
b. Net sq. feet 85,740 66,910 SF 75,716 SF 54,185 SF
----------------- -------------------- ----------------------- -----------------
c. # Buildings 2 1 1 1
----------------- -------------------- ----------------------- -----------------
d. # of Stories 1 1 1 1
----------------- -------------------- ----------------------- -----------------
e. Vacancy % 58.36% 0% 7.21% 6.98%
----------------- -------------------- ----------------------- -----------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000 $4,650,000
----------------- -------------------- ----------------------- -----------------
b. Sales Price PSF N/A $97.89 $88.16 $85.82
----------------- -------------------- ----------------------- -----------------
c. Cap. Rate N/A 9.69% 9.86% 9.68%
----------------- -------------------- ----------------------- -----------------
d. Date N/A 05-25-94 09-28-95 10-12-95
----------------- -------------------- ----------------------- -----------------
e. NOI at time of Sale N/A $634,797 $782,704 $474,591
----------------- -------------------- ----------------------- -----------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A superior superior similar
----------------- -------------------- ----------------------- -----------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Paw Creek Commons
-----------------------
b. Street Address E/S Little Rock Road
at Freedom Drive
-----------------------
c. City Charlotte, NC
-----------------------
d. Distance from Subject 220 miles
-----------------------
2. Attributes
a. Year Built 1996
-----------------------
b. Net sq. feet 66,050 SF
-----------------------
c. # Buildings 1
-----------------------
d. # of Stories 1
-----------------------
e. Vacancy % 2.73%
-----------------------
3. Sales Information
a. Sales Price $5,120,000
-----------------------
b. Sales Price PSF $77.52
-----------------------
c. Cap. Rate 9.60%
-----------------------
d. Date 03-25-97
-----------------------
e. NOI at time of Sale $517,412
-----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) superior
-----------------------
Explain Ranking/Comments: Comparables #1, #2 and #4 are
ranked superior to subject. The reason for this is
because of the location of these comparables being
superior to subject. Also, Comparables #1, #2 and
#4 are newer than subject. Comparable # 3 is
located in a commercial area that is larger than
subject, but it is similar. Also, Comparable #3 is
smaller than subject.
8
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is
located in a good commercial area with good
accessibility and fair exposure. The
construction is brick veneer and concrete block.
(503)
9
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This
center is located adjacent to the Aiken Mall.
Publix is the major tenant occupying 57,348
square feet (75.7 percent). Most of the local
tenants are on 5 year leases, with rental rates
generally ranging from $8.00 to $13.00 per
square foot. This is a neighborhood shopping
center with stucco and brick exterior that was
constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was
95 percent.
(643)
10
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the
major tenant (42,680 SF). Locals include
Blockbuster Video, El Cancun Restaurant, Papa
John's Pizza, Baskin Robbins. The rent for Bi-Lo
is $8.25 per square foot; local shops range from
$10.50 to $13.00 per square foot. Triple net
lease.
(716)
11
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,120,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.60%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been
adjusted down by 50 basis points since the sales
contract is pre-construction. The major tenants
are Winn Dixie and Revco. Blockbuster occupies a
store containing 5,500 square feet at $11.20 per
square foot. Rents on shops range from $13.00 to
$14.00 per square foot. Anchor income is 79.41
percent of gross income.
(793)
12
<PAGE>
ADDENDA
o Edgecombe County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
13
<PAGE>
[SEAL] DEMOGRAPHICS
<TABLE>
<CAPTION>
Nash
Edgecombe County Edgecombe
County Per Per County Nash County Edgecombe Nash County
City Capita Capita Unemployment Unemployment County Retail Retail Sales
Year Population Income Income Rate Rate Sales
<S> <C> <C> <C> <C> <C> <C> <C>
1986 47,214 $10,448 $12,758 6.8% 5.7% $308,845,000 $ 731,875,
1987 49,171 11,146 13,455 6.4% 5.6% 318,754,000 753,992,
1988 49,551 11,827 14,819 4.9% 4.5% 336,217,000 806,760,
1989 50,346 12,430 15,529 4.5% 4.2% 363,164,000 891,903,
1990 49,438 13,095 16,565 5.1% 4.2% 345,005,000 891,124,
1991 49,952 13,888 16,969 7.4% 6.3% 397,366,000 866,500,
1992 50,734 14,673 17,445 8.0% 7.0% 395,337,000 900,485,
1993 51,266 15,432 18,074 6.7% 5.9% 361,391,000 960,878,
1994 53,808 n/a n/a 6.8% 5.0% 330,362,000 1,036,442
1995 54,800 n/a n/a n/a n/a 366,846,000 1,140,571
</TABLE>
|_| Source: Provided by North Carolina Office of Planning & State Data Center
|_| n/a - not available
<PAGE>
USA COUNTIES 1996
Geographic Area: Edgecombe, NC (37065)
Table: GENERAL PROFILE
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 ................................................................. 56,371
Percent 65 years and over ........................................ 12.8
1990 ................................................................. 56,692
1980 ................................................................. 55,988
Occupied housing units, 1990 ......................................... 20,319
Percent owner occupied ............................................. 61.8
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ......................................................... 936
Per 1,000 resident population ...................................... 16.7
Percent to mothers under 20 years of age ........................... 21.0
Deaths, 1993 ......................................................... 655
Per 1,000 resident population ...................................... 11.7
Infant deaths per 1,000 live births, 1993 ............................ 21.4
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 ...................................... 35,259
Percent high school graduates ...................................... 58.5
Percent college graduates .......................................... 8.1
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ........................................... 27,562
Percent unemployed ................................................. 6.8
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ........................................... 999
Percent retail trade ............................................... 27.0
Percent services ................................................... 32.8
Paid employees, 1993 (pay period including March 12) ................. 21,902
Annual payroll, 1993 ($1,000) ........................................ 479,735
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ................................. 865,189
Per capita (dollars) ............................................... 15,432
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ................................................ 376
Land in farms as percent of total land ............................. 56
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) .......................................... 237,421
Per capita (dollars) ............................................... 4,221
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ..................................... 14
Total deposits ($1,000) ............................................ 228,420
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 ...................... 11,125
Retired workers .................................................... 5,945
Supplementary Security Income recipients, December 1994 .............. 3,041
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ..................................................... 4,089
1990 (dollars) ..................................................... 2,526
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
[Comparable Rental Map]
<PAGE>
[GRAPHIC OMITTED]
[Comparable Sales Map]
<PAGE>
[GRAPHIC OMITTED]
[Building Sketch]
<PAGE>
Date: 04/08/97 Page 109
EDENS & AVANT, INC
Retail (Custom Rent Roll)
Property: EDGECOMBE SQUARE
1102-1110 WESTERN BOULEVARD
TARBORO, NC 27886-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #0838
FOOD LION INC 645- 10 25,000 11/03/90 11/02/15 0.00 0.00
6.00 01/01/91 150,000.00
0.00 0.00
0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------
REVCO #2581
REVCO DISCOUNT DRUG CENTER, I 645- 20 8,450 11/03/90 11/30/00 7.85 01/01/91 66,332.40
8.00 12/01/93 67,599.96
0.00 0.00
0.00 0.00
0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------
LITTLE CAESAR'S PIZZA
ASMG INC. 645- 30 1,250 07/01/95 06/30/98 9.75 01/01/91 12,187.56
8.00 07/01/95 9,999.96
- ---------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP.
SUBWAY REAL ESTATE CORP. 645- 40 1,000 04/01/96 03/31/99 0.00 0.00
9.66 06/01/91 9,660.00
Available 645- 50 50,040 0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied ...... 35,700 Current Annual Base Rent 237,259.92
Available ..... 50,040
Total ......... 85,740
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION $0838
FOOD LION INC Full 0 PRS 1991 Fixed 0 11/03/15 11/02/20 6.00 1.00 0 Y
11/03/20 11/02/20 6.00 1.00 15,000,000 Y
11/03/25 11/02/30 6.00 1.00 0 Y
11/03/30 11/02/35 6.00 1.00 0 Y
- ---------------------------------------------------------------------------------------------------------------------------------
REVCO #2581
REVCO DISCOUNT DRUG
CENTER, I Full 0 PRS 1991 Full 0 12/01/00 11/30/05 8.00 2.00 2,211,083
12/01/05 11/30/10 8.00 2.00 2,253,333
12/01/10 11/30/15 8.00 2.00 0
12/01/15 11/30/20 8.00 2.00 0
12/01/20 11/30/25 8.00 2.00 0
- ---------------------------------------------------------------------------------------------------------------------------------
LITTLE CAESAR'S PIZZA
ASMG INC. Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- ---------------------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP.
SUBWAY REAL ESTATE CORP. Full 0 Full 0 Full 0 04/01/96 03/31/01 0.00 0.00 0
0.00 0.00 0
Available 0 0 0 0.00 0.00 0
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Western Boulevard - Facing Northwest
[GRAPHIC OMITTED]
Western Boulevard - Facing Southeast
<PAGE>
[GRAPHIC OMITTED]
Hunterhill Road - Facing Southeast
[GRAPHIC OMITTED]
Hunterhill Road - Facing Northwest
<PAGE>
[GRAPHIC OMITTED]
Access Road adjacent to Subject - Facing Western Boulevard
[GRAPHIC OMITTED]
Access Road adjacent to Subject - Facing Subject and
Beverly Health Care Center
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject Property
[GRAPHIC OMITTED]
Front View of Subject - Former Roses Store
<PAGE>
[GRAPHIC OMITTED]
Side View of Subject
[GRAPHIC OMITTED]
Rear View of Subject
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
Market Study of:
NORTHSIDE PLAZA
SHOPPING CENTER
1600 North Garnett Street
Henderson, Vance County, North Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
April 28, 1997
<PAGE>
[LOGO]
[LETTERHEAD OF O. MARSHALL DODDS COMPANY, INC.]
May 5, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Northside Plaza Shopping Center
1600 North Garnett Street
Henderson, Vance County, North Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 28, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 66,090 square
feet of leaseable area. The center was constructed in 1981 and remodeled in
1995. The anchor tenants are Food Lion and Revco. The subject property is
currently 92.79 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
----------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Henderson is the county seat of Vance County. The city is at the intersection of
two major railroads in northeastern North Carolina. From Henderson, the capital
city of Raleigh is approximately 45 miles southwest and Durham is approximately
40 miles to the southwest. The unemployment rate for Vance County as of 1996 was
8.1% and North Carolina had an unemployment rate of 4.2%. The population of
Vance County in 1995 (most recent) was 40,720 and 12.7 percent of the population
were over 65 years of age. The average per capita income was $15,726 in 1993
(most recent). Industry and agricultural play an important role in the Vance
County economy. Retail sales in the county totaled $418 million for fiscal year
1995-96. Also, 42 percent of the land in the county is attributed to farming.
Neighborhood and Site
The subject neighborhood is located in Henderson near the intersection of US
Highway #1 Business and Garnett Street. The Henderson Institute Historical
Museum is located in the subject neighborhood. Kings Plaza (Roses) is located
across Garnett Street from the subject property. Other commercial uses include
Burger King, Scottish Inn, Howard Johnson, Quality Inn, Budget Host Inn, PD Quix
(Drive-thru), Winoco convenience market/self-service gasoline station,
NationsBank, and Michael's Barber Shop. Commercial properties are concentrated
on the major thoroughfares with residential properties being located off of
these thoroughfares. There are also multi-family properties in the neighborhood.
The business district of Henderson is located approximately two miles to the
southwest of the subject property. It is typical of most downtown sections with
several municipal buildings. Many of the older buildings have been renovated and
are being used as retail stores in the downtown area.
Physical features are as follows:
1. Size 7.61 acres or 331,492 square feet
2. Identity 1600 North Garnett Street
TMS 44-06-01
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 66,090 square feet
2. Layout & Design 1 story-food store, drug store, eight shops
3. Parking Spaces 350
5.30 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
1
<PAGE>
Market Position and Marketability Conclusions
The Henderson area contains approximately 11 retail structures. Henderson Mall
measures 220,000 square feet and is located at 1200 Dabney Drive. It was built
in 1969, expanded in 1984 and renovated in 1990. This is an enclosed mall with
approximately 30 stores that has an average rental rate of $8.00 - $10.00. Also,
the Henderson Square is a large center in Henderson. It contains 343,257 square
feet is located at the intersection of Run Creek Road, Dabney Drive and I-85.
This is a regional center that is L-shaped with 14 stores that first opened in
1995 and currently operates at 100 occupancy. A new center, Dabney West Shopping
Center, was recently constructed at the intersection of I-85 and Dabney Drive
across from Henderson Marketplace. Winn Dixie is the anchor tenant with
Bojangles and Denny's occupying outlots. In addition to the previously presented
larger malls, this study focuses on the following centers that are closer in
size to the subject. The Dabney Drive Shopping Center is located on US #1
Business at Dabney Drive and contains approximately 41,600 square feet. Food
Lion and Revco are the major tenants in this center which currently has no space
available. The Henderson Marketplace is located on Dabney Drive at Beckford
Drive. Byrd's Supermarket and Revco are the anchor tenants in this center with a
98 percent occupancy rate. It was constructed in 1991 and expanded in 1994.
Also, Vance Square is located in Henderson and contains 38,000 square feet. It
was constructed in 1973 and renovated in 1985. This center appears to have
suffered some occupancy problems recently. Winn Dixie and Revco Drugs vacated
their stores. There is presently 22,700 square feet available in the larger shop
and 7,000 square feet available in the smaller one. Golden Corral also closed
its restaurant on an outlot. Kings Plaza is located on Norlina Road (or Garnett
Street). It contains 86,000 square feet and was constructed in 1970. It was also
expanded in 1986. Roses and Home Bazaar are the only tenants currently occupying
stores in this center. According to the customer service representative at the
Roses store, A&P vacated their store less than a year ago. No new properties are
under construction or planned for this area at this time.
The subject property is in the middle of the neighborhood being around the
intersection of US Highway #1 Business and Garnett Street. The location of
subject is convenient to the single family and multi-family dwellings that are
located throughout the neighborhood. US Highway #1 and Garnett Street are the
major traffic arteries running through the area. The Kings Plaza is located
across Garnett Street from subject.
This center has Roses as the major tenant and the rental rate for the shops is
$5.00 per square foot. The anchor tenant in the Vance Square is Carolina Carpet.
The average rental rate for the shops is $4.00 per square foot. The major
tenants in the Dabney Drive Shopping Center are Food Lion and Revco Drug Stores.
The rental rate for the shops ranges from approximately $5.00 to $8.00 per
square foot. The anchor tenants in the Henderson Marketplace are Byrd's and
Revco Drug Stores. The rental rate for the shops in this center ranges from
$6.00 - $10.00.
The subject property has eight shops with rental rates ranging from $3.75 and
$7.00 per square foot. These are thought to be reasonable rental rates for the
neighborhood because this center is located in less heavily traveled area of
Henderson and this center is relatively older than the other comparables.
The rental rate for the Food Lion is $3.68 per square foot while the rental rate
for the Revco Drug Store is $6.30 per square foot. Overage rentals are being
received from both of these anchor tenants.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the northeastern section of Henderson. The
neighborhood is continuing to develop and contains several single family and
multi-family dwellings. Commercial developments are located along the major
traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Northside Plaza Dabney Drive SHC Henderson Marketplace Vance Square
---------------------- -------------------- --------------------- ---------------------
b. Street US Highway #1 and Dabney Drive at Raleigh and
1600 North Garnett St. Dabney Drive Beckford Drive Old Oxford Rds.
---------------------- -------------------- --------------------- ---------------------
c. City Henderson, NC Henderson, NC Henderson, NC Henderson, NC
---------------------- -------------------- --------------------- ---------------------
d. Distance from subject N/A 2 1/2miles 2 1/2miles 2 miles
---------------------- -------------------- --------------------- ---------------------
e. Contact Mark Pitney, VP Rick Palamar,
Edens Avant, Inc. (Kane Realty) Chase Development Louis Mann, GM
---------------------- -------------------- --------------------- ---------------------
f. Phone (803) 779-4420 (919) 833-7755 (919) 492-8990 (919) 946-7447
---------------------- -------------------- --------------------- ---------------------
2. Attributes
a. Year built 1981, Remodeled 1995 1985 1991, Expanded 1994 1973, Renovated 1985
---------------------- -------------------- --------------------- ---------------------
b. Net sq. Ft. 66,090 41,600 100,000 38,000
---------------------- -------------------- --------------------- ---------------------
c. # building 1, L-Shaped 1 1, Barbell Shaped 1, Rectangular Shaped
---------------------- -------------------- --------------------- ---------------------
d. # stories 1 1 1 1
---------------------- -------------------- --------------------- ---------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
---------------------- -------------------- --------------------- ---------------------
f. # elevators N/A N/A N/A N/A
---------------------- -------------------- --------------------- ---------------------
g. Parking Adequate Adequate Adequate Adequate
---------------------- -------------------- --------------------- ---------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
---------------------- -------------------- --------------------- ---------------------
I. Vacancy % 7.21% 0% 2.0% 76.84%
---------------------- -------------------- --------------------- ---------------------
j. Anchors, if Retail Food Lion, Revco Food Lion, Revco Byrd's, Revco Carolina Carpet
---------------------- -------------------- --------------------- ---------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Kings Plaza
-----------------------
b. Street Norlina Road
(also Garnett Street)
-----------------------
c. City Henderson, NC
-----------------------
d. Distance from subject Across the street
-----------------------
e. Contact Wayne Eisenbaum,
Vice President
-----------------------
f. Phone (860)233-6221
-----------------------
2. Attributes
a. Year built 1970, Expanded 1986
-----------------------
b. Net sq. Ft. 86,000
-----------------------
c. # building 1
-----------------------
d. # stories 1
-----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A
-----------------------
f. # elevators N/A
-----------------------
g. Parking Adequate
-----------------------
h. Construction Type Brick/Concrete Block
-----------------------
I. Vacancy % 30%
-----------------------
j. Anchors, if Retail Roses
-----------------------
Comments: These comparable rentals are located close to subject
neighborhood. Comparables #3 and #4 are older than subject with
renovations having been completed in 1985 to Comparable #3.
Expansions were completed in 1994 to Comparable #2 and 1986 to
Comparable #4. Comparables #3 and #4 are experiencing low occupancy
rate at this time due to vacancies of the anchor tenants.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 COMPARABLE 4
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A N/A N/A
---------------- ------------------- ------------------- ------------------- -------------------
b. Shop Space $3.75 - $7.00 $5.00 - $10.00 $6.00 - $10.00 $4.00 (Average) $5.00 (Average)
---------------- ------------------- ------------------- ------------------- -------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net Triple Net
---------------- ------------------- ------------------- ------------------- -------------------
3. Rent Concessions None None None None None
---------------- ------------------- ------------------- ------------------- -------------------
4. Effective Rent $5.00 - $7.00 $5.00 - $10.00 $6.00 - $10.00 $4.00 $5.00
---------------- ------------------- ------------------- ------------------- -------------------
5. TI Allowance None None None None None
---------------- ------------------- ------------------- ------------------- -------------------
6. Expense Stop None None None None None
---------------- ------------------- ------------------- ------------------- -------------------
7. Length of Lease Term 3 years (shops) 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
---------------- ------------------- ------------------- ------------------- -------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00% 5.00% to 7.00%
---------------- ------------------- ------------------- ------------------- -------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco Food Lion, Revco Byrd's, Revco Carolina Carpet Roses
---------------- ------------------- ------------------- ------------------- -------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A N/A
---------------- ------------------- ------------------- ------------------- -------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A N/A N/A
---------------- ------------------- ------------------- ------------------- -------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Similar Superior Inferior Inferior
---------------- ------------------- ------------------- ------------------- -------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Subject is located in a less heavily traveled area
of Henderson than Comparables #1 and #2.
Comparable #2 is ranked superior to subject
because it is a somewhat larger and newer center.
The rental rates that are being received are
slightly higher than those of subject. The other
shopping centers have been rated as inferior or
similar and are thought to be so with subject.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Dabney Drive Shopping Center
Location: US Highway #1 Business at Dabney Drive
Henderson, NC
Year Built: 1985
Total Size: 41,600 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $5.00 - $10.00
Tenant Expenses: Triple Net
Remarks: Food Lion and Revco are the major tenants.
Located on US Highway #1 Business and Dabney
Drive which are heavily traveled
thoroughfares.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Henderson Marketplace
Location: Dabney Drive at Beckford Drive
Henderson, NC
Year Built: 1991, Expanded in 1994
Total Size: 100,000 SF
Vacant Space: 2,000 SF
Vacancy Rate: 2.0%
Rental Range: $6.00 - $10.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Byrd's and Revco. This is
one of the newest centers in Henderson and
has operated at a high occupancy rate.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Vance Square
Location: Raleigh Road at Oxford Road
Henderson, NC
Year Built: 1973, Renovated 1985
Total Size: 38,000 SF
Vacant Space: 29,200 SF
Vacancy Rate: 76.84%
Average Rental Rate: $4.00
Tenant Expenses: Triple Net
Remarks: This center was renovated in 1985. Winn
Dixie and Revco Drugs have vacated their
stores. Carolina Carpet is currently the
only tenant in the main building of the
center. Tastee Freeze and Pizza Hut occupy
outlots. Golden Corral vacated their
restaurant on one outlot.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Kings Plaza
Location: Norlina Road
Henderson, NC
Year Built: 1970, Expanded 1986
Total Size: 86,000 SF
Vacant Space: 25,792 SF
Vacancy Rate: 30%
Average Rental Rate: $5.00
Tenant Expenses: Triple Net
Remarks: This center was expanded in 1986. A&P
supermarket has vacated its store. Roses is
currently the only tenant in the center.
Kings Plaza is located across the street
from the subject.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLES
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Northside Plaza St. Andrews Crossing Eastage Shopping Center One Norman Center
------------------- -------------------- ----------------------- ------------------
b. Street Address NWC Whiskey Rd. & 19706 One Norman
1600 Garnett Street 817 St. Andrews Road Eastgate Dr. Blvd.
------------------- -------------------- ----------------------- ------------------
c. City Henderson, NC Columbia, SC Aiken, SC Cornelius, NC
------------------- -------------------- ----------------------- ------------------
d. Distance from Subject N/A 250 miles 310 miles 170 miles
------------------- -------------------- ----------------------- ------------------
2. Attributes
a. Year Built 1982 1994 1995 1993
------------------- -------------------- ----------------------- ------------------
b. Net sq. feet 66,090 66,910 SF 75,716 SF 54,185 SF
------------------- -------------------- ----------------------- ------------------
c. # Buildings 1, L-shaped 1 1 1
------------------- -------------------- ----------------------- ------------------
d. # of Stories 1 1 1 1
------------------- -------------------- ----------------------- ------------------
e. Vacancy % 7.21% 0% 7.21% 6.98%
------------------- -------------------- ----------------------- ------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000 $4,650,000
------------------- -------------------- ----------------------- ------------------
b. Sales Price PSF N/A $97.89 $88.16 $85.82
------------------- -------------------- ----------------------- ------------------
c. Cap. Rate N/A 9.69% 9.86% 9.68%
------------------- -------------------- ----------------------- ------------------
d. Date N/A 05-25-94 09-28-95 10-12-95
------------------- -------------------- ----------------------- ------------------
e. NOI at time of Sale N/A $634,797 $782,704 $474,591
------------------- -------------------- ----------------------- ------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A Superior Superior Similar
------------------- -------------------- ----------------------- ------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Paw Creek Commons
--------------------
b. Street Address E/S Little Rock Road
at Freedom Drive
--------------------
c. City Charlotte, NC
--------------------
d. Distance from Subject 170 miles
--------------------
2. Attributes
a. Year Built 1996
--------------------
b. Net sq. feet 66,050 SF
--------------------
c. # Buildings 1
--------------------
d. # of Stories 1
--------------------
e. Vacancy % 2.73%
--------------------
3. Sales Information
a. Sales Price $5,384,000
--------------------
b. Sales Price PSF $77.52
--------------------
c. Cap. Rate 9.61%
--------------------
d. Date 03-25-97
--------------------
e. NOI at time of Sale $517,412
--------------------
4. Rank Relative to Subject
(inferior, similar,
superior) Superior
--------------------
Explain Ranking/Comments: Comparables #1, #2 and #4 are ranked
superior to subject. The reason for this is
because of the location of these comparables
being superior to subject. Also, these
comparables are newer than subject.
Comparable # 3 is located in a commercial
area that is approximately the same size as
subject and is similar. However, Comparable
#3 is smaller than subject.
9
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from $8.00
to $13.00 per square foot. This is a neighborhood
shopping center with stucco and brick exterior that
was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95
percent.
(643)
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,384,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.61%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie and
Revco. Blockbuster occupies a store containing 5,500
square feet at $11.20 per square foot. Rents on shops
range from $13.00 to $14.00 per square foot. Anchor
income is 79.41 percent of gross income.
(793)
13
<PAGE>
ADDENDA
o Vance County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
USA COUNTIES 1996
Geographic Area: Vance, NC (37181)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 ........................................................... 40,720
Percent 65 years and over .................................... 12.7
1990 ........................................................... 38,892
1980 ........................................................... 36,748
Occupied housing units, 1990 ...................................... 14,166
Percent owner occupied ......................................... 65.3
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ..................................................... 687
Per 1,000 resident population .................................. 17.2
Percent to mothers under 20 years of age ....................... 18.9
Deaths, 1993 ..................................................... 458
Per 1,000 resident population .................................. 11.4
Infant deaths per 1,000 live births, 1993 ........................ 4.4
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 .................................. 24,370
Percent high school graduates .................................. 57.1
Percent college graduates ...................................... 9.5
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ....................................... 19,643
Percent unemployed ............................................. 7.8
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ....................................... 885
Percent retail trade ........................................... 32.8
Percent services ............................................... 29.9
Paid employees, 1993 (pay period including March 12) ............. 14,352
Annual payroll, 1993 ($1,000) .................................... 261,231
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................. 629,317
Per capita (dollars) ........................................... 15,726
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ............................................ 289
Land in farms as percent of total land ......................... 42
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ...................................... 322,887
Per capita (dollars) ........................................... 8,127
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ................................. 9
Total deposits ($l,000) ........................................ 296,148
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 .................. 8,075
Retired workers ................................................ 4,395
Supplementary Security Income recipients, December 1994 .......... 2,180
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................. 3,698
1990 (dollars) ................................................. 2,431
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
Comparable Rentals Map
<PAGE>
[GRAPHIC OMITTED]
Comparable Sales Map
<PAGE>
[GRAPHIC OMITTED]
Building Sketch
<PAGE>
Date: 04/08/97 Page 3
EDENS & AVANT, INC.
Retai1 Custom Rent Roll
Property: NORTHSIDE PLAZA - HENDERSON
1600 NORTH GARNETT STREET
HENDERSON, NC 27536-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NORTHSIDE ELECTRONICS
NORMAN HATHCOCK, BILL HISSONG 602-25 0 P 09/01/95 09/30/98 0.00 06/01/93 1,200.00
- --------------------------------------------------------------------------------------------------------------------
NORTHSIDE ELECTRONICS
NORMAN & JOHN HATHCOCK, BILL 602-30 4,800 08/01/92 09/30/98 0.00 0.00
6.00 09/01/92 28,800.00
- --------------------------------------------------------------------------------------------------------------------
FOOD LION #105 602-50 32,320 02/01/94 09/30/01 2.63 09/30/81 85,050.00
3.68 02/10/94 119,001.96
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
REVCO #2546
REVCO DISCOUNT STORE OF NC, I 602-60 8,450 11/01/8l 10/31/01 5.50 11/01/81 46,475.04
0.00 0.00
1.52 02/01/96 12,820.80
4.16 02/09/96 35,184.24
5.75 03/01/96 48,587.52
6.30 11/01/96 53,235.00
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Beqin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NORTHSIDE ELECTRONICS
NORMAN HATHCOCK, BILL HISSONG None 0 None 0 None 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
NORTHSIDE ELECTRONICS
NORMAN & JOHN HATHCOCK, BILL Full 0 Full 0 Full 0 10/01/95 09/30/98 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
FOOD LION #105 PRS 1982 None 0 Full 0 10/01/01 09/30/06 10.51 1.00 8,505.000 Y
10/01/06 09/30/11 10.86 1.00 11,900,200 Y
10/01/11 09/30/16 11.21 1.00 0 Y
10/01/16 09/30/21 11.56 1.00 0 Y
10/01/21 09/30/26 11.92 1.00 0 Y
10/01/26 09/30/31 12.27 1.00 0 Y
10/01/31 09/30/36 12.62 1.00 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
REVCO #2546
REVCO DISCOUNT STORE OF NC, I PRS 1982 PRS 1987 Full 0 11/01/96 10/31/01 6.30 2.00 1,267,500
11/01/01 10/31/06 6.91 2.00 0
11/01/06 10/31/11 7.57 2.00 0
0.00 2.00 0
0.00 2.00 0
0.00 2.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 4
EDENS & AVANT, INC.
Retai1 Custom Rent Roll
Property: NORTHSIDE PLAZA - HENDERSON
1600 NORTH GARNETT STREET
HENDERSON, NC 27536-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHINA GARDEN
SHAO WANG & YUN-YU ZHENG 602-70 2,400 05/01/96 04/30/01 5.25 05/01/96 12,600.00
0.00 0.00
6.00 05/01/99 14,400.00
- --------------------------------------------------------------------------------------------------------------------
SUBWAY #6023
SUBWAY SOUTH INC. 602-80 2,027 04/01/94 03/31/97 0.00 0.00
7.32 04/01/93 14,832.00
7.53 04/01/94 15,263.28
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Available 602-90 3,652 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
BENEFICIAL FINANCE
BENEFICIAL NORTH CAROLINA, IN 602-100 2,135 04/01/86 03/31/01 6.32 04/01/91 13,503.84
0.00 0.00
0.00 0.00
6.32 04/01/96 13,503.84
6.65 04/01/99 14,197.80
- --------------------------------------------------------------------------------------------------------------------
ASSOCIATED SERVICES CORP.
F/K/A ALVEMARLE SERVICES/THE 602-110 1,995 12/01/87 11/30/97 6.00 12/01/90 11,970.00
0.00 0.00
7.00 12/01/93 13,965.00
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Beqin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHINA GARDEN
SHAO WANG & YUN-YU ZHENG Full 0 Full 0 Full 0 05/01/01 04/30/06 7.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
SUBWAY #6023
SUBWAY SOUTH INC. PRS 1988 PRS 1988 Full 0 04/01/94 03/31/97 7.53 0.00 0
04/01/97 03/31/00 0.00 0.00 0
04/01/94 03/31/95 3.76 0.00 0
04/01/95 03/31/96 3.76 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL FINANCE
BENEFICIAL NORTH CAROLINA, IN Full 0 Full 0 Full 0 04/01/91 03/31/96 6.32 0.00 0
04/01/01 03/31/06 7.25 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
ASSOCIATED SERVICES CORP.
F/K/A ALVEMARLE SERVICES/THE PRS 1987 PRS 1987 Full 0 12/01/97 11/30/02 0.00 0.00 0
12/01/02 11/30/07 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 5
EDENS & AVANT, INC.
Retai1 Custom Rent Roll
Property: NORTHSIDE PLAZA - HENDERSON
1600 NORTH GARNETT STREET
HENDERSON, NC 27536-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DOLLAR GENERAL #2250
DOLGENCORP, INC. 602-120 7,200 02/01/96 01/31/99 2.59 03/11/96 18,640.44
3.75 04/01/96 27,000.00
- --------------------------------------------------------------------------------------------------------------------
Available
602-130 1,067 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
PD QUIX
RESTAURANT VENTURES INTERNATI 602-150 0 P 03/01/95 02/28/00 0.00 03/01/90 12,000.00
0.00 03/01/95 14,400.00
0.00 0.00
Available 602-9999 44 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied .... 61,327 Current Annual Base Rent 283,705.80
Available ... 4,763
Total ....... 66,090
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Beqin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DOLLAR GENERAL #2250
DOLGENCORP, INC. Full 0 Full 0 Full 0 02/01/99 01/31/02 4.16 2.50 900,000
0.00 2.50 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
PD QUIX
RESTAURANT VENTURES INTERNATI None 0 None 0 None 0 03/01/95 02/28/00 0.00 2.00 400,000
03/01/00 02/28/05 0.00 2.00 0
03/01/05 02/28/10 0.00 2.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Garrett Street - Facing Northeast
[GRAPHIC OMITTED]
Garrett Street - Facing Southwest
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject
[GRAPHIC OMITTED]
Side View of Subject
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
Market Study of:
RALEIGH BOULEVARD
SHOPPING CENTER
1100 Raleigh Boulevard
Raleigh, Wake County, North Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
April 29, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS COMPANY, INC.]
May 1, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Raleigh Boulevard Shopping Center
1100 Raleigh Boulevard
Raleigh, Wake County, North Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 29, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 72,232 square
feet of leaseable area. The center was constructed in 1990 and the anchor
tenants are Food Lion and Eckerd Drug Store. The subject property is currently
94.46 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds, MAI
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Raleigh is the capital of the state of North Carolina and the county seat of
Wake County. It occupies an area of 93.9 square miles, with the county occupying
an area of 854.36 square miles. The city is located in central North Carolina
within fifteen minutes of the Research Triangle Park, which is the nation's
largest planned research and development park. In addition to Raleigh, Wake
County has eleven other municipalities including Wake Forest, Rolesville,
Garner, Wendell, Apex and Knightdale. Raleigh is located between I-95 and I-85
and approximately 23 miles southeast of Durham, 78 miles southeast of Greensboro
and 143 miles northeast of Charlotte. Major highways serving the area include
I-40, US Highways #1, #401, #64 and #70 and NC Highways #50 and #54. Also, a 31
mile beltline around the city was completed in 1983. The unemployment rate for
Wake County as of July 1994 was 3.5% and North Carolina had an unemployment rate
of 4.5%. The population of Raleigh in 1993 was 230,418 which represented a 53.35
percent increase over the 1980 Census estimate.
Neighborhood and Site
The subject neighborhood is located in the eastern section of the City of
Raleigh near the intersection of Raleigh Boulevard and Crabtree Boulevard. The
neighborhood is continuously growing and there are a number of single family and
multi-family dwellings located throughout the neighborhood. Commercial
properties are located along the major traffic arteries. The Raleigh North
Millbank Court Apartments is located in the neighborhood across Raleigh
Boulevard from the subject. Several single family residential subdivisions are
located in the neighborhood including Heritage Heights, Lions Way and Madonna
Acres. The Mary E. Phillips High School and St. Augustine College are located at
the intersection of Oakwood Avenue and Milburnie Road in the immediate
neighborhood. The downtown area of Raleigh and the state capitol complex are
located to the southwest of the subject neighborhood.
Physical features are as follows:
1. Size 8.72 acres or 379,843 square feet
2. Identity 1100 Raleigh Boulevard
TMS 525-2027
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 72,232 square feet
2. Layout & Design 1 story-food store, drug store, 15 shops
3. Parking Spaces 360
4.98 per 1,000 square of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
1
<PAGE>
Market Position and Marketability Conclusions
The shopping center market within the area of subject is healthy at this time.
Subject is part of eastern Wake County area. In a survey published by the
Triangle Business Journal, there are approximately 20 shopping centers with
approximately 2,162,000 square feet in the same area as subject. The available
square feet for the first quarter of 1997 consists of approximately 168,000
square feet with the availability rate being 7.78%. According to the survey,
there is one center under construction at this time in the same submarket as
subject in the City of Garner which is south of the subject neighborhood. It
will contain approximately 110,000 square feet and is expected to be completed
by February of 1998.
[GRAPHIC OMITTED]
The subject property is in the middle of the neighborhood being at the
intersection of Raleigh Boulevard and Glascock Street. The location of subject
is convenient to the single family and multi-family dwellings that are located
throughout the neighborhood. The Mary E. Phillips High School and St. Augustine
College are located in the subject neighborhood and are thought to have aided in
the overall development of the neighborhood.
The Southgate Plaza is located at the intersection of Cross Link Road and Rock
Quarry Road. This center is very similar to subject with respect to size and
location. It was built in 1985 and the rental rate range for the shops is $6.00
- - $9.00 per square foot on a triple net basis. The anchor tenants are Winn Dixie
and Eckerd Drugs. The Walnut Creek Shopping Center is located at the
intersection of Poole Road and the I-440 Beltline. It was built in 1988 and has
a rental range for the shops of $8.00 - $11.50. Food Lion and Revco Drugs are
the anchor tenants in this center. The Raleigh Oaks Shopping Center is located
on Lake Wheeler Road and contains 60,400 square feet. It was built in 1989 and
has an average rental rate of $9.00 per square foot for the shops. The leasing
agent for this property stated that this rate was somewhat low because this
center is located in a less desirable area of Raleigh. Food Lion and Rite Aid
are the major tenants in this center. At the time of inspection, the Food Lion
store was expanding. The Knightdale Crossing Shopping Center is located at the
intersection of US Highway #64 and Smithfield Road in Knightdale, North Carolina
which is approximately 5 miles east of Raleigh. This center contains 91,825
square feet. Winn Dixie and Revco are the anchor tenants and the rental range
for the shops is from $6.00 to $9.00 per square foot.
The subject property has 15 shops with a rental range from $4.38 - $11.35 per
square foot. The lease with H&R Block expires April 30, 1997 but it is thought
that they will exercise a renewal option until the year 2000. The majority of
the leases have rental rates between $6.00 and $9.00 per square foot. It is
thought that these are reasonable rental rates for the neighborhood. Also, an
Advance Auto Parts store occupies an outlot to the subject property and is also
thought to have a reasonable rental rate for the neighborhood at $9.25 per
square foot.
Food Lion has a rate of $6.10 per square foot and Eckerd Drugs has a rate of
$8.75 per square foot, but overage rents are being paid by both of these
tenants.
The subject property has operated at a high occupancy rate with only 4,000
square feet available at this time for a vacancy rate of 5.54 percent. The
location of subject is strategic within the neighborhood and convenient to
shoppers throughout the neighborhood.
2
<PAGE>
Trends
The subject property is located in the eastern section of Wake County. The
neighborhood is continuing to develop with several single family and
multi-family dwellings and some industrial use. Commercial developments are
located along the major traffic arteries. The Mary Phillips High School and St.
Augustine College are located in the neighborhood.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
1. Identification
<S> <C> <C> <C>
a. Name Raleigh Boulevard SHC Southgate Plaza Walnut Creek SHC
------------------------ ------------------------ -------------------------
b. Street Cross Link Road at Poole Road at I-440
1100 Raleigh Boulevard Rock Quarry Road Beltline
------------------------ ------------------------ -------------------------
c. City Raleigh, NC Raleigh, NC Raleigh, NC
------------------------ ------------------------ -------------------------
d. Distance from subject N/A 3 miles 3 miles
------------------------ ------------------------ -------------------------
e. Contact Edens Avant, Inc. York Properties Rosen & Associates
------------------------ ------------------------ -------------------------
f. Phone (803) 779-4420 (919) 821-1350 (516) 822-5350
------------------------ ------------------------ -------------------------
2. Attributes
a. Year built 1990 1985 1988
------------------------ ------------------------ -------------------------
b. Net sq. Ft. 72,232 70,452 56,470
------------------------ ------------------------ -------------------------
c. # building 1 2, L-shaped 1
------------------------ ------------------------ -------------------------
d. #stories 1 1 1
------------------------ ------------------------ -------------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A
------------------------ ------------------------ -------------------------
f. # elevators N/A N/A N/A
------------------------ ------------------------ -------------------------
g. Parking Adequate Adequate Adequate
------------------------ ------------------------ -------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
------------------------ ------------------------ -------------------------
I. Vacancy % 5.54% 0% 0%
------------------------ ------------------------ -------------------------
j. Anchors, if Retail Food Lion, Eckerds Winn Dixie, Eckerd Food Lion, Revco
------------------------ ------------------------ -------------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
1. Identification
<S> <C> <C>
a. Name Raleigh Oaks SHC Knightdale Crossing
---------------------- -----------------------
b. Street US Highway #64 and
Lake Wheeler Road Smithfield Road
---------------------- -----------------------
c. City Raleigh, NC Knightdale, NC
---------------------- -----------------------
d. Distance from subject 3 miles 10 miles
---------------------- -----------------------
e. Contact Hunter & Associates Drucker & Falk
---------------------- -----------------------
f. Phone (919) 821-8023 (919) 846-7300
---------------------- -----------------------
2. Attributes
a. Year built 1989 1986
---------------------- -----------------------
b. Net sq. Ft. 60,400 91,825
---------------------- -----------------------
c. # building 1 2
---------------------- -----------------------
d. #stories 1 1
---------------------- -----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A
---------------------- -----------------------
f. # elevators N/A N/A
---------------------- -----------------------
g. Parking Adequate Adequate
---------------------- -----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
---------------------- -----------------------
I. Vacancy % 2.15% 1.63%
---------------------- -----------------------
j. Anchors, if Retail Food Lion, Rite Aid Winn Dixie, Revco
---------------------- -----------------------
</TABLE>
Comments: These comparable rentals are located in Raleigh and Knightdale
relatively close to subject neighborhood. All of these centers
were built in the mid to late 80's with expansion taking place
to Comparable #3 at the time of this study. All of the
comparables are experiencing high occupancy rates at this
time.
4
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
<TABLE>
<CAPTION>
B. RENTAL INFORMATION
SUBJECT COMPARABLE 1 COMPARABLE 2
<S> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A
------------------------ ------------------------ ------------------------
b. Shop Space $4.38 - $11.35 $6.00 - $9.00 $8.00 - $11.50
------------------------ ------------------------ ------------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
------------------------ ------------------------ ------------------------
3. Rent Concessions None None None
------------------------ ------------------------ ------------------------
4. Effective Rent $6.00 - $9.00 $6.00 - $9.00 $8.00 - $11.50
------------------------ ------------------------ ------------------------
5. TI Allowance None None None
------------------------ ------------------------ ------------------------
6. Expense Stop None None None
------------------------ ------------------------ ------------------------
7. Length of Lease Term 3 -5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
------------------------ ------------------------ ------------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00%
------------------------ ------------------------ ------------------------
9. Percentage Rent
(per lease terms) Food Lion, Eckerd Winn Dixie, Eckerd Food Lion, Revco
------------------------ ------------------------ ------------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
------------------------ ------------------------ ------------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A
------------------------ ------------------------ ------------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Similar Similar
------------------------ ------------------------ ------------------------
</TABLE>
B. RENTAL INFORMATION
COMPARABLE 3 COMPARABLE 4
1. Asking Rental Rate
a. Anchor Space N/A N/A
------------------------ -----------------------
b. Shop Space $9.00 $6.00 - $9.00
------------------------ -----------------------
2. Lease Type (Gross/Net Triple Net Triple Net
------------------------ -----------------------
3. Rent Concessions None None
------------------------ -----------------------
4. Effective Rent $9.00 $6.00 - $9.00
------------------------ -----------------------
5. TI Allowance $1.78 None
------------------------ -----------------------
6. Expense Stop None None
------------------------ -----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop)
------------------------ -----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
------------------------ -----------------------
9. Percentage Rent
(per lease terms) Food Lion, Rite Aid Winn Dixie, Revco
------------------------ -----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
------------------------ -----------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A
------------------------ -----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) Similar Superior
------------------------ -----------------------
D. EXPLAIN RANKING/COMMENTS: Subject is the one of the newest shopping center in
this submarket. Comparable #4 is a larger center
than subject and is located in Knightdale which is
a suburb of Raleigh. The rental rates that are
being received are in the same range as the
subject. Also, the center is located on US Highway
#64 which is a more heavily traveled thoroughfare.
The other shopping centers have been rated as
similar and are thought to be so with subject.
5
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Southgate Plaza
Location: Cross Link Road at Rock Quarry Road
Raleigh, NC
Year Built: 1985
Total Size: 70,452 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $6.00 - $9.00
Tenant Expenses: Triple Net
Remarks: Winn Dixie and Eckerd Drugs are the major tenants. Located on Cross
Link Road and Rock Quarry Road. Has operated at a high occupancy
level.
6
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Walnut Creek Shopping Center
Location: Poole Road at I-440 Beltline
Raleigh, NC
Year Built: 1988
Total Size: 56,470 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $8.00 - $11.50
Tenant Expenses: Triple Net
Remarks: Major tenants are Food Lion and Revco Drugs.
A McDonald's fast food restaurant occupies
the outlot. This center is also located in
close proximity to the Walnut Creek
Ampitheater and off of a major thoroughfare
(I-440 Beltline).
7
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Raleigh Oaks Shopping Center
Location: Lake Wheeler Road
Raleigh, NC
Year Built: 1989
Total Size: 60,400 SF
Vacant Space: 1,300 SF
Vacancy Rate: 2.15%
Average Rental Rate: $9.00
Tenant Expenses: Triple Net
Remarks: This center is in the process of expansion.
The leasing agent stated that the rental
rates are somewhat low for the city because
the center is located in a less desirable
area.
8
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Knightdale Crossing
Location: US Highway #64 at Smithfield Road
Knightdale, NC
Year Built: 1986
Total Size: 91,825 SF
Vacant Space: Approximately 1,500 SF
Vacancy Rate: 1.63%
Local Rent Range: $6.00 - $9.00
Tenant Expenses: Triple Net
Remarks: This center is located off of a heavily
traveled thoroughfare (US Highway #64). It
is located in a suburb of Raleigh.
9
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
<S> <C> <C> <C>
1. Identification
a. Name Raleigh Boulevard SHC St. Andrews Crossing Eastage Shopping Center
------------------------ ------------------------ --------------------------
b. Street Address NWC Whiskey Rd. &
1100 Raleigh Boulevard 817 St. Andrews Road Eastgate Dr.
------------------------ ------------------------ --------------------------
c. City Raleigh, NC Columbia, SC Aiken, SC
------------------------ ------------------------ --------------------------
d. Distance from Subject N/A 205 miles 261 miles
------------------------ ------------------------ --------------------------
2. Attributes
a. Year Built 1990 1994 1995
------------------------ ------------------------ --------------------------
b. Net sq. feet 72,232 66,910 SF 75,716 SF
------------------------ ------------------------ --------------------------
c. # Buildings 1 1 1
------------------------ ------------------------ --------------------------
d. # of Stories 1 1 1
------------------------ ------------------------ --------------------------
e. Vacancy % 5.54% 0% 7.21%
------------------------ ------------------------ --------------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000
------------------------ ------------------------ --------------------------
b. Sales Price PSF N/A $97.89 $88.16
------------------------ ------------------------ --------------------------
c. Cap. Rate N/A 9.69% 9.86%
------------------------ ------------------------ --------------------------
d. Date N/A 05-25-94 09-28-95
------------------------ ------------------------ --------------------------
e. NOI at time of Sale N/A $634,797 $782,704
------------------------ ------------------------ --------------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A Similar Similar
------------------------ ------------------------ --------------------------
</TABLE>
COMPARABLE 3 COMPARABLE 4
1. Identification
a. Name One Norman Center Paw Creek Commons
----------------------- -----------------------
b. Street Address 19706 One Norman E/S Little Rock Road
Blvd. at Freedom Drive
----------------------- -----------------------
c. City Cornelius, NC Charlotte, NC
----------------------- -----------------------
d. Distance from Subject142 miles 142 miles
----------------------- -----------------------
2. Attributes
a. Year Built 1993 1996
----------------------- -----------------------
b. Net sq. feet 54,185 SF 66,050 SF
----------------------- -----------------------
c. # Buildings 1 1
----------------------- -----------------------
d. # of Stories 1 1
----------------------- -----------------------
e. Vacancy % 6.98% 2.73%
----------------------- -----------------------
3. Sales Information
a. Sales Price $4,650,000 $5,120,000
----------------------- -----------------------
b. Sales Price PSF $85.82 $77.52
----------------------- -----------------------
c. Cap. Rate 9.68% 9.60%
----------------------- -----------------------
d. Date 10-12-95 03-25-97
----------------------- -----------------------
e. NOI at time of Sale $474,591 $517,412
----------------------- -----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) Similar Similar
----------------------- -----------------------
Explain Ranking/Comments: All of these comparables ranked similar to subject and
are relatively the same size as subject. They are,
however, newer than subject.
10
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
11
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from $8.00
to $13.00 per square foot. This is a neighborhood
shopping center with stucco and brick exterior that
was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95
percent.
(643)
12
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
13
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,120,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.60%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie and
Revco. Blockbuster occupies a store containing 5,500
square feet at $11.20 per square foot. Rents on shops
range from $13.00 to $14.00 per square foot. Anchor
income is 79.41 percent of gross income.
(793)
14
<PAGE>
ADDENDA
o Wake County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
15
<PAGE>
USA COUNTIES 1996
Geographic Area: Wake, NC (37183)
Table: GENERAL PROFILE
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 ....................................................... 513,639
Percent 65 years and over .................................. 7.9
1990 ....................................................... 426,301
1980 ....................................................... 301,429
Occupied housing units, 1990 ................................... 165,743
Percent owner occupied ....................................... 60.9
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ................................................... 7,361
Per 1,000 resident population ................................ 15.5
Percent to mothers under 20 years of age ..................... 7.1
Deaths, 1993 ................................................... 2,738
Per 1,000 resident population ................................ 5.7
Infant deaths per 1,000 live births, 1993 ...................... 9.8
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 ................................ 271,387
Percent high school graduates ................................ 85.4
Percent college graduates .................................... 35.3
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ..................................... 288,588
Percent unemployed ........................................... 3.0
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ..................................... 14,957
Percent retail trade ......................................... 22.4
Percent services ............................................. 37.2
Paid employees, 1993 (pay period including March 12)~ .......... 227,468
Annual payroll, 1993 ($1,000) .................................. 5,541,855
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ........................... 11,401,354
Per capita (dollars) ......................................... 23,959
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 .......................................... 833
Land in farms as percent of total land ....................... 22
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) .................................... 4,381,013
Per capita (dollars) ......................................... 9,554
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ............................... 166
Total deposits ($1,000) ...................................... 4,213,104
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 ................ 52,775
Retired workers .............................................. 32,255
Supplementary Security Income recipients, December 1994 ........ 7,456
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ............................................... 4,529
1990 (dollars) ............................................... 3,867
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTAL MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
[GRAPHIC OMITTED]
BUILDING SKETCH
<PAGE>
Date: 04/08/97 Page 143
EDENS & AVANT, INC.
Retail Custom Rent Roll
Property: RALEIGH BOULEVARD
1100 RALEIGH BOULEVARD
RALEIGH, NC 27610
Co1umn Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TSD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H&R BLOCK
H&R BLOCK EASTERN TAX SERVICE 680- 10 1,400 12/01/93 04/30/97 0.00 0.00
0.00 0.00
7.50 12/01/93 10,500.00
- -----------------------------------------------------------------------------------------------------------------
PORTIA'S HAIR SALON
680- 20 1,400 01/01/95 12/31/97 6.30 01/01/93 8,820.00
7.00 01/01/94 9,804.00
7.71 01/01/94 10,800.00
8.53 01/01/96 11,940.00
9.43 01/01/97 13,200.00
- -----------------------------------------------------------------------------------------------------------------
Available
680- 30 4,000 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORE #281
FAMILY DOLLAR STORES OF NC, I 680- 35 8,000 09/01/93 12/31/03 4.38 09/01/93 35,000.04
4.59 01/01/04 36,750.00
4.82 01/01/09 38,587.56
5.06 01/01/14 40,516.92
5.32 01/01/19 42,542.76
- -----------------------------------------------------------------------------------------------------------------
BEAUTY MART
KWANG SUK KIM 680- 40 2,800 12/01/93 11/30/97 0.00 0.00
0.00 0.00
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcent of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk.
- -----------------------------------------------------------------------------------------------------------------------------------
H&R BLOCK
H&R BLOCK EASTERN TAX SERVICE Full 0 Full 0 Full 0 05/01/97 04/30/00 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
PORTIA'S HAIR SALON
Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORE #281
FAMILY DOLLAR STORES OF NC, I PRS 1994 PRS 1994 Full 0 01/01/04 12/31/09 4.59 3.00 1,166,700 Y
01/01/10 12/31/15 4.82 3.00 1,225,000 Y
01/01/16 12/31/20 5.06 3.00 1,286,300 Y
01/01/21 12/31/25 5.32 3.00 1,350,600 Y
0.00 3.00 1,418,100 Y
- -----------------------------------------------------------------------------------------------------------------------------------
BEAUTY MART
KWANG SUK KIM Full 0 Full 0 Full 0 12/01/95 11/30/97 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 144
EDENS & AVANT, INC.
Retail Custom Rent Roll
Property: RALEIGH BOULEVARD
1100 RALEIGH BOULEVARD
RALEIGH, NC 27610
Co1umn Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TSD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BEAUTY MART
KWANG SUK KIM 680- 40 2,800 12/01/93 11/30/97 6.00 12/01/93 16,800.00
7.00 12/01/95 19,599.96
- -----------------------------------------------------------------------------------------------------------------
RENTERS CHOICE, INC. #371
RENTERS CHOICE, INC. 680- 50 3,350 03/01/92 08/31/01 0.00 0.00
0.00 0.00
6.60 09/01/93 22,116.00
7.10 09/01/94 23,784.00
7.60 09/01/95 25,464.00
8.10 09/01/96 27,132.00
8.10 09/01/97 27,135.00
8.50 09/01/98 28,474.92
9.10 09/01/00 30,484.92
- -----------------------------------------------------------------------------------------------------------------
FOOD LION #757
FOOD LION #757 680- 70 25,000 02/25/90 02/24/10 0.00 0.00
6.10 03/01/91 152,499.96
0.00 0.00
0.00 0.00
- -----------------------------------------------------------------------------------------------------------------
SUPER 10 STORE #122
VARIETY WHOLESALERS INC. 680- 80 6,042 04/01/90 02/28/00 5.59 04/01/90 33,800.04
4.48 08/01/93 27,040.08
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcent of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk.
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BEAUTY MART
KWANG SUK KIM Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------
RENTERS CHOICE, INC. #371 Full 0 Full 0 Full 0 09/01/95 08/31/97 7.60 0.00 0
RENTERS CHOICE, INC.
09/01/97 08/31/01 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- --------------------------------------------------------------------------------------------------------------------------------
FOOD LION #757
FOOD LION #757 Full 0 None 0 Fixed 0 03/01/11 02/28/16 6.40 1.00 15,250,000
03/01/16 02/28/21 6.71 1.00 0
03/01/21 02/28/26 7.02 1.00 0
03/01/26 02/28/31 7.32 1.00 0
- --------------------------------------------------------------------------------------------------------------------------------
SUPER 10 STORE #122
VARIETY WHOLESALERS INC. PRS 1989 PRS 1989 Fixed 0 0.00 0.00 0
0.00 0.00 0
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 145
EDENS & AVANT, INC.
Retail Custom Rent Roll
Property: RALEIGH BOULEVARD
1100 RALEIGH BOULEVARD
RALEIGH, NC 27610
Co1umn Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TSD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SUBWAY #13926
SUBWAY REAL ESTATE CORP. 680- 90 1,400 09/01/93 08/31/99 0.00 0.00
7.00 12/01/93 9,800.04
0.00 0.00
7.84 09/01/96 10,980.00
- -----------------------------------------------------------------------------------------------------------------
BOULEVARD GOLD EXCHANGE
DONALD R. SULT 680- 100 1,400 01/01/97 12/31/99 0.00 0.00
0.00 0.00
9.00 01/01/93 12,600.00
9.43 01/01/96 13,200.00
9.50 01/01/97 13,299.96
9.75 01/01/98 13,650.00
- -----------------------------------------------------------------------------------------------------------------
FOXY NAILS
THI QUANG PHAM, NGUYET T. TRA 680- 110 1,400 12/01/96 11/30/99 0.00 0.00
0.00 0.00
9.00 12/01/96 12,600.00
9.50 12/01/97 13,299.96
- -----------------------------------------------------------------------------------------------------------------
LAM'S GARDEN RESTAURANT
LAM'S GARDEN RESTAURANT 680- 120 1,400 11/15/92 12/31/02 3.25 06/01/93 4,548.00
6.50 12/01/93 9,096.00
7.50 01/01/96 10,500.00
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcent of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUBWAY #13926
SUBWAY REAL ESTATE CORP. Full 0 Full 0 Full 0 09/01/96 08/31/99 7.84 0.00 0
09/01/99 08/31/03 9.05 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
BOULEVARD GOLD EXCHANGE
DONALD R. SULT Full 0 Full 0 Full 0 01/01/00 12/31/02 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
FOXY NAILS
THI QUANG PHAM, NGUYET T. TRA Full 0 Full 0 Full 0 12/01/99 11/30/02 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
LAM'S GARDEN RESTAURANT
LAM'S GARDEN RESTAURANT Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 146
EDENS & AVANT, INC.
Retail Custom Rent Roll
Property: RALEIGH BOULEVARD
1100 RALEIGH BOULEVARD
RALEIGH, NC 27610
Co1umn Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TSD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LAM'S GARDEN RESTAURANT
LAM'S GARDEN RESTAURANT 680- 120 1,400 11/15/92 12/31/02 8.00 01/01/99 11,196.00
9.00 01/01/01 12,600.00
- -----------------------------------------------------------------------------------------------------------------
INTERNATIONAL, INC.
RALEIGH CHECK CASHING 680- 130 1,400 05/01/95 04/30/98 9.00 05/01/95 12,600.00
0.00 0.00
- -----------------------------------------------------------------------------------------------------------------
NEW YORK SEAFOOD MARKET
MS. KRISTIE L. BANKS, AN UNMA 680- 140 1,400 01/01/97 12/31/99 7.00 09/01/92 9,804.00
9.00 01/01/94 12,600.00
10.00 01/01/95 14,004.00
10.50 01/01/96 14,700.00
11.25 01/01/97 15,750.00
- -----------------------------------------------------------------------------------------------------------------
ECKERD'S #1055
JACK ECKERD CORP. 680- 150 8,640 06/24/90 01/31/11 0.00 0.00
6.75 07/01/90 58,320.00
7.50 04/01/94 64,800.00
0.00 0.00
8.75 06/01/95 75,600.00
9.00 06/01/00 77,760.00
9.17 06/01/05 79,200.00
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcent of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LAM'S GARDEN RESTAURANT
LAM'S GARDEN RESTAURANT Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL, INC.
RALEIGH CHECK CASHING Full 0 Full 0 Full 0 05/01/98 04/30/01 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
NEW YORK SEAFOOD MARKET
MS. KRISTIE L. BANKS, AN UNMAA Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
ECKERD'S #1055
JACK ECKERD CORP. Full 0 Full 0 Fixed 0 06/24/10 06/23/15 9.75 2.00 0 Y
06/24/15 06/23/20 10.25 2.00 2,916,000 Y
06/24/20 06/23/25 10.75 2.00 3,240,000 Y
06/24/25 06/23/30 11.25 2.00 0 Y
0.00 2.00 3,780,000 Y
0.00 2.00 3,888,000 Y
0.00 2.00 3,960,000 Y
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Date: 04/08/97 Page 147
EDENS & AVANT, INC.
Retail Custom Rent Roll
Property: RALEIGH BOULEVARD
1100 RALEIGH BOULEVARD
RALEIGH, NC 27610
Co1umn Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TSD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MR. FREEZE RECORDS
ELLIOTT MCKINNIE 680- 160 1,000 01/01/95 12/31/97 6.70 02/01/92 6,696.00
7.60 01/01/94 7,596.00
9.00 01/01/95 9,000.00
- -----------------------------------------------------------------------------------------------------------------
SPIN-N-PIN DRYCLEANERS
F/K/A RALEIGH BLVD LAUNDRY & 680- 170 2,200 01/01/97 12/31/01 12.00 08/09/90 26,400.00
0.00 0.00
8.35 11/01/92 18,369.96
9.35 01/01/94 20,569.92
10.35 01/01/95 22,770.00
11.35 01/01/96 24,969.96
12.00 01/01/99 26,400.00
- -----------------------------------------------------------------------------------------------------------------
ADVANCE AUTO #4146
ADVANCE STORES INC. 680- 180 0 P 04/05/96 12/31/05 0.00 05/01/96 64,749.96
0.00 0.00
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcent of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MR. FREEZE RECORDS
ELLIOTT MCKINNIE Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
SPIN-N-PIN DRYCLEANERS
F/K/A RALEIGH BLVD LAUNDRY & Full 0 Full 0 Full 0 01/01/02 08/31/01 0.00 6.00 440,000 Y
0.00 6.00 0 Y
0.00 6.00 306,200 Y
0.00 6.00 342,800 Y
0.00 6.00 379,500 Y
0.00 6.00 416,200 Y
0.00 6.00 440,000 Y
- -----------------------------------------------------------------------------------------------------------------------------------
SPIN-N-PIN DRYCLEANERS
F/K/A RALEIGH BLVD LAUNDRY & Full 0 Full 0 Full 0 01/01/02 08/31/01 0.00 6.00 440,000 Y
ADVANCE AUTO #4146
ADVANCE STORES INC. Full 0 Full 0 None 0 01/01/06 12/31/10 10.17 2.50 2,590,000 Y
01/01/11 12/31/15 11.19 2.50 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Raleigh Boulevard - Facing North
[GRAPHIC OMITTED]
Raleigh Boulevard - Facing South
<PAGE>
[GRAPHIC OMITTED]
Glascock Street - Facing East
[GRAPHIC OMITTED]
Glascock Street - Facing West
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject Property
[GRAPHIC OMITTED]
View of Subject Property from Glascock Street
<PAGE>
[GRAPHIC OMITTED]
View of Shops from Raleigh Boulevard
[GRAPHIC OMITTED]
Side View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject Property
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject Property
[GRAPHIC OMITTED]
View of Advance Auto Part store from Raleigh Boulevard - Outlot
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
BELVEDERE PLAZA
3100 North Main Street
Anderson, Anderson County, South Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 8, 1997
<PAGE>
[Letterhead of O. MARSHALL DODDS CO., INC.]
May 12, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Belvedere Plaza
3100 North Main Street
Anderson, Anderson County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 8, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 158,739 square
feet of leasable area. The center was originally constructed in 1965 with an
addition being built in 1976 and a renovation in 1992. It originally had a food
store, drug store, variety store and shops. At this time, there are not any
strong anchor tenants such as Wal-Mart, Winn- Dixie Stores, Revco or similar
type tenants, but there are a number of small shops and there are two occupants
that are occupying large stores which are Hamrick's and Farmer's Furniture. The
subject property is currently 72.65 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds, MAI
-------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Anderson is situated in the Western portion of South Carolina. I-85 runs through
the county as well as extending into Georgia and extends north through South
Carolina and North Carolina. There are more than 163 manufacturing and allied
firms in Anderson. The principal industries within the county are textile,
clothing, sewing machines, fiberglass, fishing tackle and automobile tires. The
major companies are BASF Corporation, Owens Corning Fiberglass, Bosch
Corporation and Michelin Corporation.
The unemployment rate for Anderson County as of 1994(most recent) was 5.8
percent while the statewide rate was 6.3 percent for that year.
Neighborhood and Site
The neighborhood is located in the northern portion of Anderson on North Main
Street. The downtown area is located to the south and I-85 is located to the
north. This neighborhood has experienced significant growth over the past ten to
fifteen years. Also, their were commercial developments that were constructed in
this neighborhood during the 1960's. The Anderson Mall is located on Main Street
at Mall Road with the major tenants being Sears, JC Penny's and Belk's. Other
developments located in the neighborhood include Pruitt Shopping Center, the
Bi-Lo Shopping Center, the Market Place Shopping Center, the Northtown Plaza
(Wal-Mart Superstore, Sam's Club and shops). The Boulevard Market Fair was
constructed on North Main Street during 1995 with the major tenants being K-Mart
and Publix. There are older developments and also newer developments in the
neighborhood. Some of the properties such as Belvedere Plaza have been renovated
during the past few years.
Physical features are as follows:
1. Size 16.5 acres or 703,494 square feet
2. Identity 3100 North Main Street
TMS #122-13-01-002
3. Shape irregular
4. Topography slopes upward away from North Main Street
towards the rear of the site
5. Accessability good
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 158,739 square feet
2. Layout & Design 1 story-variety store, furniture store,
shops
3. Parking Spaces 914, 5.76 per 1,000 square of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
1
<PAGE>
Market Position and Marketability Conclusions
The subject property is located in the northern portion of the City of Anderson.
This is the shopping area within the city. There are newer shopping centers such
as Northtown Plaza with Sam's Club, Wal-Mart Superstore and shops that was
constructed in 1994 and the Boulevard Market Fair being constructed in 1995
having K-Mart, Publix and shops as the major tenants. The Anderson Mall is
located within the neighborhood as well as the Market Square Shopping Center.
Several other small strip centers are located throughout the immediate
neighborhood as well as Lowe's Home Improvement Center and Rex Appliance Store.
The subject property is located in this neighborhood and was renovated in 1992.
The occupancy rate at this time is 72.65% with most of the vacancies being in
the smaller shops. The rental range for subject property in these small shops
from $3.25 to $10.50 per square foot. The Market Place has Winn-Dixie as the
major tenant and the shops are being rented from $7.00 to $9.50 per square foot.
Mall Parade Center is located on North Main Street at Mall Road. There are not
any major tenants in this center, but the rental rates are ranging from $10.00
to $12.00 per square foot. Mall Corners is located on North Main Street and this
is a strip center without any anchor tenants. The rental rates for the stores
are ranging from $10.00 to $12.00 per square foot. The Crossroad Plaza is
located in the southwestern section of the city with major tenants being
Wal-Mart, Ingles and Revco. The rental rates for the shops in this center range
from $8.00 to $10.50 per square foot.
The subject property has Hamrick's and Farmer's Furniture occupying large stores
with the rents being $3.50 per square foot for Farmer's Furniture and $4.25 for
Hamrick's. The shop space ranges from $3.25 to $10.50 per square foot.
These rental rates are reasonable for subject neighborhood. The current vacancy
rate for subject property is expected to improve. There are no known new
shopping centers planned for the northern portion of the neighborhood.
Trends
The subject property is located in northern portion of the City of Anderson. The
development has been good over the past 30 years with commercial type properties
along North Main Street. Single family dwellings are located off the major
traffic arteries as well as multi-family properties.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Belvedere Plaza Market Place Mall Parade Center
------------------------ -------------------------- -----------------------------
b. Street 3100 North Main St. North Main St. North Main St. at Mall Rd.
------------------------ -------------------------- -----------------------------
c. City Anderson, SC Anderson, SC Anderson, SC
------------------------ -------------------------- -----------------------------
d. Distance from subject N/A 4 Blocks 3 Blocks
------------------------ -------------------------- -----------------------------
e. Contact Edens Avant, Inc. Langsten Real Estate, Inc. Berry Realtors
------------------------ -------------------------- -----------------------------
f. Phone 803-799-4420 864-369-2848 404-255-6994
------------------------ -------------------------- -----------------------------
2. Attributes
a. Year built 1965 (Rehab. 1992) 1975 1988
------------------------ -------------------------- -----------------------------
b. Net sq. Ft. 158,739 60,000 13,347
------------------------ -------------------------- -----------------------------
c. # building 3 1 1
------------------------ -------------------------- -----------------------------
d. #stories 1 1 1
------------------------ -------------------------- -----------------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A
------------------------ -------------------------- -----------------------------
f. # elevators N/A N/A N/A
------------------------ -------------------------- -----------------------------
g. Parking Adequate Adequate Adequate
------------------------ -------------------------- -----------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
------------------------ -------------------------- -----------------------------
i. Vacancy % 27.35% 0% 0%
------------------------ -------------------------- -----------------------------
Hamrick's, Farmer's
j. Anchors, if Retail Furniture, McDonald's Winn-Dixie, Revco N/A
------------------------ -------------------------- -----------------------------
</TABLE>
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Identification Mall Corners Crossroad Plaza
a. Name ---------------------- -----------------------
North Main St. Pearman Dairy Rd.
b. Street ---------------------- -----------------------
Anderson, SC Anderson, SC
c. City ---------------------- -----------------------
2 Blocks 3.5 miles
d. Distance from subject ---------------------- -----------------------
Developers Diversified
e. Contact ---------------------- -----------------------
910-799-9293
f. Phone ---------------------- -----------------------
2. Attributes 1988 1990
a. Year built ---------------------- -----------------------
10,000 163,809
b. Net sq. Ft. ---------------------- -----------------------
1 1
c. # building ---------------------- -----------------------
1 1
d. #stories ---------------------- -----------------------
e. Avg. Floor plate size N/A N/A
(sq. Ft.), if office ---------------------- -----------------------
N/A N/A
f. # elevators ---------------------- -----------------------
Adequate Adequate
g. Parking ---------------------- -----------------------
Brick/Concrete Block Brick/Concrete Block
h. Construction Type ---------------------- -----------------------
0% 4.0%
i. Vacancy % ---------------------- -----------------------
Wal-Mart, Ingles,
N/A Revco
j. Anchors, if Retail ---------------------- -----------------------
Comments:
Comparables # 1, #2 and #3 are located in the immediate neighborhood of subject
while Comparable #4 is located in the southwestern section of the city.
Comparables #1 and #4 are anchored by major tenants whereas Comparables #2 and
#3 are smaller and do not have anchor tenants. These comparables do give an
indication of the rental rates for the neighborhood. Subject property is
generating rental rates somewhat less than these shopping centers, but subject
does not have a strong anchor tenants such as Comparables #1 and #2. Comparables
#2 and #3 are much smaller.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space $3.50 - $4.25 N/A N/A
------------------------ ------------------------ ------------------------
b. Shop Space $3.25 - $10.50 $7.00 - $9.50 $10.00 - $12.00
------------------------ ------------------------ ------------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
------------------------ ------------------------ ------------------------
3. Rent Concessions None None None
------------------------ ------------------------ ------------------------
4. Effective Rent $3.25- $10.50 $7.00 - $9.50 $10.00 - $12.00
------------------------ ------------------------ ------------------------
5. TI Allowance None None None
------------------------ ------------------------ ------------------------
6. Expense Stop None None None
------------------------ ------------------------ ------------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
------------------------ ------------------------ ------------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% to 7.00%
------------------------ ------------------------ ------------------------
9. Percentage Rent
(per lease terms) None None None
------------------------ ------------------------ ------------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
------------------------ ------------------------ ------------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A
------------------------ ------------------------ ------------------------
C. RANK RELATIVE TO
SUBJECT
(inferior,
similar, superior) N/A similar similar
------------------------ ------------------------ ------------------------
</TABLE>
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Asking Rental Rate
a. Anchor Space N/A N/A
---------------------- ----------------------
b. Shop Space $10.00 - $12.00 $8.00 - $10.50
---------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
---------------------- ----------------------
3. Rent Concessions None None
---------------------- ----------------------
4. Effective Rent $10.00 - $12.00 $8.00 - $10.50
---------------------- ----------------------
5. TI Allowance None None
---------------------- ----------------------
6. Expense Stop None None
---------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop)
---------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
---------------------- ----------------------
9. Percentage Rent
(per lease terms) None None
---------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
---------------------- ----------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A
---------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior,
similar, superior) similar similar
---------------------- ----------------------
D. EXPLAIN RANKING/COMMENTS: The comparables that have been used are
considered to be similar to subject. The rental
rates for these comparables are slightly higher
than the rental rates for subject, but the
similarities for the properties does exist.
Subject property is a very large property
containing approximately 158,739 square feet.
The rental rates being achieved at subject
property are slightly lower than these
comparables.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Market Place
Location: N. Main Steet
Anderson, SC
Year Built: 1975
Total Size: 60,000 SF
Vacant Space: None
Vacancy Rate: 0 %
Rental Range: $7.00 to $9.50 per square foot
Tenant Expenses:
Remarks: This center is anchored with Winn-Dixie. Exposure from N. Main Street
is good.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Mall Parade Center
Location: North Main Street at Mall Road
Anderson, South Carolina
Year Built: 1988
Total Size: 13,347 SF
Vacant Space: None
Vacancy Rate: 0 %
Rental Range: $10.00 to $12.00
Tenant Expenses: Triple Net
Remarks: This is a strip center for specialty stores. There are 10 in this
center. Tenants are Subway, NationsCredit, Star Nails, The News,
Unique, First Family Loans, Mail Boxes, Etc., Security Pacific
Financial Services, Nationwide Insurance and American Fast Photo &
Camera.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Mall Corners
Location: North Main Street
Anderson, South Carolina
Year Built: 1988
Total Size: 10,000 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $10.00 - $12.00 PSF
Tenant Expenses: Triple Net
Remarks: This strip center has operated at a high occupancy rate. Tenants are
LensCrafters, Turner's Jewelers, Heavenly Ham and One-Way Eyeglasses.
Heavenly Ham relocated from the Mall Parade Center across the street.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Crossroad Plaza
Location: Pearman Dairy Road
Anderson, South Carolina
Year Built: 1990
Total Size: 163,809 SF
Vacant Space: 6,552 SF
Vacancy Rate: 4.0%
Local Rent Range: $8.00 - $10.50 PSF
Tenant Expenses: Triple Net
Remarks: There are two vacant shops in this center. The major tenants are Wal-
Mart, Ingles and Revco. A local furniture store is having its grand
opening as of the date of this study.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLES
================================================================================
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Belvedere Plaza St. Andrews Crossing Eastgate Shopping Center
------------------------ ------------------------ --------------------------
NWC Whiskey Rd. &
b. Street Address 3100 North Main St. 817 St. Andrews Road Eastgate Dr.
------------------------ ------------------------ --------------------------
c. City Anderson, SC Columbia, SC Aiken, SC
------------------------ ------------------------ --------------------------
d. Distance from Subject N/A 117 miles 97 miles
------------------------ ------------------------ --------------------------
2. Attributes
a. Year Built 1961 (Rehab. 1992) 1994 1995
------------------------ ------------------------ --------------------------
b. Net sq. feet 158,739 SF 66,910 SF 75,716 SF
------------------------ ------------------------ --------------------------
c. # Buildings 3 1 1
------------------------ ------------------------ --------------------------
d. # of Stories 1 1 1
------------------------ ------------------------ --------------------------
e. Vacancy % 27.35% 0% 7.21%
------------------------ ------------------------ --------------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000
------------------------ ------------------------ --------------------------
b. Sales Price PSF N/A $97.89 $88.16
------------------------ ------------------------ --------------------------
c. Date N/A 05-25-94 09-28-95
------------------------ ------------------------ --------------------------
d. NOI at time of Sale N/A $634,797 $782,704
------------------------ ------------------------ --------------------------
e. Cap. Rate N/A 9.69% 9.86%
------------------------ ------------------------ --------------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A superior similar
------------------------ ------------------------ --------------------------
</TABLE>
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Identification
a. Name One Norman Center Paw Creek Commons
-------------------- ----------------------
19706 One Norman E/S Little Rock Road
b. Street Address Blvd. at Freedom Drive
-------------------- ----------------------
c. City Cornelius, NC Charlotte, NC
-------------------- ----------------------
d. Distance from Subject 130 miles 127 miles
-------------------- ----------------------
2. Attributes
a. Year Built 1993 1996
-------------------- ----------------------
b. Net sq. feet 54,185 SF 66,050 SF
-------------------- ----------------------
c. # Buildings 1 1
-------------------- ----------------------
d. # of Stories 1 1
-------------------- ----------------------
e. Vacancy % 6.98% 2.73%
-------------------- ----------------------
3. Sales Information
a. Sales Price $4,650,000 $5,384,000
-------------------- ----------------------
b. Sales Price PSF $85.82 $77.52
-------------------- ----------------------
c. Date 10-12-95 03-25-97
-------------------- ----------------------
d. NOI at time of Sale $474,591 $517,412
-------------------- ----------------------
e. Cap. Rate 9.68% 9.61%
-------------------- ----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) similar superior
-------------------- ----------------------
Explain Ranking/Comments: The comparable sales that have been used with
subject property are centers that have large
stores that were formerly occupied by Wal- Mart.
These centers will be renovated and the Wal-Mart
stores will be divided into smaller stores in the
future. Subject property has two or three large
stores, but there are a number of smaller stores
in subject. It is thought that the sales can be
used to make comparison with subject.
9
<PAGE>
COMPARABLE IMPROVED SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from
$8.00 to $13.00 per square foot. This is a
neighborhood shopping center with stucco and brick
exterior that was constructed in early 1995. Parking
is considered adequate. The occupancy at the time of
sale was 95 percent.
(643)
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,384,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.61%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie
and Revco. Blockbuster occupies a store containing
5,500 square feet at $11.20 per square foot. Rents on
shops range from $13.00 to $14.00 per square foot.
Anchor income is 79.41 percent of gross income.
(793)
13
<PAGE>
ADDENDA
o Anderson County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
USA COUNTIES 1996
Geographic Area: Anderson, SC (45007)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 ........................................................ 154,478
Percent 65 years and over ................................. 13.5
1990 ........................................................ 145,177
1980 ........................................................ 133,235
Occupied housing units, 1990 .................................... 55,481
Percent owner occupied ...................................... 75.2
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ................................................ 1,972
Per 1,000 resident population ............................. 13.1
Percent to mothers under 20 years of age .................. 19.7
Deaths, 1993 ................................................ 1,480
Per 1,000 resident population ............................. 9.8
Infant deaths per 1,000 live births, 1993 ................... 14.7
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 ............................. 95,330
Percent high school graduates ............................. 64.0
Percent college graduates ................................. 12.9
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 .................................. 80,372
Percent unemployed ........................................ 5.8
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 .................................. 3,202
Percent retail trade ...................................... 29.2
Percent services .......................................... 32.1
Paid employees, 1993 (pay period including March 12) ........ 49,199
Annual payroll, 1993 ($1,000) ............................... 968,525
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ........................ 2,495,247
Per capita (dollars) ...................................... 16,545
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ....................................... 1,076
Land in farms as percent of total land .................... 35
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ................................. 1,062,066
Per capita (dollars) ...................................... 7,172
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ............................ 39
Total deposits ($1,000) ................................... 79l,6l0
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 ............. 29,995
Retired workers ........................................... 18,435
Supplementary Security Income recipients, December 1994 ..... 3,177
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ............................................ 2,955
1990 (dollars) ............................................ 2,305
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
SITE PLAN
BELVEDERE PLAZA
[GRAPHIC OMITTED]
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 40
Property: BELVEDERE PLAZA
3100 NORTH MAIN STREET
ANDERSON, SC 29621
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FARMERS FURNITURE WAREHOUSE
WAREHOUSE HOME FURNISHINGS DI 619-40 5,000 02/01/93 01/31/99 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
PIER 1 IMPORTS #427
PIER 1 IMPORTS (U.S.) INC. 619-45 9,094 11/09/94 11/30/04 8.94 12/01/94 80,703.00
9.44 12/01/97 85,186.44
9.94 12/01/00 89,670.00
- -------------------------------------------------------------------------------------------------------------------------
HAMRICK'S INC.
HAMRICK'S INC., A.S.C. CORP. 619-50 40,860 08/16/90 08/31/00 0.00 0.00
4.25 10/01/90 173,655.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
SIMPLY 6
SIMPLY FASHION STORES, LTD. 619-60 6,000 11/01/93 10/31/98 3.25 11/01/93 19,500.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619-65 3,000 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
DIAMONDS-N-GOLD DIRECT
T.W. TOWNSEND/J.W. SITZMAN/M. 619-70 2,000 10/13/94 10/31/97 7.80 12/01/94 15,600.00
- -------------------------------------------------------------------------------------------------------------------------
HOBBYTOWN USA
LAWRENCE S. HENRY 619-80 2,232 06/01/93 05/31/99 0.00 0.00
7.25 07/01/92 16,182.00
7.50 06/01/94 16,740.00
8.00 06/01/95 17,856.00
8.50 06/01/96 18,972.00
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FARMERS FURNITURE WAREHOUSE
WAREHOUSE HOME FURNISHINGS DI Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
PIER 1 IMPORTS #427
PIER 1 IMPORTS (U.S.) INC. Full 0 Full 0 Full 0 12/01/04 11/30/09 10.50 0.00 0
12/01/09 11/30/14 11.00 0.00 0
12/01/14 11/30/19 11.50 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
HAMRICK'S INC.
HAMRICK'S INC., A.S.C. CORP. PRS 1990 None 0 Full 0 09/01/00 08/31/05 0.00 0.00 0
09/01/05 08/31/10 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
SIMPLY 6
SIMPLY FASHION STORES, LTD. PRS 1994 PRS 1994 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
DIAMONDS-N-GOLD DIRECT
T.W. TOWNSEND/J.W. SITZMAN/M. Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
HOBBYTOWN USA
LAWRENCE S. HENRY Full 0 Full 0 Full 0 06/01/96 05/31/99 0.00 0.00 0
06/01/96 05/31/99 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 41
Property: BELVEDERE PLAZA
3100 NORTH MAIN STREET
ANDERSON, SC 29621
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TRANSOUTH FINANCIAL CORP.
ASSOCIATES CORP. OF NORTH AME 619-90 1,800 01/01/95 02/28/00 0.00 0.00
0.00 0.00
8.00 01/01/95 14,400.00
- -------------------------------------------------------------------------------------------------------------------------
BENEFICIAL FINANCE
BENEFICIAL SOUTH CAROLINA, IN 619-100 2,000 04/08/97 04/30/02 8.50 04/01/97 16,999.92
0.00 0.00
9.00 04/01/98 18,000.00
- -------------------------------------------------------------------------------------------------------------------------
BOOK WAREHOUSE OF ANDERSON
EATON & SON BOOK PEDDLERS, IN 619-110 2,200 07/01/96 06/30/99 0.00 0.00
7.50 02/01/93 16,500.00
8.50 07/01/96 18,699.96
- -------------------------------------------------------------------------------------------------------------------------
HOME CURTAIN, BED & BATH
A BUS. OF TEXTILE OUTLET OF A 619-120 4,669 02/01/92 01/31/02 5.00 02/01/92 23,340.00
5.25 02/01/93 24,504.00
5.50 02/01/94 25,680.00
5.75 02/01/95 26,844.00
6.00 02/01/96 28,020.00
6.25 02/01/97 29,181.24
6.50 02/01/98 30,348.48
6.75 02/01/99 31,515.72
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TRANSOUTH FINANCIAL CORP.
ASSOCIATES CORP. OF NORTH AME Full 0 Full 0 Full 0 03/01/00 02/28/05 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL FINANCE
BENEFICIAL SOUTH CAROLINA, IN Full 0 Full 0 Full 0 04/08/02 04/07/07 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BOOK WAREHOUSE OF ANDERSON
EATON & SON BOOK PEDDLERS, IN Full 0 Full 0 Full 0 07/01/99 06/30/02 0.00 5.00 0 Y
0.00 5.00 330,000 Y
0.00 5.00 374,000 Y
- ------------------------------------------------------------------------------------------------------------------------------------
HOME CURTAIN, BED & BATH
A BUS. OF TEXTILE OUTLET OF A Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 42
Property: BELVEDERE PLAZA
3100 NORTH MAIN STREET
ANDERSON, SC 29621
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HOME CURTAIN, BED & BATH
A BUS. OF TEXTILE OUTLET OF A 619-120 4,669 02/01/92 01/31/02 7.00 02/01/00 32,682.96
7.25 02/01/01 33,850.20
- -------------------------------------------------------------------------------------------------------------------------
CLASSIC WINDOW DESIGN, INC.
CLASSIC WINDOW DESIGN, INC. 619-130 750 03/12/97 03/31/00 0.00 0.00
10.50 04/01/97 7,875.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619-140 8,204 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
PIECE GOODS #0300
PIECE GOODS SHOPS CO., L.P. 619-150 7,000 11/01/91 10/31/01 0.00 0.00
5.14 12/01/91 36,000.00
0.00 0.00
5.71 11/01/96 39,999.96
- -------------------------------------------------------------------------------------------------------------------------
Available 619-160 10,319 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
FARMERS FURNITURE
WAREHOUSE HOME FURNISHINGS DI 619-180 17,400 02/01/93 01/31/99 0.00 0.00
3.25 02/01/93 56,550.00
3.50 02/01/96 60,900.00
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HOME CURTAIN, BED & BATH
A BUS. OF TEXTILE OUTLET OF A Full 0 Full 0 Full 0 0.00 0.00 0
Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CLASSIC WINDOW DESIGN, INC.
CLASSIC WINDOW DESIGN, INC. Full 0 Full 0 Full 0 09/15/88 09/14/91 0.00 0.00 0
09/15/91 09/14/94 0.00 0.00 0
04/01/00 03/31/03 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
PIECE GOODS #0300
PIECE GOODS SHOPS CO., L.P. Full 0 Full 0 Full 0 11/01/01 10/31/06 6.43 4.00 650,000
11/01/06 10/31/11 7.29 4.00 750,000
0.00 4.00 850,000
0.00 4.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
FARMERS FURNITURE
WAREHOUSE HOME FURNISHINGS DI Fixed 0 PRS 1991 Fixed 0 02/01/99 01/31/02 3.75 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 43
Property: BELVEDERE PLAZA
3100 NORTH MAIN STREET
ANDERSON, SC 29621
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available 619- 190 7,200 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619- 195 4,516 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
CATHERINES, INC.
CATHERINES STORES CORPORATION 619- 200 2,825 07/01/91 06/30/01 0.00 0.00
0.00 0.00
8.00 07/01/93 22,599.96
8.50 07/01/96 24,012.48
9.00 07/01/98 25,425.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619- 210 4,000 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619- 220 2,320 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619- 230 1,400 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
BELVEDERE LIQUOR STORE
MR. ALVIN T. FLEISHMAN 619- 240 1,470 05/01/95 04/30/98 7.00 06/01/91 10,290.00
7.60 05/01/94 11,178.00
8.00 05/01/95 11,760.00
- -------------------------------------------------------------------------------------------------------------------------
Available 619- 245 2,450 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CATHERINES, INC.
CATHERINES STORES CORPORATION Full 0 Full 0 Full 0 07/01/96 06/30/01 8.50 5.00 500,000
0.00 5.00 600,000
0.00 5.00 0
0.00 5.00 0
0.00 5.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BELVEDERE LIQUOR STORE
MR. ALVIN T. FLEISHMAN Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 44
Property: BELVEDERE PLAZA
3100 NORTH MAIN STREET
ANDERSON, SC 29621
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLEJ'S
OSTROW TEXTILE CO., INC. 619- 250 8,100 06/01/87 05/31/98 0.00 0.00
4.30 06/01/92 34,830.00
4.80 06/01/95 38,880.00
- -------------------------------------------------------------------------------------------------------------------------
MCDONALD'S
MCDONALD'S CORPORATION 619- 260 0 P 02/06/92 02/05/02 0.00 06/01/92 42,420.00
0.00 03/01/97 51,600.00
- -------------------------------------------------------------------------------------------------------------------------
BLIMPIE'S
BLIMPIE, E.S.C., INC. 619- 280 2,000 P 10/01/93 09/30/03 0.00 0.00
0.00 0.00
8.50 10/01/93 17,000.04
9.50 10/01/98 18,999.96
- -------------------------------------------------------------------------------------------------------------------------
BLOCKBUSTER #92566 - BELVEDER
619- 290 0 P 09/01/89 08/31/99 0.00 0.00
0.00 10/01/89 82,880.04
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLEJ'S
OSTROW TEXTILE CO., INC. PRS 1987 None 0 Fixed 0 06/01/92 05/31/95 4.30 2.50 0 Y
06/01/95 05/31/98 4.80 2.50 1,393,200 Y
0.00 2.50 1,555,200 Y
- ------------------------------------------------------------------------------------------------------------------------------------
MCDONALD'S
MCDONALD'S CORPORATION None 0 None 0 None 0 02/06/97 02/05/02 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BLIMPIE'S
BLIMPIE, E.S.C., INC. Full 0 Full 0 Full 0 10/01/03 09/30/08 0.00 6.00 425,000
10/01/08 09/30/13 0.00 6.00 0
0.00 6.00 0
0.00 6.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BLOCKBUSTER #92566 - BELVEDER Full 0 Full 0 Full 0 09/01/94 08/31/99 0.00 0.00 0
09/01/99 08/31/04 14.89 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied 115,330 Current Annual Base Rent 722,618.64
Available 43,409
Total.... 158,739
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
North Main Street - Facing North
[GRAPHIC OMITTED]
North Main Street - Facing South
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject from Outlot
[GRAPHIC OMITTED]
Front View of Subject
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject
[GRAPHIC OMITTED]
Wiew of Former Farmer's Furniture store located to the rear of subject
<PAGE>
[GRAPHIC OMITTED]
Front and Side View of Subject
[GRAPHIC OMITTED]
Rear View of Subject
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject
[GRAPHIC OMITTED]
Rear View of Subject
<PAGE>
Rear View of Subject
[GRAPHIC OMITTED]
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
LAKESIDE SQUARE AND
LAKESIDE PLAZA SHOPPING CENTER
300 and 302 Pearman Dairy Road
Anderson, Anderson County, South Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 8, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS CO., INC.]
May 12, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Lakeside Square and Lakeside Plaza Shopping Center
300 and 302 Pearman Dairy Road
Anderson, Anderson County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 8, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of Lakeside Square which is a neighborhood shopping center
that contains 48,441 square feet of leasable area and Lakeside Plaza with
137,507 square feet. Lakeside Square was constructed in 1975 and 1976 while
Lakeside Plaza was constructed in 1979-1980 with renovations having been
completed in 1991. The anchor tenants at Lakeside Square are Dollar General and
Babcock Home Furnishings Center and this center is currently 33.53% occupied.
The anchor tenants at Lakeside Plaza are Bi-Lo, Big Lots and Revco and this
center is experiencing a 96 percent occupancy rate.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
---------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
[LOGO]
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Anderson is situated in the Western portion of South Carolina. I-85 runs through
the county as well as extending into Georgia and extends north through South
Carolina and North Carolina. There are more than 163 manufacturing and allied
firms in Anderson. The principal industries within the county are textile,
clothing, sewing machines, fiberglass, fishing tackle and automobile tires. The
major companies are BASF Corporation, Owens Corning Fiberglass, Bosch
Corporation and Michelin Corporation.
The unemployment rate for Anderson County as of 1994 (most recent) was 5.8
percent while the statewide rate was 6.3 percent for that year.
Neighborhood and Site
The neighborhood is located to the west of the downtown area of Anderson and is
around the intersection of Pearman Dairy Road and West Whitner Street. The
makeup of the neighborhood consists of commercial type properties along the
major traffic arteries and single family residential properties off of the major
traffic arteries. There are several multi-family projects that are located
throughout the neighborhood. The Lakeside Square Shopping Center is located
adjacent to the Lakeside Plaza Shopping Center. The major tenants in the
Lakeside Plaza Shopping Center are Bi-Lo Stores, Revco Drugs, Family Dollar
Stores, and local tenants. The former Wal-Mart Store now has Big Lots occupying
approximately 1/2 of the store with the remainder being vacant.
Physical features for Lakeside Square Shopping Center are as follows:
1. Size 5.19 acres or 183,605 SF
2. Identity 300 Pearman Dairy Road
TMS# 123-05-03-002
3. Shape Irregular
4. Topography Slopes downward away from Pearman Dairy Road,
but is level from the mid portion to the rear
5. Accessibility Good
6. Utilities Municipal
Physical Description
Building features for the Lakeside Square Shopping Center are as follows:
1. Size (net) 48,441 SF
2. Layout & Design One story - vacant food store, variety store,
furniture store, Radio Shack, and three
vacant shops
3. Parking Spaces 198
4.09 per 1,000 SF of net area
4. Construction Brick and glass front with concrete block on
side and rear and metal seam roof.
1
<PAGE>
[LOGO]
Physical features for Lakeside Plaza Shopping Center are as follows:
1. Size 12.26 acres or 534,046 SF
2. Identity 300 Pearman Dairy Road
TMS# 123-05-03-007
3. Shape Irregular
4. Topography Slopes downward away from Pearman Dairy Road
5. Accessibility Good
6. Utilities Municipal
Physical Description
Building features for the Lakeside Plaza Shopping Center are as follows:
1. Size (net) 137,507 SF
2. Layout & Design One story - food store, variety store, drug
store and four vacant shops
3. Parking Spaces 682
4.96 per 1,000 SF of net area
4. Construction Brick and glass front with concrete block on
side and rear and metal seam roof.
Market Position and Marketability Conclusions
The subject property is located in the western section of Anderson along Pearman
Dairy Road at the intersection with Whitner Street. Most of the growth or retail
facilities is located in the northern portion of Anderson along North Main
Street which is US Highway #76-178. The centers in this area include the
Anderson Mall, Belvedere Shopping Center, Pruitt Shopping Center, Marketplace
Shopping Center and Northtown Plaza. The Boulevard Market Fair Shopping Center
was constructed on North Main Street during 1995 with the major tenants being
K-Mart and Publix Supermarket. The Northtown Shopping Center has Wal-Mart and
Sam's Wholesale Club as major tenants with approximately 30,000 square feet of
shops.
Subject property is an older shopping center, but the Crossroads Shopping Center
is located in subject neighborhood and was constructed in 1990. The major
tenants are Wal-Mart, Ingles and Revco. The shop space is being rented for $8.00
to $10.50 per square foot. The Belvedere Plaza is located on North Main Street
in the northern portion of Anderson. This shopping center was renovated in 1992.
The anchors are Hamrick's, Farmer's Furniture and McDonald's. The rental rates
for the shops range from $3.25 to $10.50 per square foot. The Marketplace is
located on North Main Street in the northern portion of Anderson. This center
was constructed in 1975 and contains 60,000 square feet. The rental rates for
the shops range from $7.50 to $9.50 per square foot. The Watson Village is
located on South Main Street and would be considered to be in subject
neighborhood. This center was constructed in 1968 and contains 60,000 square
feet. The major tenants are Alrenco and Heileg-Meyers furniture store. The
rental rates for the shops range from $5.00 to $8.00 per square foot.
2
<PAGE>
[LOGO]
Subject property is an old center and Wal-Mart was a former tenant in this
center, but has moved out and is located in the Crossroads Plaza and a Wal-Mart
Superstore was constructed in the Northtown Plaza. Portions of the Wal-Mart
Store have been subleased to Big Lots. There is a Bi-Lo store in subject. The
section of subject that fronts along Pearman Dairy Road has a high vacancy rate
at this time as Winn-Dixie has vacated the store and the lease has expired.
The rental rates been achieved at Lakeside Square range from $3.00 to $3.39 per
square foot. There are vacancies, but it is thought that these can be occupied
by other tenants in the future.
The rental rates for the shops in the Lakeside Plaza range from $3.62 to $10.40
per square foot. The rental rate being received from Bi-Lo is $5.86. Revco is
currently paying $4.00 per square foot and Big Lots is paying $2.75 for a
portion of the Wal-Mart space.
Trends
The subject property is located in an older stabilized area. The growth for new
retail space is occurring on the north side of Anderson. It is thought that the
stability for subject neighborhood will be maintained and that the vacant space
in subject property can be rented, but it will not be to the tenants that can
pay high rental rates. These rental rates should remain about the same.
3
<PAGE>
[LOGO]
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A. PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
Lakeside Square &
a. Name Lakeside Plaza SHC Crossroad Plaza Belvedere Plaza
-------------------------- ------------------------ ------------------------
300 & 302 Hwy. 28 Bypass at
b. Street Pearman Dairy Rd. Sayre St. 3100 North Main St.
-------------------------- ------------------------ ------------------------
c. City Anderson, SC Anderson, SC Anderson, SC
-------------------------- ------------------------ ------------------------
d. Distance from subject N/A 2 miles 3 miles
-------------------------- ------------------------ ------------------------
e. Contact Edens Avant, Inc. Developers Diversified Edens Avant, Inc.
-------------------------- ------------------------ ------------------------
f. Phone 803-779-4420 910-799-9293 803-799-4420
-------------------------- ------------------------ ------------------------
2. Attributes
Lakeside Square-1975
a. Year built Lakeside Plaza-1979 1990 1961 (Rehab. 1992)
-------------------------- ------------------------ ------------------------
Lakeside Square-48,441
b. Net sq. Ft. Lakeside Plaza-137,507 163,809 158,739
-------------------------- ------------------------ ------------------------
c. # building 2 1 3
-------------------------- ------------------------ ------------------------
d. #stories 1 1 1
-------------------------- ------------------------ ------------------------
e. Avg. Floor plate size (SF),
if office N/A N/A N/A
-------------------------- ------------------------ ------------------------
f. # elevators N/A N/A N/A
-------------------------- ------------------------ ------------------------
g. Parking Adequate Adequate Adequate
-------------------------- ------------------------ ------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
-------------------------- ------------------------ ------------------------
i. Vacancy % Lakeside Square-66.47%
Lakeside Plaza-4.0% 4.00% 27.35%
-------------------------- ------------------------ ------------------------
j. Anchors, if Retail Lakeside Square-Babcock
Lakeside Plaza-Bi-Lo, Wal-Mart, Ingles, Hamrick's, Farmer's
Big Lots, Revco Revco Furniture, McDonald's
-------------------------- ------------------------ ------------------------
</TABLE>
<TABLE>
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Market Place Watson Village
------------------------- -----------------------
b. Street North Main St. South Main Street
------------------------- -----------------------
c. City Anderson, SC Anderson, SC
------------------------- -----------------------
d. Distance from subject 3.5 miles 3 miles
------------------------- -----------------------
e. Contact Langsten Real Estate Dr. Charles W. Burt
------------------------- -----------------------
f. Phone 864-369-2848 864-225-3176
------------------------- -----------------------
2. Attributes
a. Year built 1975 1968
------------------------- -----------------------
b. Net sq. Ft. 60,000 60,000
------------------------- -----------------------
c. # building 1 1
------------------------- -----------------------
d. #stories 1 1
------------------------- -----------------------
e. Avg. Floor plate size (SF),
if office N/A N/A
------------------------- -----------------------
f. # elevators N/A N/A
------------------------- -----------------------
g. Parking Adequate N/A
------------------------- -----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
------------------------- -----------------------
i. Vacancy %
0% 6.21%
------------------------- -----------------------
j. Anchors, if Retail
Alrenco, Heileg-
Winn-Dixie, Revco Meyers
------------------------- -----------------------
</TABLE>
Comments: Comparables #2 and #3 are located to the north of subject with
Comparables #1 and #4 being located to the south of subject. Comparable #1 is
the newest center surveyed.
4
<PAGE>
[LOGO]
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Asking Rental Rate
Lakeside Square-$3.39
a. Anchor Space Plaza - $2.75-$5.86 N/A $3.50 - $4.25
------------------------- ------------------------- ------------------------
Lakeside Square - $3.00
b. Shop Space Plaza - $3.62-$10.40 $8.00 - $10.50 $3.25 - $10.50
------------------------- ------------------------- ------------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
------------------------- ------------------------- ------------------------
3. Rent Concessions None None None
------------------------- ------------------------- ------------------------
4. Effective Rent $3.00 - $10.40 $8.00 - $10.50 $3.25 - $10.50
------------------------- ------------------------- ------------------------
5. TI Allowance None None None
------------------------- ------------------------- ------------------------
6. Expense Stop None None None
------------------------- ------------------------- ------------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
------------------------- ------------------------- ------------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% - 7.00%
------------------------- ------------------------- ------------------------
9. Percentage Rent Wal-Mart, Ingles, Hamricks, Farmer's
(per lease terms) Big Lots, Bi-Lo Revco Furniture, McDonalds
------------------------- ------------------------- ------------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
------------------------- ------------------------- ------------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A N/A
------------------------- ------------------------- ------------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) N/A superior similar
------------------------- ------------------------- ------------------------
</TABLE>
<TABLE>
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A
----------------------- -----------------------
b. Shop Space $7.50 - $9.50 $5.00 - $8.00
----------------------- -----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
----------------------- -----------------------
3. Rent Concessions None None
----------------------- -----------------------
4. Effective Rent $7.50 - $9.50 $5.00 - $8.00
----------------------- -----------------------
5. TI Allowance None None
----------------------- -----------------------
6. Expense Stop None None
----------------------- -----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop)
----------------------- -----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
----------------------- -----------------------
9. Percentage Rent
(per lease terms) Winn-Dixie, Revco Alrenco
----------------------- -----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
----------------------- -----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
----------------------- -----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) similar similar
----------------------- -----------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Comparable #1 is thought to be superior
to subject due to age and condition.
Also, Wal-Mart is thought to be a high
credit tenant. Comparables #2 and #4
have also lost major tenants which is
the primary reason they are considered
similar to subject.
5
<PAGE>
[LOGO]
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Crossroad Plaza
Location: Pearman Dairy Road
Anderson, South Carolina
Year Built: 1990
Total Size: 163,809 SF
Vacant Space: 6,552 SF
Vacancy Rate: 4.0%
Local Rent Range: $8.00 - $10.50 PSF
Tenant Expenses: Triple Net
Remarks: There are two vacant shops in this center. The major
tenants are Wal-Mart, Ingles and Revco. A local
furniture store is having its grand opening as of the
date of this study.
6
<PAGE>
[LOGO]
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Belvedere Plaza
Location: 3100 N. Main Street
Anderson, South Carolina
Year Built: 1961 - Renovated in 1992
Total Size: 158,739 SF
Vacant Space: 4,342 SF
Vacancy Rate: 27.35%
Rental Range: $3.25 to $10.50 PSF
Tenant Expenses: Triple Net
Remarks: This is an older center but was renovated in 1992. The
center has a good appearance and is enjoying a high
occupancy rate.
7
<PAGE>
[LOGO]
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Market Place
Location: N. Main Street
Anderson, South Carolina
Year Built: 1975
Total Size: 60,000 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $7.50 to $9.50 PSF
Tenant Expenses: Triple Net
Remarks: This center is anchored with Winn-Dixie and Revco.
Exposure from N. Main Street is good.
8
<PAGE>
[LOGO]
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Watson Village
Location: South Main Street at Schockley Ferry Road
Anderson, South Carolina
Year Built: 1968
Total Size: 60,000 SF
Vacant Space: 3,726 SF
Vacancy Rate: 6.21%
Local Rent Range: $5.00 - $8.00 SF
Tenant Expenses: Triple Net
Remarks: This is an older center in which Winn-Dixie has
vacated and Alrenco is now the major tenant. Most of
the other tenants are small shops.
9
<PAGE>
[LOGO]
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLES
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
Lakeside Square & Lexington Triangle
a. Name Lakeside Plaza SHC Barnwell Plaza Village
------------------------- ------------------------ -------------------------
Sunset Blvd. & Lake
b. Street Address 302 Pearman Road 1019 Dunbarton Blvd. Dr.
------------------------- ------------------------ -------------------------
c. City Anderson, SC Barnwell, SC Lexington, SC
------------------------- ------------------------ -------------------------
d. Distance from Subject N/A 175 miles 125 miles
------------------------- ------------------------ -------------------------
2. Attributes
a. Year Built 1979 1985 1985
------------------------- ------------------------ -------------------------
b. Net sq. feet 185,946 70,725 115,754
------------------------- ------------------------ -------------------------
c. # Buildings 2 1 1
------------------------- ------------------------ -------------------------
d. # of Stories 1 1 1
------------------------- ------------------------ -------------------------
e. Vacancy % 20.30% 9.00% 1.3%
------------------------- ------------------------ -------------------------
3. Sales Information
a. Sales Price N/A $2,860,620 $4,489,380
------------------------- ------------------------ -------------------------
b. Sales Price PSF N/A $40.45 $38.78
------------------------- ------------------------ -------------------------
c. Date N/A 01-01-95 01-31-95
------------------------- ------------------------ -------------------------
d. NOI at time of Sale N/A 330,327 480,919
------------------------- ------------------------ -------------------------
e. Cap. Rate N/A 11.55% 10.71%
------------------------- ------------------------ -------------------------
4. Rank Relative to Subject
(inferior, similar, superior) N/A similar similar
------------------------- ------------------------ -------------------------
</TABLE>
<TABLE>
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Hampton Plaza Cumberland Plaza
--------------------- -------------------------
2864 Wilma 209 New Swithville
b. Street Address Randolph Blvd. Hwy.
--------------------- -------------------------
c. City Clarksville, TN McMinnville, TN
--------------------- -------------------------
d. Distance from Subject 435 miles 315 miles
--------------------- -------------------------
2. Attributes
a. Year Built 1988 1988
--------------------- -------------------------
b. Net sq. feet 189,302 143,951
--------------------- -------------------------
c. # Buildings 1 1
--------------------- -------------------------
d. # of Stories 1 1
--------------------- -------------------------
e. Vacancy % 0% 4.3%
--------------------- -------------------------
3. Sales Information
a. Sales Price $6,150,000 $5,225,050
--------------------- -------------------------
b. Sales Price PSF $23.24 $36.30
--------------------- -------------------------
c. Date 12-26-95 12-26-95
--------------------- -------------------------
d. NOI at time of Sale 753,627 693,726
--------------------- -------------------------
e. Cap. Rate 12.25% 13.28%
--------------------- -------------------------
4. Rank Relative to Subject
(inferior, similar, superior) similar similar
--------------------- -------------------------
</TABLE>
Explain Ranking/Comments: Subject is thought to be similar to
all of these comparables with respect to size and age.
Also, all of these comparables are located in towns
which are approximately the same size as subject.
10
<PAGE>
[LOGO]
COMPARABLE IMPROVED SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 072- 06- 04- 11, 20
NAME Barnwell Plaza
LOCATION 1019 Dunbarton Boulevard, Barnwell, SC
GRANTOR 1994 N1 SC Associates, LP
GRANTEE Tri Centers, LP
DEED REFERENCE Book 282/Page 137
DATE Jan 31, 1995
SALES PRICE $2,860,620
ADJUSTED SALES PRICE $2,860,620
SIZE BUILDING 70,725
SALES PRICE PER S.F. $40.45
SIZE LAND (ACRES) 11.28
SIZE LAND (S.F.) 491,357
YEAR BUILT 1985
LAND/BUILDING RATIO 6.95 To 1
UTILITIES All available
VERIFICATION Appraiser
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $399,045
GROSS INCOME MULTIPLE 7.17
EGIM 7.17
NET OPERATING INCOME $330,327
OVERALL RATE 11.55%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a good quality community shopping center
located in the town of Barnwell in Barnwell County
(pop. 20,000) in western South Carolina. Approximately
91% of the center was comprised of anchor space,
including Wal-Mart (34,875 SF), Food Lion (21,000 SF)
and Revco Drugs (8,450 SF). The income and expense
data here is based on the center's actual performance
at the time of sale, and include approximately $0.50
SF in overage rents from Wal-Mart and $0.10 SF in
reserves.
(590)
11
<PAGE>
[LOGO]
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Lexington Triangle Village
LOCATION U.S. 378 and North Lake Drive (SC #6), Lexington, SC
GRANTOR 1994 N1 SC Associates
GRANTEE Tri Centers, LP
DEED REFERENCE Book 3260, Page 199
DATE Jan 31, 1995
SALES PRICE $4,489,380
ADJUSTED SALES PRICE $4,489,380
SIZE BUILDING 115,754
SALES PRICE PER S.F. $38.78
SIZE LAND (ACRES) 12.51
SIZE LAND (S.F.) 544,936
YEAR BUILT 1985
LAND/BUILDING RATIO 4.71 To 1
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $607,469
GROSS INCOME MULTIPLE 7.39
EGIM 7.39
NET OPERATING INCOME $480,919
OVERALL RATE 10.71%
TYPE OF PURCHASER Private Investor
COMMENTS: This center is anchored by Wal-Mart (65,904 SF) and
Food Lion (25,000 SF) and there are 7 local shops
totaling 24,850 SF (21.5 percent). At the time of
sale, the center was 98.7 percent occupied with only
2,000 SF vacant. Wal-Mart has a base rent of $3.55 and
the lease expires 11/05. Currently, Wal-Mart is paying
about $0.50 per SF overage rent and Wal-Mart is
expected to leave the center in the near future as no
expansion room is available. The estimated cap rate
excludes potential overage rent form Wal-Mart and only
excludes income from the 2,000 SF vacant bay.
Projected expenses include $0.10 per SF reserves. The
center is masonry with brick front and metal mansard
canopy roof and in average condition. No outparcels
were included with this sale.
(763)
12
<PAGE>
[LOGO]
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME Hampton Plaza
LOCATION 2864 Wilma Rudolph Boulevard, Clarksville, TN
GRANTOR Aetna Life Insurance Company
GRANTEE Hampton II, LP
DEED REFERENCE Book 580, Page 1793
DATE Dec 26, 1995
SALES PRICE $6,150,000
ADJUSTED SALES PRICE $6,150,000
SIZE BUILDING 189,302
SALES PRICE PER S.F. $32.49
SIZE LAND (ACRES) 23.24
SIZE LAND (S.F.) 1,012,334
YEAR BUILT 1988
LAND/BUILDING RATIO 5.35 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Shopping Center District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $937,119
GROSS INCOME MULTIPLE 6.37
EGIM 6.56
NET OPERATING INCOME $753,627
OVERALL RATE 12.25%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center with Wal-Mart as a
major tenant prior to a new Wal-Mart Superstore being
built on the same block. While Wal-Mart remains liable
for the lease, the store is vacant. The remainder of
the center is occupied.
(759)
13
<PAGE>
[LOGO]
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
NAME Cumberland Plaza
LOCATION 209 New Smithville Highway, McMinnville, TN
GRANTOR Aetna Life Insurance
GRANTEE Cumberland II, LP
DEED REFERENCE Book 287, Page 204
DATE Dec 26, 1995
SALES PRICE $5,225,050
ADJUSTED SALES PRICE $5,225,050
SIZE BUILDING 143,951
SALES PRICE PER S.F. $36.30
SIZE LAND (ACRES) 19.64
SIZE LAND (S.F.) 855,518
YEAR BUILT 1988
LAND/BUILDING RATIO 5.94 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Highway Commercial District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $875,830
GROSS INCOME MULTIPLE 5.79
EGIM 5.97
NET OPERATING INCOME $693,726
OVERALL RATE 13.28%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center. Wal-Mart was the
major tenant and remains liable for the lease for the
remaining term. A new Wal-Mart Superstore was built
one block west of this property.
14
(762)
<PAGE>
[LOGO]
ADDENDA
o Anderson County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
<PAGE>
[LOGO]
USA COUNTIES 1996
Geographic Area: Anderson, SC (45007)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 .......................................................... 154,478
Percent 65 years and over ................................... 13.5
1990 .......................................................... 145,177
1980 .......................................................... 133,235
Occupied housing units, 1990 .................................... 55,481
Percent owner occupied ........................................ 75.2
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 .................................................... 1,972
Per 1,000 resident population ................................. 13.1
Percent to mothers under 20 years of age ...................... 19.7
Deaths, 1993 .................................................... 1,480
Per 1,000 resident population ................................. 9.8
Infant deaths per 1,000 live births, 1993 ....................... 14.7
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 ................................. 95,330
Percent high school graduates ................................. 64.0
Percent college graduates ..................................... 12.9
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ...................................... 80,372
Percent unemployed ............................................ 5.8
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ...................................... 3,202
Percent retail trade .......................................... 29.2
Percent services .............................................. 32.1
Paid employees, 1993 (pay period including March 12) ............ 49,199
Annual payroll, 1993 ($1,000) ................................... 968,525
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................ 2,495,247
Per capita (dollars) .......................................... 16,545
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ........................................... 1,076
Land in farms as percent of total land ........................ 35
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ..................................... 1,062,066
Per capita (dollars) .......................................... 7,172
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ................................ 39
Total deposits ($1,OO0) ....................................... 791,610
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 ................. 29,995
Retired workers ............................................... 18,435
Supplementary Security Income recipients, December 1994 ......... 3,177
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................ 2,955
1990 (dollars) ................................................ 2,305
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
[GRAPHIC OMITTED]
SITE PLAN
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 189
Retail Custom Rent Roll
Property: LAKESIDE SQUARE
300 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Available
706- 10 22,720 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
DOLLAR GENERAL #2920
DOLGENCORP, INC. 706- 20 7,000 07/01/96 06/30/99 3.00 07/01/96 21,000.00
- -------------------------------------------------------------------------------------------------------------------------
BADCOCK HOME FURNISHINGS CENT
JAMES F. MILLS 706- 30 7,440 01/01/94 12/31/98 3.06 01/01/96 22,800.00
3.23 07/01/96 24,000.00
3.39 01/01/97 25,200.00
3.55 07/01/97 26,400.00
3.71 01/01/98 27,600.00
3.87 07/01/98 28,800.00
- -------------------------------------------------------------------------------------------------------------------------
Available
706- 40 5,484 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available
706- 50 3,997 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
RADIO SHACK
TANDY CORPORATION 706- 60 1,800 02/01/94 01/31/97 3.00 02/01/94 5,400.00
- -------------------------------------------------------------------------------------------------------------------------
Available
706- 9999 0 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
DOLLAR GENERAL #2920
DOLGENCORP, INC. Fixed 0 Fixed 0 Fixed 0 0.00 3.00 70,000 Y
- -----------------------------------------------------------------------------------------------------------------------------------
BADCOCK HOME FURNISHINGS CENT
JAMES F. MILLS None 0 None 0 None 0 01/01/99 12/31/03 4.03 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
RADIO SHACK
TANDY CORPORATION PRS 1979 None 0 Fixed 0 0.00 2.50 216,000 Y
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Square Feet: Occupied.. 16,240 Current Annual Base Rent 51,600.00
Available. 32,201
Total..... 48,441
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 184
Retail Custom Rent Roll
Property: LAKESIDE SHOPPING CENTER
302 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TIMELY MONEY SERVICE
JOAN MARIES & SEAVY MADE BROWN 705- 10 490 01/01/97 12/31/99 9.00 01/01/97 4,410.00
- -------------------------------------------------------------------------------------------------------------------------
Available
705- 15 1,029 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available
705- 20 1,078 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
CHRISTIAN BOOK STORE, THE
WILLIAM THOMAS DAVIS 705- 25 1,181 10/01/94 09/30/97 7.12 10/01/94 8,409.12
0.00 0.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
RAINBOW RECORDS
MARK HAMBREE 705- 30 1,763 10/01/91 09/30/97 8.34 10/01/94 14,703.96
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available
705- 40 1,755 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
Available
705- 50 1,690 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
WAL-MART
KUHN'S BIG K STORES CORP. (SU 705- 60 50,000 11/01/79 01/31/00 2.75 11/01/79 137,499.96
0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TIMELY MONEY SERVICE
JOAN MARIES & SEAVY MADE BROWN Full 0 Full 0 Full 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
CHRISTIAN BOOK STORE, THE
WILLIAM THOMAS DAVIS Full 0 Full 0 Full 0 10/01/96 09/30/97 0.00 0.00 0
10/01/97 09/30/98 0.00 0.00 0
10/01/98 09/30/99 0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
RAINBOW RECORDS
MARK HAMBREE Full 0 Full 0 Fixed 0 10/01/94 09/30/97 0.00 0.00 0
10/01/97 09/30/00 0.00 0.00 0
10/01/00 09/30/03 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
WAL-MART
KUHN'S BIG K STORES CORP. (SU PRS 1980 None 0 Full 0 02/01/00 01/31/06 2.75 1.50 9,166,700 Y
02/01/06 01/31/11 2.75 1.50 0 Y
</TABLE>
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 185
Retail Custom Rent Roll
Property: LAKESIDE SHOPPING CENTER
302 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WAL-MART
KUHN'S BIG K STORES CORP. (SU 705- 60 50,000 11/01/79 01/31/00 0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORES #256
FAMILY DOLLAR STORES OF ANDER 705- 70 7,020 01/01/85 12/31/00 3.62 01/01/96 25,440.00
0.00 0.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
ACE TV RENTALS
SOUTH CAROLINA RENTALS, INC. 705- 80 3,300 11/01/96 10/31/01 8.60 11/01/95 28,386.96
0.00 0.00
9.00 11/01/96 29,700.00
9.25 11/01/99 30,525.00
- -------------------------------------------------------------------------------------------------------------------------
BI-LO STORE #110
BI-LO INC. 705- 90 37,801 11/01/91 10/31/11 5.86 11/01/91 221,603.88
6.11 11/01/01 231,074.16
0.00 0.00
0.00 0.00
0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WAL-MART
KUHN'S BIG K STORES CORP. (SU PRS 1980 None 0 Full 0 02/01/11 01/31/16 2.75 1.50 0 Y
02/01/16 01/31/21 2.75 1.50 0 Y
02/01/21 01/31/26 2.75 1.50 0 Y
02/01/26 01/31/31 2.75 1.50 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORES #256
FAMILY DOLLAR STORES OF ANDER PRS 1980 None 0 None 0 01/01/91 12/31/95 3.62 2.50 1,017,600 Y
01/01/96 12/31/00 3.62 2.50 0 Y
01/01/01 12/31/05 3.62 2.50 0 Y
01/01/06 12/31/10 3.62 2.50 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
ACE TV RENTALS
SOUTH CAROLINA RENTALS, INC. Full 0 Full 0 Full 0 11/01/96 10/31/01 0.00 0.00 0
11/01/01 10/31/06 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
BI-LO STORE #110
BI-LO INC. Full 0 Full 0 Full 0 11/01/11 10/31/16 6.11 1.00 22,160,400 Y
11/01/16 10/31/21 6.11 1.00 23,107,400 Y
11/01/21 10/31/26 6.11 1.00 0 Y
11/01/26 10/31/31 6.11 1.00 0 Y
11/01/31 10/31/36 6.11 1.00 0 Y
</TABLE>
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 186
Retail Custom Rent Roll
Property: LAKESIDE SHOPPING CENTER
302 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BI-LO STORE #110
BI-LO INC. 705- 90 37,801 11/01/91 10/31/11 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
REVCO #846
FAY'S DRUG COMPANY, INC. 705- 100 10,800 01/01/81 02/28/01 4.00 03/01/81 43,200.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
AUTO ZONE #171
AUTOZONE DEVELOPMENT CORPORAT 705- 110 5,500 12/01/83 11/30/99 4.55 12/01/93 24,999.96
0.00 0.00
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
NEW CHINA GARDEN
YONG-KU LI 705- 120 2,500 03/01/95 02/28/00 6.00 03/01/95 15,000.00
0.00 0.00
6.18 03/01/96 15,456.00
6.36 03/01/97 15,912.00
6.56 03/01/98 16,392.00
6.75 03/01/99 16,884.00
- -------------------------------------------------------------------------------------------------------------------------
SUN-BRITE COIN LAUNDRY
SANDRA R. BRAKE 705- 130 1,600 12/01/96 04/30/02 0.00 0.00
0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BI-LO STORE #110
BI-LO INC. Full 0 Full 0 Full 0 11/01/36 10/31/41 6.11 1.00 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
REVCO #846
FAY'S DRUG COMPANY, INC. PRS 1981 None 0 Full 0 03/01/01 02/28/06 4.00 2.00 2,160,000 Y
03/01/06 02/28/11 4.00 2.00 0 Y
03/01/11 02/28/16 4.00 2.00 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
AUTO ZONE #171
AUTOZONE DEVELOPMENT CORPORAT Full 0 Full 0 Full 0 12/01/88 11/30/90 4.55 2.00 1,250,000 Y
12/01/90 11/30/93 4.55 2.00 0 Y
12/01/93 11/30/96 4.55 2.00 0 Y
12/01/96 11/30/99 4.55 2.00 0 Y
- -----------------------------------------------------------------------------------------------------------------------------------
NEW CHINA GARDEN
YONG-KU LI Full 0 Full 0 Full 0 03/01/00 02/28/05 7.02 0.00 0
03/01/05 02/28/10 8.54 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
SUN-BRITE COIN LAUNDRY
SANDRA R. BRAKE Full 0 Full 0 Full 0 05/01/02 04/30/07 0.00 0.00 0
05/01/07 04/30/12 0.00 0.00 0
</TABLE>
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 187
Retail Custom Rent Roll
Property: LAKESIDE SHOPPING CENTER
302 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUN-BRITE COIN LAUNDRY
SANDRA R. BRAKE 705- 130 1,600 12/01/96 04/30/02 0.00 0.00
8.00 05/01/97 12,800.04
8.50 05/01/00 13,599.96
- -------------------------------------------------------------------------------------------------------------------------
TAE KWON DO, INC.
EUNG S. MOON 705- 140 3,200 01/01/96 12/31/98 3.50 01/01/96 11,199.96
0.00 0.00
5.37 07/01/96 17,199.96
7.75 11/01/96 24,799.92
7.75 01/01/97 24,799.92
7.75 01/01/98 24,799.92
- -------------------------------------------------------------------------------------------------------------------------
PIC-A-FLICK VIDEO
JAMES W. KEITH, JR. 705- 150 5,600 01/01/94 12/31/99 8.59 01/01/94 48,108.36
0.00 0.00
0.00 0.00
0.00 0.00
9.45 01/01/97 52,908.36
9.35 01/01/97 52,322.24
- -------------------------------------------------------------------------------------------------------------------------
SUBWAY #1239
SUBWAY SANDWICH SHOPS, INC. 705- 160 1,200 08/01/85 07/30/00 10.40 08/01/95 12,474.84
0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUN-BRITE COIN LAUNDRY
SANDRA R. BRAKE Full 0 Full 0 Full 0 05/01/12 04/30/19 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
TAE KWON DO, INC.
EUNG S. MOON Full 0 Full 0 Full 0 01/01/99 12/31/01 0.00 0.00 0
01/01/02 12/31/04 0.00 0.00 0
01/01/05 12/31/07 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
PIC-A-FLICK VIDEO
JAMES W. KEITH, JR. Full 0 Full 0 Full 0 01/01/97 12/31/99 0.00 0.00 0
01/01/00 12/31/02 0.00 0.00 0
01/01/03 12/31/08 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
SUBWAY #1239
SUBWAY SANDWICH SHOPS, INC. PRS 1986 PRS 1986 Fixed 0 08/01/95 07/30/00 0.00 0.00 0
08/01/00 07/30/05 0.00 0.00 0
</TABLE>
<PAGE>
[LOGO]
Date: 04/08/97 EDENS & AVANT, INC. Page 188
Retail Custom Rent Roll
Property: LAKESIDE SHOPPING CENTER
302 PEARMAN DAIRY ROAD
ANDERSON, SC 29625
Column Legends:
Tenant/Propert MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUBWAY #1239
SUBWAY SANDWICH SHOPS, INC. 705- 160 1,200 08/01/85 07/30/00 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUBWAY #1239
SUBWAY SANDWICH SHOPS, INC. PRS 1986 PRS 1986 Fixed 0 08/01/05 07/30/10 0.00 0.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Square Feet: Occupied.. 131,955 Current Annual Base Rent 615,485.00
Available. 5,552
Total..... 137,507
<PAGE>
[LOGO]
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Pearman Dairy Road - Facing North
[GRAPHIC OMITTED]
Pearman Dairy Road - Facing South
<PAGE>
[LOGO]
[GRAPHIC OMITTED]
Whitner Street - Facing West
[GRAPHIC OMITTED]
Whitner Street - Facing East
<PAGE>
[LOGO]
[GRAPHIC OMITTED]
Front View of Subject - Lakeside Plaza Shopping Center
[GRAPHIC OMITTED]
Front View of Subject - Lakeside Plaza Shopping Center (former Wal-Mart store)
<PAGE>
[LOGO]
[GRAPHIC OMITTED]
View of shops on outlot to Lakeside Plaza Shopping Center
[GRAPHIC OMITTED]
Rear view of Lakeside Plaza Shopping Center
<PAGE>
[LOGO]
[GRAPHIC OMITTED]
Front View of Subject - Lakeside Square Shopping
Center (former Winn Dixie store)
[GRAPHIC OMITTED]
Front View of Subject - Lakeside Square Shopping Center
<PAGE>
[LOGO]
[GRAPHIC OMITTED]
Side View of Subject - Lakeside Square Shopping Center
[GRAPHIC OMITTED]
Rear View of Subject - Lakeside Square Shopping Center
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
SOUTH SQUARE
SHOPPING CENTER
1730 Airport Road
Lancaster, Lancaster County, South Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 13, 1997
<PAGE>
[Letterhead of O. MARSHALL DODDS CO., INC.]
May 14, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
South Square Shopping Center
1730 Airport Road
Lancaster, Lancaster County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 13,1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 44,350 square
feet of leaseable area. The center was constructed in 1992 and the anchor
tenants are Food Lion and Revco. The subject property is currently 100 percent
occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
-------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Lancaster is the county seat of Lancaster County and is located in the north
central region of South Carolina. The city is served by US Highways #521, #21
and #601 and SC Highways #903, #9 and #200. I-77 is located 18 miles to the
south in Great Falls. Charlotte is located approximately 39 miles to the north
and Columbia is located 55 miles to the south. The population of Lancaster
County in 1995 (most recent) was 56,000 and 10,000 for the City of Lancaster.
The fastest growing segments of the population are those over the age of 65 and
the middle adult groups. The average per capita income for Lancaster County was
$15,583 in 1993 (most recent). Manufacturing continues to be the dominant
occupation, although the last ten years have seen substantial declines in both
durable and nondurable goods manufacturing. The unemployment rate for Lancaster
County as of March, 1997 was 5.4% which fell from 6.5% in February of 1997.
South Carolina had an unemployment rate of 5.3%in March.
Neighborhood and Site
The subject neighborhood is located in the southern portion of the Lancaster.
The major traffic arteries running through the neighborhood are Airport Road
which is also SC Highway #914 and Great Falls Road which is SC Highway #200.
Several single family dwellings are located in the subject neighborhood as well
as multi-family properties. Subdivisions in the area include Santarosa,
Starmount Acres and Erwinwood Acres. South Middle School and Brooklyn Springs
Elementary are located to the north of the subject off SC Highway #200. The
Lancaster Country Club is located to the south of the subject on SC Highway
#914. Other commercial uses include a Piggly Wiggly anchored shopping center, an
Amoco convenience market/self-service gasoline station, an Exxon and The
Beverage Warehouse. Commercial properties are concentrated on the major
thoroughfares with residential properties being located off of these
thoroughfares. The intersection of SC Highway #914 and SC Highway #200 is more
or less the middle of the subject neighborhood.
Physical features are as follows:
1. Size 6.277 acres or 273,426 square feet
2. Identity 1730 Airport Road
TMS # 86E-B-14 and # 86E-15
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
1
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 44,350 square feet
2. Layout & Design 1 story-food store, drug store and four
shops
3. Parking Spaces 220
4.97 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block on
side and rear and metal seamed roof
Market Position and Marketability Conclusions
The Lancaster area contains approximately seven retail structures. The North
Park Square and Westgate Shopping Center are two older centers that were built
in the 1960's. The majority of the tenants have moved out. The Westgate Shopping
Center contains a total of 76,000 square feet with Crown Cinemas as its only
tenant. Food Lion was formerly the anchor in the North Park Square but has
vacated their store and the locals vacated shortly after. The Lancaster Shopping
Center measures 29,047 square feet and is located at 403-411 Meeting Street in
close proximity to downtown Lancaster. It was built in 1963 and expanded in
1987. The rental rate range is from $5.25 to $7.75 per square foot. Tenants
include Harris Teeter, Garris Jewelry and Mobley Drugs. The Lancer Center is
also located in Lancaster. It contains 171,396 square feet and is located on
Highway #9 By-Pass. This is a community type center that first opened in 1987
and was expanded in 1993. This center is currently 100 percent occupied with
such tenants as Wal-Mart, Bi-Lo, Revco and Cato Fashions and a rental rate range
of $6.75 to $9.50 per square foot. The Lancaster Square is located on North Main
Street in a heavily traveled area of Lancaster near SC Highway #9. It was
constructed in 1972 and expanded to include Belk and JC Penney stores for a
total of 90,000 square feet. Recently, Winn Dixie relocated to a center across
the street and Food Lion has occupied the space. This center is currently 100
percent occupied with a rental rate range of $8.00 to $10.00. The Lancaster
Plaza contains 77,400 square feet and was constructed in 1971. Bi-Lo and Revco
Drugs are the anchor tenants and this center is located in a heavily traveled
area of Lancaster on US Highway #9. Rental rates range from $3.50 to $5.75 per
square foot and as of the date of this study, this center was 100 percent
occupied. No new properties are under construction or planned for this area at
this time.
The subject property is in the middle of the neighborhood in the southern
portion of Lancaster. The location of subject is convenient to the single family
and multi-family dwellings that are located throughout the neighborhood. SC
Highways #200 and #914 are the major traffic arteries running through the area.
The subject property has five shops with rental rates ranging from $7.50 to
$9.00 per square foot. These are thought to be reasonable rental rates for the
neighborhood because this center is the newest in Lancaster and has maintained a
high occupancy rate.
The rental rate for the Food Lion is $7.15 per square foot while the Revco Drug
Store pays $7.75 per square foot. Overage rentals are not being received from
any of these tenants at this time.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the southern section of Lancaster. The
neighborhood is continuing to develop and contains several single family and
multi-family dwellings. Commercial developments are located along the major
traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
<TABLE>
<CAPTION>
====================================================================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name South Square SHC Lancaster SHC Lancer Center
------------------------- ---------------------- ------------------------
b. Street 1730 Airport Road 403-411 Meeting St. Highway #9 Bypass
------------------------- ---------------------- ------------------------
c. City Lancaster, SC Lancaster, SC Lancaster, SC
------------------------- ---------------------- ------------------------
d. Distance from subject N/A 3 miles 5 miles
------------------------- ---------------------- ------------------------
e. Contact Edens & Avant, Inc. IRT Property Co. Wyatt Development
------------------------- ---------------------- ------------------------
f. Phone (803) 779-4420 (770) 955-4406 (803) 649-3975
------------------------- ---------------------- ------------------------
2. Attributes
a. Year built 1992 1963 1987, Expanded in 1993
------------------------- ---------------------- ------------------------
b. Net sq. Ft. 44,350 29,047 171,396
------------------------- ---------------------- ------------------------
c. # building 1 1 1
------------------------- ---------------------- ------------------------
d. #stories 1 1 1
------------------------- ---------------------- ------------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A
------------------------- ---------------------- ------------------------
f. # elevators N/A N/A N/A
------------------------- ---------------------- ------------------------
g. Parking Adequate Adequate Adequate
------------------------- ---------------------- ------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
------------------------- ---------------------- ------------------------
I. Vacancy % 0% 0% 0%
------------------------- ---------------------- ------------------------
j. Anchors, if Retail Food Lion, Revco Harris Teeter Wal-Mart, Bi-Lo, Revco
------------------------- ---------------------- ------------------------
</TABLE>
Comments: All of the comparables are located in Lancaster, South
Carolina and are all experiencing 100 percent occupancy rates
at this time. Subject is the newest center in this market
area.
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Identification
a. Name Lancaster Square Lancaster Plaza
---------------------- ----------------------
b. Street North Main Street Highway #9 Bypass
---------------------- ----------------------
c. City Lancaster, SC Lancaster, SC
---------------------- ----------------------
d. Distance from subject 51/2miles 6 miles
---------------------- ----------------------
e. Contact Development Assoc. IRT Property Co.
---------------------- ----------------------
f. Phone N/A (770) 955-4406
---------------------- ----------------------
2. Attributes
a. Year built 1972 1971
---------------------- ----------------------
b. Net sq. Ft. 90,000 77,400
---------------------- ----------------------
c. # building 1 1
---------------------- ----------------------
d. #stories 1 1
---------------------- ----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A
---------------------- ----------------------
f. # elevators N/A N/A
---------------------- ----------------------
g. Parking Adequate Adequate
---------------------- ----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
---------------------- ----------------------
I. Vacancy % 0% 0%
---------------------- ----------------------
Food Lion, Belk,
j. Anchors, if Retail JC Penney, Eckerd Bi-Lo, Revco
---------------------- ----------------------
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
<TABLE>
<CAPTION>
====================================================================================================================================
B. RENTAL INFORMATION
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A
----------------------- ------------------------ ----------------------
b. Shop Space $7.50 - $9.00 $5.25 - $7.75 $6.75 - $9.50
----------------------- ------------------------ ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
----------------------- ------------------------ ----------------------
3. Rent Concessions None None None
----------------------- ------------------------ ----------------------
4. Effective Rent $7.50 - $9.00 $5.25 - $7.75 $6.75 - $9.50
----------------------- ------------------------ ----------------------
5. TI Allowance None None None
----------------------- ------------------------ ----------------------
6. Expense Stop None None None
----------------------- ------------------------ ----------------------
7. Length of Lease Term 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
----------------------- ------------------------ ----------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00%
----------------------- ------------------------ ----------------------
9. Percentage Rent
(per lease terms) None None None
----------------------- ------------------------ ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
----------------------- ------------------------ ----------------------
11. Annual Operating Expense
psf (Including taxes)
N/A N/A N/A
----------------------- ------------------------ ----------------------
C. RANK RELATIVE
TO SUBJECT
(inferior,similar,
superior) N/A Inferior Superior
----------------------- ------------------------ ----------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Comparables #2 and #3 are ranked superior to
subject because they are located in a more heavily
traveled area of Lancaster and are larger centers
than subject. Comparables #1 and #4 are ranked
inferior to subject because they are significantly
older centers and Comparable #1 is smaller than
subject.
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Asking Rental Rate
a. Anchor Space N/A N/A
---------------------- ---------------------
b. Shop Space $8.00 - $10.00 $3.50 - $5.75
---------------------- ---------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
---------------------- ---------------------
3. Rent Concessions None None
---------------------- ---------------------
4. Effective Rent $8.00 - $10.00 $3.50 - $5.75
---------------------- ---------------------
5. TI Allowance None None
---------------------- ---------------------
6. Expense Stop None None
---------------------- ---------------------
7. Length of Lease Term 3 - 5 years (shops) 3 - 5 years (shops)
---------------------- ---------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
---------------------- ---------------------
9. Percentage Rent
(per lease terms) None None
---------------------- ---------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
---------------------- ---------------------
11. Annual Operating Expense
psf (Including taxes)
N/A N/A
---------------------- ---------------------
C. RANK RELATIVE
TO SUBJECT
(inferior,similar,
superior) Superior Inferior
---------------------- ---------------------
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Lancaster Shopping Center
Location: 403-411 Meeting Street
Lancaster, SC
Year Built: 1963, Expanded 1987
Total Size: 29,047 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $5.25 - $7.75
Tenant Expenses: Triple Net
Remarks: Harris Teeter is the major tenant. Located on
Meeting Street which is in close proximity to the
downtown area of Lancaster.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Lancer Center
Location: Highway #9 By-Pass
Lancaster, SC
Year Built: 1987
Total Size: 171,396 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $6.75 - $9.50
Tenant Expenses: Triple Net
Remarks: Major tenants are Wal-Mart, Bi-Lo and Revco. This
center is located on a heavily traveled
thoroughfare and has operated at a high occupancy
rate.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Lancaster Square
Location: North Main Street
Lancaster, SC
Year Built: 1972
Total Size: 90,000 SF
Vacant Space: None
Vacancy Rate: 0%
Average Rental Rate: $8.00 - $10.00
Tenant Expenses: Triple Net
Remarks: This center was constructed in 1972
and when Winn Dixie vacated their store,
Food Lion occupied the space. Belk and JC
Penney's are also located in this center.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Lancaster Plaza
Location: Highway #9 By-Pass
Lancaster, SC
Year Built: 1971
Total Size: 77,400 SF
Vacant Space: None
Vacancy Rate: 0%
Average Rental Rate: $3.50 - $5.75
Tenant Expenses: Triple Net
Remarks: This center was constructed in 1971. Bi-Lo and
Revco are the major tenants.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
<TABLE>
<CAPTION>
====================================================================================================================================
II. SALES COMPARABLES
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name South Square SHC St. Andrews Crossing Eastage Shopping Center
------------------------ ------------------------ --------------------------
b. Street Address NWC Whiskey Rd. &
1730 Airport Road 817 St. Andrews Road Eastgate Dr.
------------------------ ------------------------ --------------------------
c. City Lancaster, SC Columbia, SC Aiken, SC
------------------------ ------------------------ --------------------------
d. Distance from Subject N/A 61 miles 112 miles
------------------------ ------------------------ --------------------------
2. Attributes
a. Year Built 1992 1994 1995
------------------------ ------------------------ --------------------------
b. Net sq. feet 44,350 66,910 SF 75,716 SF
------------------------ ------------------------ --------------------------
c. # Buildings 1 1 1
------------------------ ------------------------ --------------------------
d. # of Stories 1 1 1
------------------------ ------------------------ --------------------------
e. Vacancy % 0% 0% 7.21%
------------------------ ------------------------ --------------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000
------------------------ ------------------------ --------------------------
b. Sales Price PSF N/A $97.89 $88.16
------------------------ ------------------------ --------------------------
c. Cap. Rate N/A 9.69% 9.86%
------------------------ ------------------------ --------------------------
d. Date N/A 05-25-94 09-28-95
------------------------ ------------------------ --------------------------
e. NOI at time of Sale N/A $634,797 $782,704
------------------------ ------------------------ --------------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A Superior Superior
------------------------ ------------------------ --------------------------
</TABLE>
Explain Ranking/Comments: Comparables #1, #2 and #4 are ranked superior to
subject. The reason for this is because of the location of these
comparables being superior to subject. Also, these comparables are
newer than subject. Comparable # 3 is located in a commercial area
that is approximately the same size as subject and is similar.
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Identification
a. Name One Norman Center Paw Creek Commons
----------------------- --------------------
b. Street Address 19706 One Norman Blvd. E/S Little Rock Road
at Freedom Drive
----------------------- --------------------
c. City Cornelius, NC Charlotte, NC
----------------------- --------------------
d. Distance from Subject 45 miles 38 miles
----------------------- --------------------
2. Attributes
a. Year Built 1993 1996
----------------------- --------------------
b. Net sq. feet 54,185 SF 66,050 SF
----------------------- --------------------
c. # Buildings 1 1
----------------------- --------------------
d. # of Stories 1 1
----------------------- --------------------
e. Vacancy % 6.98% 2.73%
----------------------- --------------------
3. Sales Information
a. Sales Price $4,650,000 $5,384,000
----------------------- --------------------
b. Sales Price PSF $85.82 $77.52
----------------------- --------------------
c. Cap. Rate 9.68% 9.61%
----------------------- --------------------
d. Date 10-12-95 03-25-97
----------------------- --------------------
e. NOI at time of Sale $474,591 $517,412
----------------------- --------------------
4. Rank Relative to Subject
(inferior, similar,
superior) Similar Superior
----------------------- --------------------
9
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate Drive,
Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from
$8.00 to $13.00 per square foot. This is a
neighborhood shopping center with stucco and brick
exterior that was constructed in early 1995. Parking
is considered adequate. The occupancy at the time of
sale was 95 percent.
(643)
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,384,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.61%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie
and Revco. Blockbuster occupies a store containing
5,500 square feet at $11.20 per square foot. Rents on
shops range from $13.00 to $14.00 per square foot.
Anchor income is 79.41 percent of gross income.
(793)
13
<PAGE>
ADDENDA
Lancaster County Demographics
Comparables Rental Map
Comparables Sales Map
Building Layout
Rent Roll
Photographs of Subject
<PAGE>
USA COUNTIES 1996
Geographic Area: Lancaster, SC (45057)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census) Total resident population:
1995 ..................................................... 56,325
Percent 65 years and over .............................. 12.3
1990 ..................................................... 54,516
1980 ..................................................... 53,361
Occupied housing units, 1990 ............................... 19,778
Percent owner occupied ................................... 74.8
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ............................................... 775
Per 1,000 resident population ............................ 13.9
Percent to mothers under 20 years of age ................. 19.0
Deaths, 1993 ............................................... 523
Per 1,000 resident population ............................ 9.4
Infant deaths per 1,000 live births, 1993 .................. 12.9
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 ............................ 34,417
Percent high school graduates ............................ 60.0
Percent college graduates ................................ 9.6
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ................................. 29,895
Percent unemployed ....................................... 7.7
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ................................. 1,059
Percent retail trade ..................................... 30.1
Percent services ......................................... 33.0
Paid employees, 1993 (pay period including March 12) ....... 16,846
Annual payroll, 1993 ($1,000) .............................. 323,305
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ....................... 867,176
Per capita (dollars) ..................................... 15,583
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ...................................... 444
Land in farms as percent of total land ................... 17
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ................................ 313,876
Per capita (dollars) ..................................... 5,684
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ........................... 8
Total deposits ($1,000) .................................. 205,773
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 ............ 9,705
Retired workers .......................................... 5,780
Supplementary Security Income recipients, December 1994 .... 1,295
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ........................................... 2,692
1990 (dollars) ........................................... 1,982
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
LANCASTER COUNTY
OVERVIEW
December, 1996
LOCATION POPULATION (1995 estimate)
- -------- ----------
Region: North Central Lancaster County 56,000
County: Lancaster Municipalities:
County Seat: Lancaster Town of Heath Springs 945
Town of Kershaw 1,879
City of Lancaster 10,000
Miles to:
Charlotte 39
Columbia 55 (2000 estimate)
New York 664 ---------------
Miami 702 Lancaster County 59,000
Atlanta 247
San Francisco 2770 GOVERNMENT
----------
Type City Government:
Council
CLIMATE Council Members: 7 (district election)
- ------- Length of Terms: 4 years
Average Temperature
Annual 61.4 Type County Government:
January 43.1 Council/Administrator
July 79.1 Council Members: 7 (district election)
Mean Temperature Length of Terms: 4 years
High 79.1
Low 43.1 Emergency Medical Service:
Average Humidity Stations: 4
1:00 a.m. 76.0 Full-time personnel: 27
1:00 p.m. 49.4 Part-time personnel: 27
7:00 a.m. 83.0 *Convalescent (non-emergency) crew
7:00 p.m. 61.0 on duty Mon.-Fri., 8:00 a.m.- 5:00 pm.
*Paramedic on every call
Mean Yearly Precipitation 43.2"
Heat Degree Days 3,342 hours Fire Department:
Cool Degree Days 1,546 hours Full-time Personnel 22
Volunteer Personnel 20
TRANSPORTATION Fire Insurance Rating 4
- -------------- Volunteer Fire Depts: 19
Highways Serving the Area:
U.S.: U.S. 521, U.S. 21, U.S. 601 City Police Department:
S.C.: S.C. 9, S.C. 903, S.C. 200 Employees 46
1-77 South: 18 miles (Great Falls) Equipped Cars 21
1-77 North: 23 miles (Rock Hill)
County Sheriff's Department:
Employees 77
Equipped Cars 44
<PAGE>
Per Capita Income
- -----------------
$15,583 - Lancaster County, 1993
$16,861 - South Carolina, 1993
Source: 1995 S.C. Statistical Abstract
Median household E.B.l.*
- ------------------------
$27,569 - Lancaster County, 1995
$28,022 - South Carolina, 1995
Households by E.B.I.: *
- -----------------------
25.9% $20,000-$34,999
19.7% $35,000-$49,999
18.5% $50,000 and over
*After tax figure-Effective Buying Income
Source: 1996 Sales and Marketing
Management
Third quarter, 1995 ACCRA Cost of Living
Index showed Lancaster County living costs
for mid-management family lowest among 35
areas in Ga., N.C. and S.C. participating
in Survey. Nationwide, of 322 communities,
Lancaster was sixth lowest.
Copy of Survey available at Chamber office.
Labor Force: (DEC. 1996)
- ------------
Lancaster County: 27,730
Non-Manufacturing Emp.: 11,820
Manufacturing Emp.: 6,760
Unemployment Rate: 5.1%
Sector Employment (1995)*:
- --------------------------
Construction 4.3%
Manufacturing 38.2%
Transportation/Public Util. 2.3%
Wholesale/Retail Trade 22.4%
Financial/Ins./Real Estate 4.4%
Government 12.9%
Service 15.5%
Source: S.C.Employment Security Commission
FINANCIAL INSTITUTIONS
- ----------------------
Number of Banks: 5
BB&T - 283-9936
Bank of Heath Springs - 273-2016
First Citizens Bank - 285-7431
First Palmetto Savings Bank - 285-6978
Wachovia Bank - 286-3321
Number of Credit Unions: 2
Bowater Carolina Fed. Credit Union - 285-2001
Founders Federal Credit Union - 283-5900
TAXES
-----
Property Taxes - Mills - 1996:
City County School* TOTAL
---- ------ -------
140.4 (65 + 170.5) 235.5
*first $100,000 of residential property value exempted from school taxes
Assessment
Ratio: City County
Residential 4% 4%
Agriculture 4% 4%
Other Prop. 6% 6%
Industrial 10.5% 10.5%
Personal 10.5% 10.5%
Public Util. 9.5% 9.5%
Trans. 9.5% 9.5%
STATE TAXES
-----------
Corporate Income 5%
Retail Sales 6%
Intangibles N/A
Individual Income Min: 2% - Max. 7%
SCHOOLS
-------
District Serving Area: LANCASTER
Number of Public Schools:
Elementary: 10
Middle: 4
Secondary: 4
Lancaster County Vocational School
Number of Pupils: 10,870
Number of Teachers: 741
Colleges, Universities, Technical Schools,
and other schools serving the area:
University of South Carolina Lancaster
University of South Carolina (Columbia)
Wingate College (Monroe, N.C.)
Winthrop University (Rock Hill)
York Technical College (Rock Hill)
CHURCHES
--------
Protestant: 100+
Catholic: 1
Ind./Non-denominational: 10
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
SITE PLAN
[GRAPHIC OMITTED]
SOUTH SQUARE SHOPPING CENTER
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 140
Property: SOUTH SQUARE SHOPPING CENTER
1730 AIRPORT ROAD
LANCASTER, SC 29720-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DOUBLE EIGHT CHINESE
F/K/A CHINA 88 676- 10 1,200 11/21/94 11/30/04 0.00 0.00
0.00 0.00
7.00 12/01/94 8,400.00
7.50 12/01/96 9,000.00
8.00 12/01/97 9,600.00
9.60 12/01/99 11,520.00
- -------------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP. 676- 20 1,200 12/01/92 11/30/97 0.00 0.00
0.00 0.00
8.00 01/01/93 9,600.00
0.00 0.00
8.50 12/01/95 10,200.00
9.00 12/01/96 10,800.00
- -------------------------------------------------------------------------------------------------------------------------
FOOD LION #1209 676- 30 29,000 12/02/92 12/01/17 0.00 0.00
7.15 01/01/93 207,350.04
0.00 0.00
0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DOUBLE EIGHT CHINESE Full 0 Full 0 Full 0 12/01/04 11/30/09 0.00 0.00 0
F/K/A CHINA 88 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP. Full 0 Full 0 Full 0 12/01/95 11/30/97 8.50 0.00 0
12/01/97 11/30/00 0.00 0.00 0
12/01/00 11/30/03 0.00 0.00 0
0.00 0.00
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
FOOD LION #1209 Full 0 PRS 1993 Fixed 0 12/02/18 12/01/23 7.15 0.00 0
12/02/23 12/01/28 7.15 0.00 0
12/02/28 12/01/33 7.15 0.00 0
12/02/33 12/01/38 7.15 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 141
Property: SOUTH SQUARE SHOPPING CENTER
1730 AIRPORT ROAD
LANCASTER, SC 29720-000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVCO #2476 676-40 8,450 10/25/92 10/31/02 7.25 11/01/92 65,487.48
- -------------------------------------------------------------------------------------------------------------------------
ENERGY VIDEO 676-50 3,000 12/01/92 11/30/97 7.25 12/01/92 23,250.00
DOUG CRENSHAW
8.25 12/01/95 24,750.00
8.75 12/01/96 26,250.00
- -------------------------------------------------------------------------------------------------------------------------
TONY'S PIZZA 676-60 1,500 04/01/93 03/31/98 8.50 04/01/93 12,750.00
- -------------------------------------------------------------------------------------------------------------------------
WACHOVIA BANK OF SC 676-70 0 02/01/97 01/31/00 0.00 03/01/97 7,200.00
WACHOVIA BANK OF SC, N.A.
0.00 0.00
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVCO #2476 Full 0 Full 0 Full 0 11/01/02 10/31/07 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY VIDEO Full 0 Full 0 Full 0 0.00 0.00 0
DOUG CRENSHAW
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
TONY'S PIZZA Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
WACHOVIA BANK OF SC
WACHOVIA BANK OF SC, N.A None 0 None 0 None 0 02/01/00 01/31/03 0.00 0.00 0
02/01/03 01/31/06 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 44,350 Current Annual Base Rent 338,837.52
Available. 0
Total... 44,350
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
- -------------------------------
[GRAPHIC OMITTED]
Airport Road - Facing Northwest
[GRAPHIC OMITTED]
Airport Road - Facing Southeast
<PAGE>
[GRAPHIC OMITTED]
View of Entrance to Subject Property from Airport Road
[GRAPHIC OMITTED]
View of Entrance to Subject Property from Barton Road
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject Property
[GRAPHIC OMITTED]
Front View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Side View of Subject Property
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
CLOVER PLAZA
SHOPPING CENTER
809 Bethel Road
Clover, York County, South Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 13, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
May 14, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Clover Plaza
809 Bethel Road
Clover, York County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 13,1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 45,575 square
feet of leaseable area. The center was constructed in 1990 and the anchor
tenants are Food Lion and Revco. The subject property is currently 97.86 percent
occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Clover is located in York County which is located in the north central portion
of the state. The town is served by US Highway #321 and SC Highway #55. Two
interstate highways are located nearby, with I-85 being 13 miles to the north
and I-77 being located 20 miles to the east. York is located ten miles to the
south; Gastonia is located 12 miles to the north; Charlotte is located 28 miles
to the northeast; and Rock Hill is located 21 miles to the southeast. The
unemployment rate for York County as of March, 1997 was 5.0% and South Carolina
had an unemployment rate of 5.5%. The population of York County in 1995 (most
recent) was 143,825 and 10.8 percent of the population were over 65 years of
age. The average per capita income was $18,617 in 1993 (most recent). Retail
sales in the county totaled $896 million for 1992.
Neighborhood and Site
The subject neighborhood is located in the eastern portion of the Town of
Clover. The subject site and adjacent properties were annexed into the Town of
Clover around the time of construction of the subject. The major traffic artery
running through the neighborhood is Bethel Street, which is also SC Highway #55.
This is the major thoroughfare which connects the Town of Clover with Rock Hill
via SC Highway #274. Several single family dwellings are located in the subject
neighborhood. Multi-family properties in the area include the Yorktown
Apartments and Stonegate Apartments (to the rear of subject). Commercial uses
include Killian's Service Center, which is located across the street from
subject, Clover Chevrolet-Geo, McLean's Garage, Charleston Family Seafood, and
Nicol's Amoco convenience market/self-service gasoline station. The Clover
School District Administrative Building, Clover High School and Clover Junior
High are relatively new facilities that are located one mile from subject.
Commercial properties are concentrated on the major thoroughfares with
residential properties being located off of these thoroughfares. The
intersection of Main Street and Bethel Street is more or less the middle of the
downtown area of Clover. There is a shopping center located on the west side of
South Main Street, approximately one block from the intersection with Bethel
Street. Tenants in this center are Community Cash, Rite Aid Drugs and Family
Dollar. There are also several convenience markets, such as Fast Fare, located
along Main Street, as well as Hardee's and several privately owned restaurants.
Physical features are as follows:
1. Size 6.31 acres or 274,864 square feet
2. Identity 809 Bethel Road
TMS #10-3-8-22
3. Shape irregular
4. Topography generally level, below street grade to the rear of
site
5. Accessibility good from either direction
6. Utilities municipal
1
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 45,575 square feet
2. Layout & Design 1 story-food store, drug store and six shops
3. Parking Spaces 263
5.77 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block on side
and rear and metal seamed roof
Market Position and Marketability Conclusions
The Town of Clover contains two retail structures. In addition to the subject,
there is a shopping center located on the west side of South Main Street,
approximately one block from the intersection with Bethel Street. Tenants in
this center are Community Cash, Rite Aid Drugs and Family Dollar. It is,
however, a much older center than subject and not considered comparable. No new
properties are under construction or planned for this area at this time.
The City of York is located approximately ten miles to the south of Clover and
is considered to be slightly larger. The York Village is located in York and
contains 39,585 square feet. It was constructed in 1981 with Food Lion and
Eckerd Drugs as the anchor tenants and three smaller shops. This center is
currently 100 percent occupied. The rental range is from $4.00 to $7.00 per
square foot. Another center, York Plaza, is located across Liberty Street from
the York Village. This center was constructed in 1973 and expanded in 1992 to
contain 70,100 square feet. The anchor tenants for this center are Bi-Lo and
Revco. There are five smaller shops with such tenants as Radio Shack, Family
Dollar and Advance Auto. The rental rate range for this center is $4.00 to
$6.00. It is also 100 percent occupied as of the date of this study. There is
currently one center planned in York at the intersection of US Highway #321 and
SC Highway #161. It will contain a Winn Dixie Marketplace and local shops.
The City of Gastonia is located approximately 12 miles to the north of Clover
and is considered larger than Clover. It is also in relatively close proximity
to Charlotte, North Carolina. There are more than 20 shopping centers located in
Gastonia with the most comparable to subject being included in this study. The
Food Lion Plaza is located at the intersection of Neal Hawkins Road and Union
Road. This center contains 60,000 square feet with Food Lion as the anchor
tenant. There are also eleven smaller shops with a rental range of $8.00 to
$11.00 per square foot. This center is currently 100 percent occupied. The
Robinwood Crossing Shopping Center is also located in Gastonia adjacent to the
Food Lion Plaza with Harris Teeter and Eckerd Drugs as major tenants. It was
constructed in 1984 and expanded in 1992. There is one vacant store in this
center that was previously occupied by Rakin Hardware. The size is 49,900 square
feet with a rental rate range of $10.00 to $12.00 per square foot. The Union
Hudson Crossing is a center that was constructed in 1992 and contains 61,000
square feet. Anchor tenants are Bi-Lo and Revco Drugs with a rental rate range
of $8.50 to $11.00 per square foot for the seven shops. The Davis Park Center
was constructed in 1992 and contains 42,680 square feet of space. The major
tenant in this center is Bi-Lo with three smaller shops that have a rental rate
range of $6.50 to $7.75 per square foot. This center is currently 100 percent
occupied. The Diane 29 Shopping Center is located on US Highway #29/74 at
Edgewood Road. It contains 29,000 square feet of leaseable area with Food Lion
being the anchor tenant. It was built in 1992 and has a rental rate range of
$8.00 to $11.50 per square foot.
The subject property is in the middle of the neighborhood in the Town of Clover.
The location of subject is convenient to the single family and multi-family
dwellings that are located throughout the neighborhood. SC Highway #55 is the
major traffic artery running through the area.
2
<PAGE>
Six shops in the subject property have rental rates ranging from $7.60 to $9.50
per square foot. These are thought to be reasonable rental rates for the
neighborhood because this center is the newest in Clover and has maintained a
relatively high occupancy rate.
The rental rate for the Food Lion is $5.46 per square foot while the Revco Drug
Store pays $7.08 per square foot. Overage rentals are being received from both
anchor tenants.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the eastern section of the Town of Clover.
The neighborhood is continuing to develop and contains several single family and
multi-family dwellings. Commercial developments are located along the major
traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
<S> <C> <C> <C>
1. Identification
a. Name Clover Plaza York Village York Plaza
-------------------- -------------------- --------------------
b. Street 809 Bethel Road Liberty Street Liberty Street
-------------------- -------------------- --------------------
c. City Clover, SC York, SC York, SC
-------------------- -------------------- --------------------
d. Distance from subject N/A 10 miles 10 miles
-------------------- -------------------- --------------------
e. Contact Edens & Avant, Inc. McQueen Properties Garrett & Garrett
-------------------- -------------------- --------------------
f. Phone (803) 779-4420 (704) 372-2768 (864) 862-3501
-------------------- -------------------- --------------------
2. Attributes
a. Year built 1990 1981 1973, Expanded 1992
-------------------- -------------------- --------------------
b. Net sq. Ft. 45,575 39,585 70,100
-------------------- -------------------- --------------------
c. # building 1 1 1
-------------------- -------------------- --------------------
d. #stories 1 1 1
-------------------- -------------------- --------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A
-------------------- -------------------- --------------------
f. # elevators N/A N/A N/A
-------------------- -------------------- --------------------
g. Parking Adequate Adequate Adequate
-------------------- -------------------- --------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
-------------------- -------------------- --------------------
I. Vacancy % 2.14% 0% 0%
-------------------- -------------------- --------------------
j. Anchors, if Retail Food Lion, Revco Food Lion, Eckerd Bi-Lo, Revco
-------------------- -------------------- --------------------
</TABLE>
COMPARABLE 3 COMPARABLE 4
1. Identification
a. Name Davis Park Center Robinwood Crossing
-------------------- ---------------------
W. Hudson Blvd at Neal Hawkins at
b. Street Davis Park Road Union Road
-------------------- ---------------------
c. City Gastonia, NC Gastonia, NC
-------------------- ---------------------
d. Distance from subject 15 miles 15 miles
-------------------- ---------------------
e. Contact Hampton Dev. Co.
-------------------- ---------------------
f. Phone (803) 232-3210 (704) 375-1000
-------------------- ---------------------
2. Attributes
a. Year built 1993 1984, Expanded 1992
-------------------- ---------------------
b. Net sq. Ft. 42,680 49,900
-------------------- ---------------------
c. # building 1 1
-------------------- ---------------------
d. #stories 1 1
-------------------- ---------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A
-------------------- ---------------------
f. # elevators N/A N/A
-------------------- ---------------------
g. Parking Adequate Adequate
-------------------- ---------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
-------------------- ---------------------
I. Vacancy % 0% 15%
-------------------- ---------------------
j. Anchors, if Retail Bi-Lo Harris Teeter, Eckerd
-------------------- ---------------------
Comments: Comparables #1 and #2 are located in York, South Carolina which is a
small town slightly larger than Clover. Comparables #3 and #4 are
located in Gastonia, North Carolina which is significantly larger
than Clover and approximately 15 miles from Charlotte, North
Carolina. All of the comparables are experiencing 100 percent
occupancy rates at this time.
4
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
<TABLE>
<CAPTION>
B. RENTAL INFORMATION
SUBJECT COMPARABLE 1 COMPARABLE 2
<S> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A
------------------- ------------------- -------------------
b. Shop Space $7.60 - $9.50 $4.00 - $7.00 $4.00 - $6.00
------------------- ------------------- -------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
------------------- ------------------- -------------------
3. Rent Concessions None None None
------------------- ------------------- -------------------
4. Effective Rent $7.60 - $9.50 $4.00 - $7.00 $4.00 - $6.00
------------------- ------------------- -------------------
5. TI Allowance None None None
------------------- ------------------- -------------------
6. Expense Stop None None None
------------------- ------------------- -------------------
7. Length of Lease Term 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
------------------- ------------------- -------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00%
------------------- ------------------- -------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco Food Lion, Eckerd Bi-Lo, Revco
------------------- ------------------- -------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
------------------- ------------------- -------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A N/A
------------------- ------------------- -------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Similar Similar
------------------- ------------------- -------------------
</TABLE>
B. RENTAL INFORMATION
COMPARABLE 3 COMPARABLE 4
1. Asking Rental Rate
a. Anchor Space N/A N/A
------------------- ----------------------
b. Shop Space $6.50 - $7.75 $10.00 - $12.00
------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
------------------- ----------------------
3. Rent Concessions None None
------------------- ----------------------
4. Effective Rent $6.50 - $7.75 $10.00 - $12.00
------------------- ----------------------
5. TI Allowance None None
------------------- ----------------------
6. Expense Stop None None
------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shops) 3 - 5 years (shops)
------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
------------------- ----------------------
9. Percentage Rent
(per lease terms) Bi-Lo Harris Teeter, Eckerd
------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) Superior Superior
------------------- ----------------------
D. EXPLAIN RANKING/COMMENTS: Comparables #3 and #4 are ranked superior to
subject because they are located in a larger city
than subject. However, these centers are generally
similar in size and age.
5
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: York Village
Location: Liberty Street
York, SC
Year Built: 1981
Total Size: 39,585 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $4.00 - $7.00
Tenant Expenses: Triple Net
Remarks: Food Lion and Eckerd are the major tenants. Located on
Liberty Street which is a heavily traveled road.
6
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: York Plaza
Location: Liberty Street
York, SC
Year Built: 1973, Expanded 1992
Total Size: 70,100 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $4.00 - $6.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Bi-Lo and Revco. This center is located
across the street from Comparable #1 and has operated at a
high occupancy rate.
7
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Davis Park Center
Location: W. Hudson Boulevard at Davis Park Road
Gastonia, NC
Year Built: 1993
Total Size: 42,680 SF
Vacant Space: None
Vacancy Rate: 0%
Average Rental Rate: $6.50 - $7.75
Tenant Expenses: Triple Net
Remarks: This center was constructed in 1993 and has Bi-Lo as the
major tenant.
8
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Robinwood Crossing
Location: Neal Hawkins at Union Road
Gastonia, NC
Year Built: 1984, Expanded in 1992
Total Size: 49,900 SF
Vacant Space: 7,485 SF
Vacancy Rate: 15%
Average Rental Rate: $10.00 - $12.00
Tenant Expenses: Triple Net
Remarks: This center was constructed in 1984 and expanded in 1992.
Harris Teeter and Eckerd are the major tenants. Rakin
Hardware has vacated their store.
9
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
<TABLE>
<CAPTION>
II. SALES COMPARABLES
SUBJECT COMPARABLE 1 COMPARABLE 2
<S> <C> <C> <C>
1. Identification
a. Name Clover Plaza Davis Park Center Belmont Village
---------------- -------------------- -------------------
W. Hudson Blvd. at Wilkinson Blvd. at
b. Street Address 809 Bethel Road Davis Park Road North Main Street
---------------- -------------------- -------------------
c. City Clover, SC Gastonia, NC Belmont, NC
---------------- -------------------- -------------------
d. Distance from Subject N/A 15 miles 25 miles
---------------- -------------------- -------------------
2. Attributes
a. Year Built 1990 1993 1994
---------------- -------------------- -------------------
b. Net sq. feet 45,575 42,680 60,003 SF
---------------- -------------------- -------------------
c. # Buildings 1 1 1
---------------- -------------------- -------------------
d. # of Stories 1 1 1
---------------- -------------------- -------------------
e. Vacancy % 2.14% 0% 0%
---------------- -------------------- -------------------
3. Sales Information
a. Sales Price N/A $3,150,000 $5,050,000
---------------- -------------------- -------------------
b. Sales Price PSF N/A $66.34 $84.16
---------------- -------------------- -------------------
c. Date N/A 12-30-94 11-03-94
---------------- -------------------- -------------------
d. Cap. Rate N/A 10.1% 9.8%
---------------- -------------------- -------------------
e. NOI at time of Sale N/A $317,187 $496,750
---------------- -------------------- -------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A Superior Superior
---------------- -------------------- -------------------
</TABLE>
II. SALES COMPARABLES
COMPARABLE 3 COMPARABLE 4
1. Identification
a. Name One Norman Center Paw Creek Commons
---------------------- ---------------------
19706 One Norman Blvd. E/S Little Rock Road
b. Street Address at Freedom Drive
---------------------- ---------------------
c. City Cornelius, NC Charlotte, NC
---------------------- ---------------------
d. Distance from Subject 45 miles 30 miles
---------------------- ---------------------
2. Attributes
a. Year Built 1993 1996
---------------------- ---------------------
b. Net sq. feet 54,185 SF 66,050 SF
---------------------- ---------------------
c. # Buildings 1 1
---------------------- ---------------------
d. # of Stories 1 1
---------------------- ---------------------
e. Vacancy % 6.98% 2.73%
---------------------- ---------------------
3. Sales Information
a. Sales Price $4,650,000 $5,384,000
---------------------- ---------------------
b. Sales Price PSF $85.82 $77.52
---------------------- ---------------------
c. Date 10-12-95 03-25-97
---------------------- ---------------------
d. Cap. Rate 9.68% $517,412
---------------------- ---------------------
e. NOI at time of Sale $474,591 9.61%
---------------------- ---------------------
4. Rank Relative to Subject
(inferior, similar,
superior) Similar Superior
---------------------- ---------------------
Explain Ranking/Comments: Comparables #1 and #4 are ranked superior to subject
because they are located in larger cities and are
newer centers than subject. Comparable #2 is ranked
superior because it is larger than subject and newer.
Comparable #3 is believed to be similar to subject
being located in a small town and being approximately
the same size.
10
<PAGE>
COMPARABLE SHOPPING CENTER SALES
================================================================================
Comparable Sale No. 1
[GRAPHIC OMITTED]
NAME Davis Park Center
LOCATION NW Corner W. Hudson Blvd. & Davis Park Rd.
Gastonia, Gaston County, NC
GRANTOR P. Edwin Good, et al
GRANTEE US Retail Income Fund, LP
DEED REFERENCE Book 2427, Page 543
DATE Dec 30, 1994
SALES PRICE $3,150,000
ADJUSTED SALES PRICE $3,150,000
SIZE BUILDING 47,480
SALES PRICE PER S.F. $66.34
SIZE LAND (ACRES) 4.90
SIZE LAND (S.F.) 213,444
YEAR BUILT 1993
LAND/BUILDING RATIO 4.50 To 1
UTILITIES All Available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to Seller - Loan assumption from Jefferson-Pilot
EFFECTIVE GROSS INCOME $341,378
GROSS INCOME MULTIPLE 9.23
EGIM 9.23
NET OPERATING INCOME $317,187
OVERALL RATE 10.07%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood shopping center - Bi-Lo (42,680
SF; rent - $7.38/SF) is the major tenant. Local
tenants occupancy 4,800 SF. Their rents range from
$6.50 to $7.75 per square foot. The center was 100
percent occupied and in excellent condition at the
time of sale.
(434)
11
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Belmont Village
LOCATION NE Corner Wilkinson Blvd. (US Hwy. #74) & North Main St.
Belmont, Gaston County, NC
GRANTOR Belmont Investments, LP
GRANTEE US Retail Income Fund, LP
DEED REFERENCE Book 2419, Page 989
DATE Nov 3, 1994
SALES PRICE $5,050,000
ADJUSTED SALES PRICE $5,050,000
SIZE BUILDING 60,003
SALES PRICE PER S.F. $84.16
SIZE LAND (ACRES) 6.77
SIZE LAND (S.F.) 294,901
YEAR BUILT 1994
LAND/BUILDING RATIO 4.91 To 1
UTILITIES All Available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to Seller
EFFECTIVE GROSS INCOME $526,823
EGIM 9.59
NET OPERATING INCOME $496,750
OVERALL RATE 9.84%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood shopping center. Bi-Lo is the
major tenant (42,680 SF). Six local shops (7,672 SF).
Advanced Auto Parts Store built on outparcel.
(433)
12
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
13
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,384,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.61%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie and
Revco. Blockbuster occupies a store containing 5,500
square feet at $11.20 per square foot. Rents on shops
range from $13.00 to $14.00 per square foot. Anchor
income is 79.41 percent of gross income.
(793)
14
<PAGE>
ADDENDA
o York County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
15
<PAGE>
USA COUNTIES 1996
Geographic Area: York, SC (45091)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 .................................................... 143,825
Percent 65 years and over.............................. 10.8
1990 .................................................... 131,497
1980 .................................................... 106,720
Occupied housing units, 1990................................. 47,006
Percent owner occupied.................................... 71.9
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993................................................. 1,974
Per 1,000 resident population............................. 14.2
Percent to mothers under 20 years of age.................. 15.7
Deaths, 1993................................................. 1,160
Per 1,000 resident population............................. 8.3
Infant deaths per 1,000 live births, 1993.................... 11.7
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990.............................. 81,753
Percent high school graduates............................. 67.5
Percent college graduates................................. 16.9
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994................................... 79,049
Percent unemployed........................................ 5.0
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993................................... 3,086
Percent retail trade...................................... 25.8
Percent services.......................................... 33.0
Paid employees, 1993 (pay period including March 12)......... 41,162
Annual payroll, 1993 ($1,000)................................ 936,115
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000)......................... 2,590,370
Per capita (dollars)...................................... 18,617
AGRICULTURE (Bureau of the Census)
Number of farms, 1992........................................ 677
Land in farms as percent of total land.................... 28
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000).................................. 896,368
Per capita (dollars)...................................... 6,551
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994............................. 41
Total deposits ($1,000)................................... 734,825
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993.............. 21,490
Retired workers........................................... 13,610
Supplementary Security Income recipients, December 1994...... 2,213
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars)............................................ 2,350
1990 (dollars)............................................ 1,766
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
[GRAPHIC OMITTED]
Site Plan
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 124
Property: CLOVER PLAZA
809 BETHEL ROAD
CLOVER, SC 29710-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLOVER PLAZA WASHERETTE
JAMES F. CARROLL 652- 10 1,625 01/01/96 12/31/00 7.90 01/01/96 12,837.60
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------------
DOLLAR STORE
STEPHEN GIBSON 652- 20 1,300 04/25/95 10/31/99 7.60 05/01/95 9,879.96
- --------------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP.
SUBWAY REAL ESTATE CORP. 652- 30 1,300 09/01/91 08/31/99 0.00 0.00
0.00 0.00
0.00 0.00
9.00 04/01/93 11,700.00
9.50 09/01/96 12,349.92
9.75 09/01/97 12,675.00
10.00 09/01/98 12,999.96
- --------------------------------------------------------------------------------------------------------------------------
TONY'S PIZZA
TONY'S PIZZA 652- 40 1,300 01/01/91 01/31/99 0.00 0.00
8.15 02/01/91 10,596.00
0.00 0.00
8.75 02/01/96 11,375.04
- --------------------------------------------------------------------------------------------------------------------------
Available 652- 50 975 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLOVER PLAZA WASHERETTE
JAMES F. CARROLL Full 0 Full 0 Full 0 01/01/01 12/31/05 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
DOLLAR STORE
STEPHEN GIBSON Full 0 Full 0 Full 0 0.00 5.00 197,600 Y
- ------------------------------------------------------------------------------------------------------------------------------------
SUBWAY REAL ESTATE CORP.
SUBWAY REAL ESTATE CORP. Full 0 Full 0 Full 0 09/01/94 08/31/96 8.30 0.00 0
09/01/96 08/31/99 9.50 0.00 0
09/01/99 08/31/02 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
TONY'S PIZZA
TONY'S PIZZA Full 0 Full 0 Full 0 02/01/96 01/31/99 0.00 5.00 300,000
02/01/99 01/31/02 0.00 5.00 0
0.00 5.00 0
0.00 5.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 125
Property: CLOVER PLAZA
809 BETHEL ROAD
CLOVER, SC 29710-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #841
FOOD LION, INC. 652- 70 29,000 08/11/90 08/10/10 0.00 0.00
4.96 10/01/90 143,750.04
0.00 0.00
5.46 01/10/97 158,375.04
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------------
REVCO #4036
REVCO DISCOUNT DRUG CENTERS, 652- 80 8,450 08/01/90 07/31/00 7.08 09/01/90 59,826.00
0.00 0.00
0.00 0.00
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------------
CLOVER DRYCLEANING
YONG KI KIM 652- 90 1,625 12/01/96 11/30/99 1.55 11/25/96 2,518.68
7.75 12/01/96 12,593.76
- --------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 44,600 Current Annual Base Rent 277,237.32
Available. 975
Total..... 45,575
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #841
FOOD LION, INC. Full 0 PRS 1995 Full 0 08/11/35 08/10/40 5.46 1.00 0 Y
08/11/45 08/10/50 5.46 0.01 257,879 Y
08/11/10 08/10/15 5.46 0.01 0 Y
08/11/15 08/10/20 5.46 0.01 1583750400 Y
08/11/20 08/10/25 5.46 0.01 0 Y
08/11/25 08/10/30 5.46 0.01 0 Y
08/11/30 08/10/35 5.46 0.01 0 Y
08/11/40 08/11/45 5.46 0.01 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
REVCO #4036
REVCO DISCOUNT DRUG CENTERS, Full 0 Full 0 Full 0 08/01/00 07/31/05 7.08 2.00 1,976,666
08/01/05 07/31/10 7.08 2.00 0
08/01/10 07/31/15 7.08 2.00 0
08/01/15 07/31/20 7.08 2.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CLOVER DRYCLEANING
YONG KI KIM Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Bethel Road - Facing West
[GRAPHIC OMITTED]
Bethel Road - Facing East
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject Property
[GRAPHIC OMITTED]
Front View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
View of Entrance from Bethel Road
[GRAPHIC OMITTED]
Side and Rear View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
PHOTOGRAPH OF PROPOSED PROPERTY
[GRAPHIC OMITTED]
View of Site of Proposed Winn Dixie Marketplace and Shops in York, SC
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
TRI-COUNTY PLAZA
SHOPPING CENTER
1075 Franklin Springs Road
Royston/Franklin Springs,
Franklin County, Georgia
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 8, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS, CO., INC.]
May 12, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Tri-County Plaza
1075 Franklin Springs Road
Royston/Franklin Springs, Franklin County, Georgia
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 8,1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 63,510 square
feet of leaseable area. The center was constructed in 1986 and the anchor tenant
is Bi-Lo. Rite Aid has vacated their 6,720 square foot store. The subject
property is currently 89.4 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
----------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Franklin County is located in northeast Georgia in the foothills of the
Appalachian Mountains on Lake Hartwell. The county is served by I-85, which
links Atlanta's metro area with Greenville, South Carolina and with Charlotte,
North Carolina. Atlanta's center is 80 miles to the southwest, while Greenville
is 49 miles and Charlotte is 146 miles to the northeast. The county seat is
located in the center of the county at Carnesville. Other incorporated cities in
Franklin County are Lavonia (9 miles northeast), Canon (10 miles east), Royston
(10 miles southeast), and Franklin Springs (8 miles southeast). Royston and
Franklin Springs are adjacent cities. Franklin County is served by I-85 and US
Highway #29, along with numerous Georgia Highways. Total public road mileage is
652, with 417 miles being paved, ranking it in the top third of Georgia's
counties for percent paved. The unemployment rate for Franklin County as of 1994
was 5.0% and Georgia had an unemployment rate of 5.2%. The population of
Franklin County in 1995 (most recent) was 17,701 and 15.5 percent of the
population were over 65 years of age. The average per capita income was $17,529
in 1993 (most recent). Industry and agricultural play an important role in the
Franklin County economy. Retail sales in the county totaled $144 million for
1992. Also, 44 percent of the land in the county is attributed to farming.
Neighborhood and Site
The subject neighborhood is located in the southeastern portion of Franklin
County in the cities of Royston and Franklin Springs. The Ty Cobb Memorial and
Emmanuel College are located in the subject neighborhood. One shopping center in
addition to the subject property is located in the neighborhood, with that being
Dill's Plaza located on the south side of US Highway #29, just east of the
subject property. This center is approximately 25 years old and has a local
supermarket as the major tenant. Although it is 100 percent occupied at the time
of this study, rents in this center are very low in comparison with the rents
that would be associated with a newer shopping center. Other commercial uses
include Burger King, Arby's, Amoco convenience market/self-service gasoline
station, Western Auto, Watkin's Chevrolet-Olds, Tri-City Motors, BP and Huddle
House. Commercial properties are concentrated on the major thoroughfares with
residential properties being located off of these thoroughfares. The major
traffic artery running through the neighborhood would be US Highway #29. This is
a heavily traveled road running in an east-west direction. Construction was
completed a few years ago to widen this highway from two to three lanes through
the neighborhood, in order to alleviate some of the traffic congestion.
Physical features are as follows:
1. Size 12.263 acres or 534,176 square feet
2. Identity 1075 Franklin Springs Road
TMS #178-63 and #178-63A
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
1
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 63,510 square feet
2. Layout & Design 1 story-food store, vacant drug store, nine
shops
3. Parking Spaces 322
5.07 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block on
side and rear and metal seamed roof
Market Position and Marketability Conclusions
The City of Royston contains two retail structures. In addition to the subject,
Dill's Plaza is located in Royston and contains 76,000 square feet. It was
constructed in 1971. Dill's Food City is the anchor tenant in this center with
21 shops. Presently, this center is 100 percent occupied with rental rates
ranging from $2.00 to $3.00. No new properties are under construction or planned
for this area at this time.
The City of Lavonia is located approximately 12 miles to the north of Royston
and is considered to be approximately the same size as Royston. It contains
three shopping centers. The Silo Shopping Center contains 56,720 square feet and
was constructed in 1986. Lavonia Foods, Farmer's Furniture and Rite Aid are the
anchor tenants in this center with seven smaller shops. This center is currently
100 percent occupied. The rental range is from $6.00 to $7.00 per square foot.
Another Dill's Plaza is located in Lavonia with the anchor tenant being Dill's
Food City. There are seven smaller shops and the rental rate range for this
center is thought to be approximately $2.00 to $3.00. It is also 100 percent
occupied as of the date of this study. The third center located in Lavonia is
the Suburban Shopping Center which first opened in 1962 and contains
approximately 23,600 square feet. There are eight small shops in addition to the
anchor tenant which is Foodland. The rental range for this center is from $2.00
to $3.00 per square foot.
The City of Toccoa is located approximately 35 miles to the northwest of Royston
and is slightly larger than Royston. It contains five shopping centers and a
free-standing Wal-Mart store. The Stephens Plaza is located on the major
thoroughfare in Toccoa, Big A Road. This center first opened in 1989 and
contains 47,850 square feet with Bi-Lo as the anchor tenant. There are also nine
smaller shops with a rental range of $6.00 to $11.30 per square foot. This
center is currently 100 percent occupied. The Towne Plaza is also located in
Toccoa on Big A Road with Quality Foods and Eckerd Drugs as major tenants. It
was constructed in 1975. There are four vacant stores in this center and
Wal-Mart vacated its store several years ago. The Toccoa Plaza is an older
center that is in need of renovation. The YMCA occupies a store as well as the
Salvation Army. Bi-Lo and Eckerd Drugs vacated this center as did most of the
shops afterward. The Big A Shopping Center was constructed in 1973 and contains
90,000 square feet of space. The major tenant in this center is Save-A-Lot and
there are two vacant stores. The Ingles Plaza is one of the newest centers in
Toccoa having been built in 1986. Ingles, Revco and a free-standing Belk store
are the tenants in this center. In the late 1980's, a tornado damaged the Revco
center which was subsequently rebuilt.
The subject property is in the middle of the neighborhood. The location of
subject is convenient to the single family dwellings that are located throughout
the neighborhood. US Highway #29 is the major traffic artery running through the
area.
2
<PAGE>
The subject property has nine shops with rental rates ranging from $2.00 to
$10.00 per square foot. These are thought to be reasonable rental rates for the
neighborhood because this center is the newest in Royston and has maintained a
relatively high occupancy rate.
The rental rate for the Bi-Lo is $5.15 per square foot while the Rite Aid Drug
Store is currently vacant. Overage rentals are being received from Bi-Lo.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the southeastern section of Franklin County.
The neighborhood is continuing to develop and contains several single family
dwellings. Commercial developments are located along the major traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Tri-County Plaza Dill's Plaza Silo Shopping Center Stephens Plaza
--------------------- -------------------- ---------------------------- ---------------------
b. Street Cook Street at
1075 Franklin Springs Highway #29 I-85 at Highway #17 Big A Road
--------------------- -------------------- ---------------------------- ---------------------
c. City Royston, GA Royston, GA Lavonia, GA Toccoa, GA
--------------------- -------------------- ---------------------------- ---------------------
d. Distance from subject N/A 1/2 mile 18 miles 35 miles
--------------------- -------------------- ---------------------------- ---------------------
e. Contact
Edens & Avant, Inc. Anderson Dilworth N/A Edens & Avant, Inc.
--------------------- -------------------- ---------------------------- ---------------------
f. Phone (803) 779-4420 (414) 245-8423 N/A (803) 779-4420
--------------------- -------------------- ---------------------------- ---------------------
2. Attributes
a. Year built 1986 1971 1986 1989
--------------------- -------------------- ---------------------------- ---------------------
b. Net sq. Ft. 63,510 76,000 56,720 47,850
--------------------- -------------------- ---------------------------- ---------------------
c. # building 1 2 1 1
--------------------- -------------------- ---------------------------- ---------------------
d. #stories 1 1 1 1
--------------------- -------------------- ---------------------------- ---------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
--------------------- -------------------- ---------------------------- ---------------------
f. # elevators N/A N/A N/A N/A
--------------------- -------------------- ---------------------------- ---------------------
g. Parking Adequate Adequate Adequate Adequate
--------------------- -------------------- ---------------------------- ---------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
--------------------- -------------------- ---------------------------- ---------------------
I. Vacancy % 10.6% 0% 0% 0%
--------------------- -------------------- ---------------------------- ---------------------
j. Anchors, if Retail Bi-Lo Dill's Food City Farmers Furniture, Rite Aid Bi-Lo
--------------------- -------------------- ---------------------------- ---------------------
</TABLE>
Comments: Comparable #1 is located in subject neighborhood. Comparables #2 and
#3 are located in towns similar to subject's in northeast Georgia. All
of the comparables are experiencing 100 percent occupancy rates at
this time.
4
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A N/A
--------------------- -------------------- ---------------------------- ----------------------
b. Shop Space $2.00 - $10.00 $2.00 - $3.00 $6.00 - $7.00 $6.00 - $11.30
--------------------- -------------------- ---------------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net
--------------------- -------------------- ---------------------------- ----------------------
3. Rent Concessions None None None None
--------------------- -------------------- ---------------------------- ----------------------
4. Effective Rent $2.00 - $10.00 $2.00 - $3.00 $6.00 - $7.00 $6.00 - $11.30
--------------------- -------------------- ---------------------------- ----------------------
5. TI Allowance None None None None
--------------------- -------------------- ---------------------------- ----------------------
6. Expense Stop None None None None
--------------------- -------------------- ---------------------------- ----------------------
7. Length of Lease Term 3 years (shops) 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
--------------------- -------------------- ---------------------------- ----------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00%
--------------------- -------------------- ---------------------------- ----------------------
9. Percentage Rent
(per lease terms) Bi-Lo Dill's Food City Farmers Furniture, Rite Aid Bi-Lo
--------------------- -------------------- ---------------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A
--------------------- -------------------- ---------------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes)
N/A N/A N/A N/A
--------------------- -------------------- ---------------------------- ----------------------
C. RANK RELATIVE TO SUBJECT
(inferior, similar,
superior) N/A Inferior Similar Similar
--------------------- -------------------- ---------------------------- ----------------------
</TABLE>
D.EXPLAIN RANKING/COMMENTS: Subject is located in smaller city than Comparable
#3. However, the centers are generally similar in
size and number of tenants. Comparable #1 is ranked
inferior to subject because it is an older center
than subject. The rental rates that are being
received are lower than those of subject. The other
shopping centers have been rated as similar and are
thought to be so with subject.
5
<PAGE>
LOCAL RENTAL COMPARABLES
- ------------------------
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Dill's Plaza
Location: Cook Street at Highway #29
Royston, GA
Year Built: 1971
Total Size: 76,000 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $2.00 - $3.00
Tenant Expenses: Triple Net
Remarks: Dill's Food City is the major tenant. Located on US Highway
#29 and Cook Street which are heavily traveled roads.
6
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Silo Shopping Center
Location: I-85 at Highway #17
Lavonia, GA
Year Built: 1986
Total Size: 56,720
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $6.00 - $7.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Farmer's Furniture and Rite Aid Pharmacy.
This is one of the newest centers in Lavonia and has
operated at a high occupancy rate.
7
<PAGE>
Comparable Rental No. 3
================================================================================
Name: Stephens Plaza
Location: Big A Road
Toccoa, GA
Year Built: 1989
Total Size: 47,850 SF
Vacant Space: None
Vacancy Rate: 0%
Average Rental Rate: $6.00 - $11.30
Tenant Expenses: Triple Net
Remarks: This center was constructed in 1989 and is one of the
newest centers in Toccoa. Bi-Lo is the major tenant.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
II. SALES COMPARABLES
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
Lexington Triangle
a. Name Tri-County Plaza Barnwell Plaza Village Hampton Plaza
---------------------- -------------------- ----------------------- -------------------
2864 Wilma Randolph
b. Street Address 1075 Franklin Springs 1019 Dunbarton Blvd. Sunset Blvd. & Lake Dr. Blvd.
---------------------- -------------------- ----------------------- -------------------
c. City Royston, GA Barnwell, SC Lexington, SC Clarksville, TN
---------------------- -------------------- ----------------------- -------------------
d. Distance from Subject N/A 120 miles 100 miles 200 miles
---------------------- -------------------- ----------------------- -------------------
2. Attributes
a. Year Built 1986 1985 1985 1988
---------------------- -------------------- ----------------------- -------------------
b. Net sq. feet 63,510 70,725 115,754 189,302
---------------------- -------------------- ----------------------- -------------------
c. # Buildings 1 1 1 1
---------------------- -------------------- ----------------------- -------------------
d. # of Stories 1 1 1 1
---------------------- -------------------- ----------------------- -------------------
e. Vacancy % 10.6% 9.00% 1.3% 0%
---------------------- -------------------- ----------------------- -------------------
3. Sales Information
a. Sales Price N/A $2,860,620 $4,489,380 $6,150,000
---------------------- -------------------- ----------------------- -------------------
b. Sales Price PSF N/A $40.45 $38.78 $23.24
---------------------- -------------------- ----------------------- -------------------
c. Cap. Rate N/A 01-01-95 01-31-95 12-26-95
---------------------- -------------------- ----------------------- -------------------
d. Date N/A 330,327 480,919 753,627
---------------------- -------------------- ----------------------- -------------------
e. NOI at time of Sale N/A 11.55% 10.71% 12.25%
---------------------- -------------------- ----------------------- -------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A similar similar superior
---------------------- -------------------- ----------------------- -------------------
</TABLE>
SUBJECT COMPARABLE 4
------- ------------
1. Identification
a. Name Tri-County Plaza Cumberland Plaza
---------------------- ------------------
209 New Swithville
b. Street Address 1075 Franklin Springs Hwy.
---------------------- ------------------
c. City Royston, GA McMinnville, TN
---------------------- ------------------
d. Distance from Subject N/A 215 miles
---------------------- ------------------
2. Attributes
a. Year Built 1986 1988
---------------------- ------------------
b. Net sq. feet 63,510 143,951
---------------------- ------------------
c. # Buildings 1 1
---------------------- ------------------
d. # of Stories 1 1
---------------------- ------------------
e. Vacancy % 10.6% 4.3%
---------------------- ------------------
3. Sales Information
a. Sales Price N/A $5,225,050
---------------------- ------------------
b. Sales Price PSF N/A $36.30
---------------------- ------------------
c. Cap. Rate N/A 12-26-95
---------------------- ------------------
d. Date N/A 693,726
---------------------- ------------------
e. NOI at time of Sale N/A 13.28%
---------------------- ------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A superior
---------------------- ------------------
Explain Ranking/Comments: Comparables #3 and #4 are ranked superior to subject.
The reason for this is because of the size and
location of these comparables being superior to
subject. Comparable #1 is located in a commercial area
that is the same size as subject.
9
<PAGE>
COMPARABLE IMPROVED SALES
- -------------------------
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 072- 06- 04- 11, 20
NAME Barnwell Plaza
LOCATION 1019 Dunbarton Boulevard, Barnwell, SC
GRANTOR 1994 N1 SC Associates, LP
GRANTEE Tri Centers, LP
DEED REFERENCE Book 282/Page 137
DATE Jan 31, 1995
SALES PRICE $2,860,620
ADJUSTED SALES PRICE $2,860,620
SIZE BUILDING 70,725
SALES PRICE PER S.F. $40.45
SIZE LAND (ACRES) 11.28
SIZE LAND (S.F.) 491,357
YEAR BUILT 1985
LAND/BUILDING RATIO 6.95 To 1
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $399,045
GROSS INCOME MULTIPLE 7.17
EGIM 7.17
NET OPERATING INCOME $330,327
OVERALL RATE 11.55%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a good quality community shopping center
located in the town of Barnwell in Barnwell County
(pop. 20,000) in western South Carolina. Approximately
91% of the center was comprised of anchor space,
including Wal-Mart (34,875 SF), Food Lion (21,000 SF)
and Revco Drugs (8,450 SF). The income and expense
data here is based on the center's actual performance
at the time of sale, and include approximately $0.50
SF in overage rents from Wal-Mart and $0.10 SF in
reserves.
(590)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Lexington Triangle Village
LOCATION U.S. 378 and North Lake Drive (SC #6), Lexington, SC
GRANTOR 1994 N1 SC Associates
GRANTEE Tri Centers, LP
DEED REFERENCE Book 3260, Page 199
DATE Jan 31, 1995
SALES PRICE $4,489,380
ADJUSTED SALES PRICE $4,489,380
SIZE BUILDING 115,754
SALES PRICE PER S.F. $38.78
SIZE LAND (ACRES) 12.51
SIZE LAND (S.F.) 544,936
YEAR BUILT 1985
LAND/BUILDING RATIO 4.71 To 1
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $607,469
GROSS INCOME MULTIPLE 7.39
EGIM 7.39
NET OPERATING INCOME $480,919
OVERALL RATE 10.71%
TYPE OF PURCHASER Private Investor
COMMENTS: This center is anchored by Wal-Mart (65,904 SF) and
Food Lion (25,000 SF) and there are 7 local shops
totaling 24,850 SF (21.5 percent). At the time of
sale, the center was 98.7 percent occupied with only
2,000 SF vacant. Wal-Mart has a base rent of $3.55 and
the lease expires 11/05. Currently, Wal-Mart is paying
about $0.50 per SF overage rent and Wal-Mart is
expected to leave the center in the near future as no
expansion room is available. The estimated cap rate
excludes potential overage rent form Wal-Mart and only
excludes income from the 2,000 SF vacant bay.
Projected expenses include $0.10 per SF reserves. The
center is masonry with brick front and metal mansard
canopy roof and in average condition. No outparcels
were included with this sale.
(763)
11
<PAGE>
Comparable Sale No. 3
[GRAPHIC OMITTED]
NAME Hampton Plaza
LOCATION 2864 Wilma Rudolph Boulevard, Clarksville, TN
GRANTOR Aetna Life Insurance Company
GRANTEE Hampton II, LP
DEED REFERENCE Book 580, Page 1793
DATE Dec 26, 1995
SALES PRICE $6,150,000
ADJUSTED SALES PRICE $6,150,000
SIZE BUILDING 189,302
SALES PRICE PER S.F. $32.49
SIZE LAND (ACRES) 23.24
SIZE LAND (S.F.) 1,012,334
YEAR BUILT 1988
LAND/BUILDING RATIO 5.35 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Shopping Center District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $937,119
GROSS INCOME MULTIPLE 6.37
EGIM 6.56
NET OPERATING INCOME $753,627
OVERALL RATE 12.25%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center with Wal-Mart as a
major tenant prior to a new Wal-Mart Superstore being
built on the same block. While Wal-Mart remains liable
for the lease, the store is vacant. The remainder of
the center is occupied.
(759)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
NAME Cumberland Plaza
LOCATION 209 New Smithville Highway, McMinnville, TN
GRANTOR Aetna Life Insurance
GRANTEE Cumberland II, LP
DEED REFERENCE Book 287, Page 204
DATE Dec 26, 1995
SALES PRICE $5,225,050
ADJUSTED SALES PRICE $5,225,050
SIZE BUILDING 143,951
SALES PRICE PER S.F. $36.30
SIZE LAND (ACRES) 19.64
SIZE LAND (S.F.) 855,518
YEAR BUILT 1988
LAND/BUILDING RATIO 5.94 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Highway Commercial District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $875,830
GROSS INCOME MULTIPLE 5.79
EGIM 5.97
NET OPERATING INCOME $693,726
OVERALL RATE 13.28%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center. Wal-Mart was the
major tenant and remains liable for the lease for the
remaining term. A new Wal-Mart Superstore was built
one block west of this property.
(762)
13
<PAGE>
ADDENDA
o Franklin County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
USA COUNTIES 1996
Geographic Area: Franklin, GA (13119)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census)
Total resident population:
1995 ............................................................. 17,701
Percent 65 years and over ..................................... 15.5
1990 ............................................................. 16,650
1980 ............................................................. 15,185
Occupied housing units, 1990 ..................................... 6,365
Percent owner occupied ........................................ 78.0
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ..................................................... 255
Per 1,000 resident population ................................. 14.7
Percent to mothers under 20 years of age ...................... 20.4
Deaths, 1993 ..................................................... 205
Per 1,000 resident population ................................. 11.8
Infant deaths per 1,000 live births, 1993 ........................ 3.9
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 .................................. 10,891
Percent high school graduates ................................. 54.1
Percent college graduates ..................................... 9.5
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ....................................... 8,959
Percent unemployed ............................................ 5.0
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ....................................... 393
Percent retail trade .......................................... 30.3
Percent services .............................................. 27.0
Paid employees, 1993 (pay period including March 12) ............. 4,417
Annual payroll, 1993 ($1,000) .................................... 71,505
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................. 304,389
Per capita (dollars) .......................................... 17,529
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ............................................ 666
Land in farms as percent of total land ........................ 44
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ...................................... 144,644
Per capita (dollars) .......................................... 8,433
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ................................. 11
Total deposits ($1,000) ....................................... 222,782
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 .................. 4,125
Retired workers ............................................... 2,475
Supplementary Security Income recipients, December 1994 .......... 750
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................ 3,694
1990 (dollars) ................................................ 2,672
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Not applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
[GRAPHIC OMITTED]
Site Plan for TRI-COUNTY PLAZA
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 112
Property: TRI-COUNTY PLAZA - (NEW)
1075 FRANKLIN SPRINGS ROAD
ROYSTON, GA 30662-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BI-LO, INC. #173
BI-LO, INC. 647- 10 25,590 04/23/86 04/30/06 4.75 04/23/86 121,599.96
0.00 0.00
4.95 05/01/91 126,720.00
0.00 0.00
0.00 0.00
5.15 05/01/96 131,840.00
5.40 05/01/01 138,240.00
- ---------------------------------------------------------------------------------------------------------------------------
Available 647- 30 4,550 0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------------
VIDEO SUPERSTORE
SCOTT ENTERTAINMENT INC. 647- 30 4,550 11/01/94 10/31/97 0.00 0.00
0.00 0.00
4.25 11/01/92 19,337.40
4.50 11/01/93 20,475.00
5.00 11/01/94 22,752.00
- ---------------------------------------------------------------------------------------------------------------------------
VARIETY WHOLESALERS #804
VARIETY WHOLESALERS, INC. (MAX 647- 60 14,300 04/01/96 03/31/99 1.68 05/01/90 24,000.00
2.00 04/01/96 28,599.96
- ---------------------------------------------------------------------------------------------------------------------------
SHOE SHOW
THE SHOE SHOW OF ROCKY MOUNT, 647- 70 2,800 04/01/97 03/31/02 6.00 05/01/92 16,800.00
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BI-LO, INC. #173
BI-LO, INC. Full 0 Full 0 Full 0 05/01/06 04/30/16 5.95 0.75 16,213,000 Y
05/01/11 04/30/16 6.25 0.75 0 Y
05/01/16 04/30/21 6.55 0.75 16,896,000 Y
05/01/21 04/30/26 6.85 0.75 0 Y
05/01/26 04/30/31 7.20 0.75 0 Y
05/01/31 04/30/36 7.55 0.75 17,578,700 Y
0.00 0.75 18,432,000 Y
- ------------------------------------------------------------------------------------------------------------------------------------
Available 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
VIDEO SUPERSTORE
SCOTT ENTERTAINMENT INC. Full 0 Full 0 Full 0 11/01/97 10/31/00 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
VARIETY WHOLESALERS #804
VARIETY WHOLESALERS, INC. (MAX PRS 1990 PRS 1990 Full 0 0.00 3.00 800,000 Y
0.00 3.00 953,300 Y
- ------------------------------------------------------------------------------------------------------------------------------------
SHOE SHOW
THE SHOE SHOW OF ROCKY MOUNT, Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 113
Property: TRI-COUNTY PLAZA - (NEW)
1075 FRANKLIN SPRINGS ROAD
ROYSTON, GA 30662-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHOE SHOW
THE SHOE SHOW OF ROCKY MOUNT, 647- 70 2,800 04/01/97 03/31/02 6.80 04/01/97 19,040.04
- ---------------------------------------------------------------------------------------------------------------------------
CLOTHING STORE (TO BE NAMED)
RHONDA SORRELLS 647- 80 1,050 01/01/97 12/31/99 5.50 01/01/97 5,775.00
6.00 01/01/98 6,300.00
6.25 01/01/99 6,562.56
- ---------------------------------------------------------------------------------------------------------------------------
GOLDEN IMAGE
MR. WILLIAM WOODALL AND DENIS 647- 90 1,000 05/01/94 04/30/97 6.00 05/01/94 6,000.00
- ---------------------------------------------------------------------------------------------------------------------------
ADAM & EVE HAIR DESIGN
GRANT TYNER 647- 100 900 02/01/96 01/31/99 10.00 02/01/96 9,000.00
- ---------------------------------------------------------------------------------------------------------------------------
PIZZA KING
MR. DONALD E. JOHNSON 647- 110 1,800 06/01/94 05/31/97 0.00 0.00
0.00 0.00
4.50 06/01/94 8,100.00
5.00 06/01/95 9,000.00
6.00 06/01/96 10,800.00
- ---------------------------------------------------------------------------------------------------------------------------
PEKING PALACE
ANTHONY VUONG OF VUONG'S MANA 647- 130 3,600 01/15/94 08/31/98 0.00 0.00
0.00 0.00
4.60 09/01/93 16,560.00
6.77 05/01/94 24,360.00
7.27 09/01/96 26,160.00
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHOE SHOW
THE SHOE SHOW OF ROCKY MOUNT, Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CLOTHING STORE (TO BE NAMED)
RHONDA SORRELLS Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
GOLDEN IMAGE
MR. WILLIAM WOODALL AND DENIS Full 0 Full 0 Full 0 0.00 5.00 175,000
- ------------------------------------------------------------------------------------------------------------------------------------
ADAM & EVE HAIR DESIGN
GRANT TYNER Full 0 Full 0 Full 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
PIZZA KING
MR. DONALD E. JOHNSON Full 0 Full 0 Full 0 06/01/97 05/31/00 0.00 5.00 225,000
0.00 5.00 0
0.00 5.00 0
0.00 5.00 0
0.00 5.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
PEKING PALACE
ANTHONY VUONG OF VUONG'S MANA Full 0 Full 0 Full 0 09/01/98 08/31/03 0.00 3.00 592,000
0.00 3.00 0
0.00 3.00 0
0.00 3.00 0
0.00 3.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 114
Property: TRI-COUNTY PLAZA - (NEW)
1075 FRANKLIN SPRINGS ROAD
ROYSTON, GA 30662-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST FRANKLIN FINANCIAL CORP
1ST FRANKLIN FINANCIAL CORPOR 647- 160 1,200 09/01/94 08/31/99 0.00 0.00
6.00 09/01/92 7,200.00
0.00 0.00
7.00 09/01/94 8,400.00
8.00 09/01/97 9,600.00
- ---------------------------------------------------------------------------------------------------------------------------
Square Feet: Occ 56,790 Current Annual Base Rent 268,367.04
Ava 6,720
Total..... 63,510
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST FRANKLIN FINANCIAL CORP
1ST FRANKLIN FINANCIAL CORPOR PRS 1989 PRS 1989 Full 0 09/01/94 08/31/99 7.00 0.00 0
09/01/99 08/31/04 8.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
- -------------------------------
[GRAPHIC OMITTED]
US Highway #29 - Facing West
[GRAPHIC OMITTED]
US Highway #29 - Facing East
<PAGE>
[GRAPHIC OMITTED]
View of Entrance to Subject from US Highway #29
[GRAPHIC OMITTED]
View of Entrance to Subject from Springdale Drive
<PAGE>
[GRAPHIC OMITTED]
Front view of Subject Property
[GRAPHIC OMITTED]
Front View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Side View of Subject Property
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject Property
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
STEPHENS PLAZA
SHOPPING CENTER
328 South Big A Road
Toccoa, Stephens County, Georgia
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
May 8, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
May 12, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Stephens Plaza
328 South Big A Road
Toccoa, Stephens County, Georgia
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on May 8,1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 47,850 square
feet of leaseable area. The center was constructed in 1989 and the anchor tenant
is Bi-Lo with nine smaller shops. The subject property is currently 100 percent
occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
The City of Toccoa is the county seat of Stephens County, Georgia. It is located
in northeast Georgia adjacent to the South Carolina line at the head waters of
Lake Hartwell and is approximately 100 miles northeast of Atlanta's metro area
and 63 miles southwest of Greenville, South Carolina. Toccoa is on the main line
of Norfolk-Southern Railway and is 15 miles north of I-85. Highways serving the
area include US Highway #124, and Georgia Highways #13, #17, #106 and #184. The
unemployment rate for Stephens County as of 1994 was 5.1% and Georgia had an
unemployment rate of 5.2%. The population of Stephens County in 1995 (most
recent) was 25,000 and 15.9 percent of the population were over 65 years of age.
The average per capita income was $15,577 in 1993 (most recent). Retail sales in
the county totaled $171 million for 1992.
Neighborhood and Site
The subject neighborhood is located in the eastern central portion of Toccoa
around the intersection of Big A Road and Curreahee Street. The Toccoa Chamber
of Commerce is located in the subject neighborhood. Other commercial uses
include Wendy's, Arby's, Subway, Amoco and BP convenience markets/self-service
gasoline stations, Badcock Home Furnishings, Shoney's restaurant and inn, Taco
Bell, Little Ceasar's Pizza, Baskin Robbins, McDonald's, the Ingle's Plaza,
Pizza Hut and others. Commercial properties are concentrated on the major
thoroughfares with residential properties being located off of these
thoroughfares. A few of the residential subdivisions located in the subject
neighborhood include Hillendale, Meadowbrook, Pine Valley, Poplar Street, Valley
Drive, Green Acres and Ridgeview Heights. The major traffic artery running
through the neighborhood would be Georgia Highway #17 or Big A Road. This is a
heavily traveled road running in an southeast-northwest direction. The downtown
central business district is located just northwest of the subject neighborhood.
It is typical of most downtown sections with several municipal buildings such as
the Stephens County Courthouse, City Hall and Post Office. There is an open
pedestrian mall located along two blocks of the downtown area. The railroad
generally runs in an east-west direction, with the train station being located
in the downtown area. The subject neighborhood has historically been the
commercial sector of the county, with commercial developments dating back to the
1970's, such as the Big A Shopping Center.
Physical features are as follows:
1. Size 6.64 acres or 289,238 square feet
2. Identity 328 South Big A Road
TMS #T-20 Parcel #7
3. Shape irregular
4. Topography generally level, sloping downward from Big A Road
5. Accessibility good from either direction
6. Utilities municipal
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 47,850 square feet
2. Layout & Design 1 story-food store and nine shops
3. Parking Spaces 264
5.52 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block on side
and rear and metal seamed roof
Market Position and Marketability Conclusions
The City of Toccoa contains five shopping centers and a free-standing Wal-Mart
store. In addition to the subject, the Towne Plaza is also located in Toccoa on
Big A Road with Quality Foods and Eckerd Drugs as major tenants. It was
constructed in 1975. There are four vacant stores in this center and Wal-Mart
vacated its store several years ago. The Toccoa Plaza is an older center that is
in need of renovation. The YMCA occupies a store as well as the Salvation Army.
Bi-Lo and Eckerd Drugs vacated this center as did most of the shops afterward.
The Big A Shopping Center was constructed in 1973 and contains 90,000 square
feet of space. The major tenant in this center is Save-A-Lot and there are two
vacant stores. The Ingles Plaza is one of the newest centers in Toccoa having
been built in 1986. Ingles, Revco and a free-standing Belk store are the tenants
in this center. In the late 1980's, a tornado damaged the Revco center which was
subsequently rebuilt. No new properties are under construction or planned for
this area at this time.
The City of Lavonia is located approximately 20 miles to the south of Toccoa and
is considered to be smaller than Toccoa. It contains three shopping centers. The
Silo Shopping Center contains 56,720 square feet and was constructed in 1986.
Lavonia Foods, Farmer's Furniture and Rite Aid are the anchor tenants in this
center with seven smaller shops. This center is currently 100 percent occupied.
The rental range is from $6.00 to $7.00 per square foot. Dill's Plaza is located
in Lavonia with the anchor tenant being Dill's Food City. There are seven
smaller shops and the rental rate range for this center is thought to be
approximately $2.00 to $3.00. It is also 100 percent occupied as of the date of
this study. The third center located in Lavonia is the Suburban Shopping Center
which first opened in 1962 and contains approximately 23,600 square feet. There
are eight small shops in addition to the anchor tenant which is Foodland. The
rental range for this center is from $2.00 to $3.00 per square foot.
The subject property is in the middle of the neighborhood. The location of
subject is convenient to the single family and multi-family dwellings that are
located throughout the neighborhood. Georgia Highway #17 is the major traffic
artery running through the area.
The subject property has nine shops with rental rates ranging from $6.00 to
$11.30 per square foot. These are thought to be reasonable rental rates for the
neighborhood because this center is the one of the newest in Toccoa and has
maintained a relatively high occupancy rate. The rental rate for the Bi-Lo is
$5.95 per square foot. Overage rentals are being received from Bi-Lo.
The subject property is presently operating at a high occupancy rate. The
location of subject is strategic within the neighborhood and convenient to the
shoppers throughout the neighborhood.
Trends
The subject property is located in the eastern central section of Toccoa. The
neighborhood is continuing to develop and contains several single family as well
as multi-family dwellings. Commercial developments are located along the major
traffic arteries.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
<TABLE>
<CAPTION>
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Stephens Plaza Towne Plaza Big A SHC Silo Shopping Center
-------------------- ---------------------- --------------------- ----------------------------
Big A Road at
b. Street Big A Road South Big A Road Collins Road I-85 at Highway #17
-------------------- ---------------------- --------------------- ----------------------------
c. City Toccoa, GA Toccoa, GA Toccoa, GA Lavonia, GA
-------------------- ---------------------- --------------------- ----------------------------
d. Distance from subject N/A 1/2 mile 1/2 mile 20 miles
-------------------- ---------------------- --------------------- ----------------------------
e. Contact Edens & Avant, Inc. George Bright Blake P. Garrett, Jr. N/A
-------------------- ---------------------- --------------------- ----------------------------
f. Phone (803) 779-4420 (423) 755-8830 (864) 862-3501 N/A
-------------------- ---------------------- --------------------- ----------------------------
2. Attributes
a. Year built 1989 1975 1973 1986
-------------------- ---------------------- --------------------- ----------------------------
b. Net sq. Ft. 47,850 73,000 90,000 56,720
-------------------- ---------------------- --------------------- ----------------------------
c. # building 1 1 2 1
-------------------- ---------------------- --------------------- ----------------------------
d. #stories 1 1 1 1
-------------------- ---------------------- --------------------- ----------------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
-------------------- ---------------------- --------------------- ----------------------------
f. # elevators N/A N/A N/A N/A
-------------------- ---------------------- --------------------- ----------------------------
g. Parking Adequate Adequate Adequate Adequate
-------------------- ---------------------- --------------------- ----------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
-------------------- ---------------------- --------------------- ----------------------------
I. Vacancy % 0% 14.38% 7.2% 0%
-------------------- ---------------------- --------------------- ----------------------------
j. Anchors, if Retail Bi-Lo Quality Foods, Eckerd Save-A-Lot Foods Farmers Furniture, Rite Aid
-------------------- ---------------------- --------------------- ----------------------------
</TABLE>
Comments: Comparables #1 and #2 are located in subject neighborhood.
Comparable #3 is located in Lavonia which is similar to Toccoa in
northeast Georgia. Comparables #2 and #3 are experiencing relatively
high occupancy rates at this time.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
<TABLE>
<CAPTION>
B. RENTAL INFORMATION
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A N/A
------------------- ----------------------- -------------------- ---------------------------
b. Shop Space $6.00 - $11.30 $5.00 - $8.00 $4.00 - $7.50 $6.00 - $7.00
------------------- ----------------------- -------------------- ---------------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net
------------------- ----------------------- -------------------- ---------------------------
3. Rent Concessions None None None None
------------------- ----------------------- -------------------- ---------------------------
4. Effective Rent $6.00 - $11.30 $5.00 - $8.00 $4.00 - $7.50 $6.00 - $7.00
------------------- ----------------------- -------------------- ---------------------------
5. TI Allowance None None None None
------------------- ----------------------- -------------------- ---------------------------
6. Expense Stop None None None None
------------------- ----------------------- -------------------- ---------------------------
7. Length of Lease Term 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops) 3 - 5 years (shops)
------------------- ----------------------- -------------------- ---------------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% - 7.00%
------------------- ----------------------- -------------------- ---------------------------
9. Percentage Rent Farmers Furniture, Rite
(per lease terms) Bi-Lo Quality Foods, Eckerd Save-A-Lot Foods Aid
------------------- ----------------------- -------------------- ---------------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A
------------------- ----------------------- -------------------- ---------------------------
11. Annual Operating Expense
psf (Including taxes)
N/A N/A N/A N/A
------------------- ----------------------- -------------------- ---------------------------
C. RANK RELATIVE
TO SUBJECT
(inferior, similar,
superior) N/A Inferior Inferior Similar
------------------- ---------------------- -------------------- ---------------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Subject is located in a larger city than
Comparable #3. However, the centers are
generally similar in size and number of tenants.
Comparables #1 and #2 are ranked inferior to
subject because they are older centers than
subject. The rental rates that are being
received are lower than those of subject. Also,
the Bi-Lo which occupies space at subject is a
high credit tenant.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Towne Plaza
Location: South Big A Road
Toccoa, GA
Year Built: 1975
Total Size: 73,000 SF
Vacant Space: 10,497 SF
Vacancy Rate: 14.38%
Rental Range: $5.00 - $8.00
Tenant Expenses: Triple Net
Remarks: Quality Foods and Eckerd are the major
tenants. Located on Georgia Highway #17
which is a heavily traveled road.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Big A Shopping Center
Location: Big A Road at Collins Road
Toccoa, GA
Year Built: 1973
Total Size: 90,000 SF
Vacant Space: 6,480 SF
Vacancy Rate: 7.2%
Rental Range: $4.00 - $7.50
Tenant Expenses: Triple Net
Remarks: Major tenant is Save-A-Lot Foods. This is an
older center in Toccoa.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Silo Shopping Center
Location: I-85 at Highway #17
Lavonia, GA
Year Built: 1986
Total Size: 56,720
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $6.00 - $7.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Farmer's Furniture and
Rite Aid Pharmacy. This is one of the
newest centers in Lavonia and has operated
at a high occupancy rate.
7
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
<TABLE>
<CAPTION>
II. SALES COMPARABLES
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
Lexington Triangle
a. Name Stephens Plaza Barnwell Plaza Village
------------------------ ------------------------ --------------------------
b. Street Address Big A Road 1019 Dunbarton Blvd. Sunset Blvd. & Lake Dr.
------------------------ ------------------------ --------------------------
c. City Toccoa, GA Barnwell, SC Lexington, SC
------------------------ ------------------------ --------------------------
d. Distance from Subject N/A 120 miles 100 miles
------------------------ ------------------------ --------------------------
2. Attributes
a. Year Built 1989 1985 1985
------------------------ ------------------------ --------------------------
b. Net sq. feet 47,850 70,725 115,754
------------------------ ------------------------ --------------------------
c. # Buildings 1 1 1
------------------------ ------------------------ --------------------------
d. # of Stories 1 1 1
------------------------ ------------------------ --------------------------
e. Vacancy % 0% 9.00% 1.3%
------------------------ ------------------------ --------------------------
3. Sales Information
a. Sales Price N/A $2,860,620 $4,489,380
------------------------ ------------------------ --------------------------
b. Sales Price PSF N/A $40.45 $38.78
------------------------ ------------------------ --------------------------
c. Cap. Rate N/A 01-01-95 01-31-95
------------------------ ------------------------ --------------------------
d. Date N/A 330,327 480,919
------------------------ ------------------------ --------------------------
e. NOI at time of Sale N/A 11.55% 10.71%
------------------------ ------------------------ --------------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A similar similar
------------------------ ------------------------ --------------------------
<CAPTION>
II. SALES COMPARABLES
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Hampton Plaza Cumberland Plaza
----------------------- ----------------------
2864 Wilma Randolph 209 New Swithville
b. Street Address Blvd. Hwy.
----------------------- ----------------------
c. City Clarksville, TN McMinnville, TN
----------------------- ----------------------
d. Distance from Subject 200 miles 215 miles
----------------------- ----------------------
2. Attributes
a. Year Built 1988 1988
----------------------- ----------------------
b. Net sq. feet 189,302 143,951
----------------------- ----------------------
c. # Buildings 1 1
----------------------- ----------------------
d. # of Stories 1 1
----------------------- ----------------------
e. Vacancy % 0% 4.3%
----------------------- ----------------------
3. Sales Information
a. Sales Price $6,150,000 $5,225,050
----------------------- ----------------------
b. Sales Price PSF $23.24 $36.30
----------------------- ----------------------
c. Cap. Rate 12-26-95 12-26-95
----------------------- ----------------------
d. Date 753,627 693,726
----------------------- ----------------------
e. NOI at time of Sale 12.25% 13.28%
----------------------- ----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) superior superior
----------------------- ----------------------
Explain Ranking/Comments: Comparables #3 and #4 are ranked superior to
subject. The reason for this is because of the
size and location of these comparables being
superior to subject. Comparable #1 is located in
a commercial area that is the same size as
subject.
</TABLE>
8
<PAGE>
COMPARABLE IMPROVED SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 072- 06- 04- 11, 20
NAME Barnwell Plaza
LOCATION 1019 Dunbarton Boulevard, Barnwell, SC
GRANTOR 1994 N1 SC Associates, LP
GRANTEE Tri Centers, LP
DEED REFERENCE Book 282/Page 137
DATE Jan 31, 1995
SALES PRICE $2,860,620
ADJUSTED SALES PRICE $2,860,620
SIZE BUILDING 70,725
SALES PRICE PER S.F. $40.45
SIZE LAND (ACRES) 11.28
SIZE LAND (S.F.) 491,357
YEAR BUILT 1985
LAND/BUILDING RATIO 6.95 To 1
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $399,045
GROSS INCOME MULTIPLE 7.17
EGIM 7.17
NET OPERATING INCOME $330,327
OVERALL RATE 11.55%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a good quality community
shopping center located in the town of Barnwell
in Barnwell County (pop. 20,000) in western
South Carolina. Approximately 91% of the center
was comprised of anchor space, including
Wal-Mart (34,875 SF), Food Lion (21,000 SF) and
Revco Drugs (8,450 SF). The income and expense
data here is based on the center's actual
performance at the time of sale, and include
approximately $0.50 SF in overage rents from
Wal-Mart and $0.10 SF in reserves.
(590)
9
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Lexington Triangle Village
LOCATION U.S. 378 and North Lake Drive (SC #6), Lexington, SC
GRANTOR 1994 N1 SC Associates
GRANTEE Tri Centers, LP
DEED REFERENCE Book 3260, Page 199
DATE Jan 31, 1995
SALES PRICE $4,489,380
ADJUSTED SALES PRICE $4,489,380
SIZE BUILDING 115,754
SALES PRICE PER S.F. $38.78
SIZE LAND (ACRES) 12.51
SIZE LAND (S.F.) 544,936
YEAR BUILT 1985
LAND/BUILDING RATIO 4.71 To 1
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $607,469
GROSS INCOME MULTIPLE 7.39
EGIM 7.39
NET OPERATING INCOME $480,919
OVERALL RATE 10.71%
TYPE OF PURCHASER Private Investor
COMMENTS: This center is anchored by Wal-Mart (65,904 SF)
and Food Lion (25,000 SF) and there are 7 local
shops totaling 24,850 SF (21.5 percent). At the
time of sale, the center was 98.7 percent
occupied with only 2,000 SF vacant. Wal-Mart has
a base rent of $3.55 and the lease expires
11/05. Currently, Wal-Mart is paying about $0.50
per SF overage rent and Wal-Mart is expected to
leave the center in the near future as no
expansion room is available. The estimated cap
rate excludes potential overage rent form
Wal-Mart and only excludes income from the 2,000
SF vacant bay. Projected expenses include $0.10
per SF reserves. The center is masonry with
brick front and metal mansard canopy roof and in
average condition. No outparcels were included
with this sale.
(763)
10
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME Hampton Plaza
LOCATION 2864 Wilma Rudolph Boulevard, Clarksville, TN
GRANTOR Aetna Life Insurance Company
GRANTEE Hampton II, LP
DEED REFERENCE Book 580, Page 1793
DATE Dec 26, 1995
SALES PRICE $6,150,000
ADJUSTED SALES PRICE $6,150,000
SIZE BUILDING 189,302
SALES PRICE PER S.F. $32.49
SIZE LAND (ACRES) 23.24
SIZE LAND (S.F.) 1,012,334
YEAR BUILT 1988
LAND/BUILDING RATIO 5.35 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Shopping Center District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $937,119
GROSS INCOME MULTIPLE 6.37
EGIM 6.56
NET OPERATING INCOME $753,627
OVERALL RATE 12.25%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center with
Wal-Mart as a major tenant prior to a new
Wal-Mart Superstore being built on the same
block. While Wal-Mart remains liable for the
lease, the store is vacant. The remainder of the
center is occupied.
(759)
11
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
NAME Cumberland Plaza
LOCATION 209 New Smithville Highway, McMinnville, TN
GRANTOR Aetna Life Insurance
GRANTEE Cumberland II, LP
DEED REFERENCE Book 287, Page 204
DATE Dec 26, 1995
SALES PRICE $5,225,050
ADJUSTED SALES PRICE $5,225,050
SIZE BUILDING 143,951
SALES PRICE PER S.F. $36.30
SIZE LAND (ACRES) 19.64
SIZE LAND (S.F.) 855,518
YEAR BUILT 1988
LAND/BUILDING RATIO 5.94 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING C-3, Highway Commercial District
FINANCING Cash to seller
EFFECTIVE GROSS INCOME $875,830
GROSS INCOME MULTIPLE 5.79
EGIM 5.97
NET OPERATING INCOME $693,726
OVERALL RATE 13.28%
TYPE OF PURCHASER Private Investor
COMMENTS: This is a community shopping center. Wal-Mart
was the major tenant and remains liable for the
lease for the remaining term. A new Wal-Mart
Superstore was built one block west of this
property.
(762)
12
<PAGE>
ADDENDA
o Stephens County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
13
<PAGE>
USA COUNTIES 1996
Geographic Area: Stephens, GA (13257)
Table: GENERAL PROFILE
- --------------------------------------------------------------------------------
POPULATION AND HOUSING (Bureau of the Census) Total resident population:
1995 ............................................................. 25,000
Percent 65 years and over ...................................... 15.9
1990 ............................................................. 23,436
1980 ............................................................. 21,761
Occupied housing units, 1990 ....................................... 8,949
Percent owner occupied ........................................... 72.9
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ....................................................... 323
Per 1,000 resident population .................................... 13.2
Percent to mothers under 20 years of age ......................... 15.5
Deaths, 1993 ....................................................... 252
Per 1,000 resident population .................................... 10.3
Infant deaths per 1,000 live births, 1993 .......................... 21.7
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 .................................... 15,013
Percent high school graduates .................................... 60.1
Percent college graduates ........................................ 13.1
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ......................................... 12,280
Percent unemployed ............................................... 5.1
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ......................................... 586
Percent retail trade ............................................. 28.0
Percent services ................................................. 30.5
Paid employees, 1993 (pay period including March 12) ............... 10,008
Annual payroll, 1993 ($1,000) ...................................... 174,423
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................... 380,581
Per capita (dollars) ............................................. 15,577
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 .............................................. 172
Land in farms as percent of total land ........................... 14
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ........................................ 171,523
Per capita (dollars) ............................................. 7,135
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 5
Total deposits ($1,000) .......................................... 152,610
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 .................... 5,505
Retired workers .................................................. 3,245
Supplementary Security Income recipients, December 1994 ............ 991
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................... 3,509
1990 (dollars) ................................................... 2,730
- --------------------------------------------------------------------------------
(NA) Not available. (D) Avoid disclosure of confidential information. (X) Not
applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE RENTALS MAP
<PAGE>
[GRAPHIC OMITTED]
COMPARABLE SALES MAP
<PAGE>
---------
SITE PLAN
---------
[GRAPHIC OMITTED]
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 117
Property: STEPHENS PLAZA
328 SOUTH BIG A ROAD
TOCCOA, GA 30577-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALL STAR VIDEO, INC.
ALL STAR VIDEO, INC. 649-10 4,225 06/12/97 06/30/02 0.32 06/12/97 1,337.92
0.00 0.00
6.00 07/01/97 25,350.00
6.50 07/01/00 27,462.48
- ------------------------------------------------------------------------------------------------------------------------
CELLULAR ONE
CELLCO PARTNERSHIP/BELL ATLAN 649-20 1,300 03/17/96 03/31/99 0.00 0.00
0.00 0.00
0.00 0.00
8.00 04/01/96 10,400.04
- ------------------------------------------------------------------------------------------------------------------------
TOCCOA CLINIC MEDICAL ASSOC.
TOCCOA CLINIC MEDICAL ASSOCIA 649-30 1,625 02/12/97 02/28/01 8.00 03/01/97 13,000.08
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
BAMBOO HOUSE
STEPHEN LEUNG RESTAURANT MGMT 649-40 2,400 03/01/93 02/28/98 0.00 0.00
0.00 0.00
7.18 03/01/93 17,220.00
7.43 03/01/94 17,820.00
7.68 03/01/96 18,420.00
- ------------------------------------------------------------------------------------------------------------------------
STEWART PHOTO
J.F. STEWART STEWART DISCOUNT 649-60 1,500 08/01/94 07/31/97 0.00 0.00
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALL STAR VIDEO, INC.
ALL STAR VIDEO, INC. Full 0 Full 0 Full 0 07/01/02 06/30/05 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CELLULAR ONE
CELLCO PARTNERSHIP/BELL ATLAN Full 0 Full 0 Full 0 04/01/99 03/31/02 0.00 0.00 0
09/30/97 09/30/97 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
TOCCOA CLINIC MEDICAL ASSOC.
TOCCOA CLINIC MEDICAL ASSOCIA Full 0 Full 0 Full 0 03/01/01 02/28/04 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
BAMBOO HOUSE
STEPHEN LEUNG RESTAURANT MGMT Full 0 Full 0 Full 0 03/01/98 02/28/03 0.00 3.00 600,000
0.00 3.00 0
0.00 3.00 0
0.00 3.00 0
0.00 3.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
STEWART PHOTO
J.F. STEWART STEWART DISCOUNT Full 0 Full 0 Full 0 08/01/97 07/31/99 0.00 0.00 0
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 118
Property: STEPHENS PLAZA
328 SOUTH BIG A ROAD
TOCCOA, GA 30577-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual Tax
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent Recov
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STEWART PHOTO
J.F. STEWART STEWART DISCOUNT 649-60 1,500 08/01/94 07/31/97 0.00 0.00 Full
6.00 08/01/92 9,000.00
6.36 08/01/94 9,540.00
- --------------------------------------------------------------------------------------------------------------------------------
GOLD CRAFT JEWELERS
JOSEPH W. LAVELLE 649-70 1,200 02/01/95 01/31/98 0.00 0.00 Full
8.25 03/01/92 9,900.00
- --------------------------------------------------------------------------------------------------------------------------------
ARMY/MARINE RECRUITING OFFICE
DACA21-5-94-0500 649-80 1,200 09/28/94 09/27/99 11.30 12/30/94 13,560.00 None
- --------------------------------------------------------------------------------------------------------------------------------
MOUNTAIN MUSIC
MR. MIKE SUTTON 649-90 3,000 05/01/95 04/30/00 0.00 0.00 Full
0.00 0.00
6.00 05/01/95 18,000.00
6.50 05/01/98 19,500.00
- --------------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. STORE #278
BI-LO, INC 649-100 25,000 12/30/89 12/29/09 5.95 12/30/89 148,749.96 Full
0.00 0.00
0.00 0.00
0.00 0.00
- --------------------------------------------------------------------------------------------------------------------------------
CATO #77
THE CATO CORPORATION 649-110 6,400 07/12/94 01/31/01 0.00 0.00 Full
3.56 01/01/95 22,800.00
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STEWART PHOTO
J.F. STEWART STEWART DISCOUNT 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- --------------------------------------------------------------------------------------------------------------------------------
GOLD CRAFT JEWELERS
JOSEPH W. LAVELLE 0 Full 0 Full 0 02/01/98 01/31/01 0.00 3.00 350,000
0.00 3.00 0
- --------------------------------------------------------------------------------------------------------------------------------
ARMY/MARINE RECRUITING OFFICE
DACA21-5-94-0500 0 None 0 Fixed 0 0.00 0.00 0
- --------------------------------------------------------------------------------------------------------------------------------
MOUNTAIN MUSIC
MR. MIKE SUTTON 0 Full 0 Full 0 05/01/00 04/30/05 0.00 5.00 450,000
0.00 5.00 0
0.00 5.00 0
0.00 5.00 0
- --------------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. STORE #278
BI-LO, INC 0 PRS 1990 Fixed 0 12/30/09 12/29/14 5.95 1.00 14,875,000 Y
12/30/14 12/29/19 5.95 1.00 0 Y
12/30/19 12/29/24 5.95 1.00 0 Y
12/30/24 12/29/29 5.95 1.00 0 Y
- --------------------------------------------------------------------------------------------------------------------------------
CATO #77
THE CATO CORPORATION 0 Full 0 Full 0 02/01/01 01/31/06 7.93 5.00 0 Y
02/01/06 01/31/11 8.50 5.00 456,000 Y
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 119
Property: STEPHENS PLAZA
328 SOUTH BIG A ROAD
TOCCOA, GA 30577-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CATO #77
THE CATO CORPORATION 649-110 6,400 07/12/94 01/31/01 7.50 4/01/96 48,000.00
- ------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 47,850 Current Annual Base Rent 289,570.08
Available. 0
Total..... 47,850
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CATO #77
THE CATO CORPORATION Full 0 Full 0 Full 0 02/01/11 01/31/16 9.00 5.00 960,000 Y
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Georgia Highway #17 (Big A Road) - Facing Northwest
[GRAPHIC OMITTED]
Georgia Highway #17 (Big A Road) - Facing Southease
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject
[GRAPHIC OMITTED]
Front View of Subject
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject
[GRAPHIC OMITTED]
Front and Side View of Subject
<PAGE>
[GRAPHIC OMITTED]
Rear View of Subject
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study of:
NORTHSIDE PLAZA
318 North Boulevard
at Jasper Street
Clinton, Sampson County, North Carolina
Prepared By:
O. Marshall Dodds, MAI
Date of Market Study:
April 30, 1997
<PAGE>
[LETTERHEAD OF O. MARSHALL DODDS COMPANY, INC.]
May 1, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Company, Inc.
1585 Broadway
New York, NY 10036
Re: Market Study
Northside Plaza
318 North Boulevard
at Jasper Street
Clinton, Sampson County, North Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 30, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 80,030 square
feet of leaseable area. The center was constructed in 1982 and the anchor
tenants are Food Lion and Revco.
The subject property is currently 92.15 percent occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
----------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
OMD:mm
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Clinton is the county seat of Sampson County which is the largest county in
North Carolina with respect to size. Being situated in the southeastern part of
the state Sampson County is in an area known as the coastal plains. From Sampson
County, the capital city of Raleigh is approximately 60 miles northwest and
Wilmington, at the coast, is approximately 57 miles to the east. The
unemployment rate for Sampson County as of 1994 was 5.3% and North Carolina had
an unemployment rate of 4.0%. The population of Sampson County as provided by
the Chamber of Commerce was 51,177 with a median age of 36.7 years. The average
per capita income was $22,158. Industry and agricultural play an important role
in the Sampson County economy. Sampson County ranked #1 in agriculture with an
annual income of $513.5 million.
Neighborhood and Site
The subject neighborhood is located in the northern section of the City of
Clinton near the intersection of North Boulevard and Beaman Street. The
neighborhood is continuously growing and there are a number of single family
dwellings located throughout the neighborhood. Commercial properties are located
along US Highway #701 Business and SC Highway #403. The Sampson Regional Medical
Center is also located in the neighborhood along Beaman Street. Several
industries are situated to the west of the subject property including Fujicone
Industries which is located in the Sampson Southeast Business Complex on North
Boulevard which is being widened just west of the subject as of the date of this
market study. The business district of Clinton is located approximately two
miles to the south of the subject property.
Physical features are as follows:
1. Size 9.77 acres or 425,581 square feet
2. Identity 318 North Boulevard and Jasper Street
TMS 12-0759020-01
3. Shape irregular
4. Topography generally level
5. Accessibility good from either direction
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 80,030 square feet
2. Layout & Design 1 story-food store, drug store, seven shops
3. Parking Spaces 476
5.95 per 1,000 square of net area
4. Construction brick and glass front with concrete block
on side and rear and metal seamed roof
1
<PAGE>
Market Position and Marketability Conclusions
The Clinton area contains 5 retail structures. Coharie Plaza measures 126,605
square feet and is located at the intersection of Highways 24 and 421/ 701 which
is in the southwestern section of Clinton. D.A. Kelly's (women's clothing)
recently vacated a store in this center. Also, the Shamrock Plaza is located at
this intersection and it contains 29,200 square feet. The Clinton Plaza is
located on Northeast Boulevard or US Highway #701 Business and contains
approximately 100,000 square feet. Advance Auto Parts and Family Dollar Stores
recently occupied space in this center. First Union National Bank and
Glam-O-Rama Dry Cleaners are located on outlots. The Jordan Shopping Center is
located near the intersection of US Highway #701 Business and NC Highway #403
across from Clinton Plaza. It contains 93,150 square feet with two vacant
stores. No new properties are under construction or planned for this area at
this time.
The subject property is in the middle of the neighborhood being around the
intersection of North Boulevard and Beaman Street. The location of subject is
convenient to the single family dwellings that are located throughout the
neighborhood. North Boulevard and Beaman Street are the major traffic arteries
running through the area. The Jordan Shopping Center is located approximately
two miles from subject near the intersection of US Highway #701 Business and NC
Highway #403. This center has Piggly Wiggly as the major tenant and the rental
rate for the shops ranges from $4.75 to $5.00 per square foot. The Clinton Plaza
is across the street from the Jordan Shopping Center. The major tenants are
Advance Auto Parts and Family Dollar. The rental rate for the shops ranges from
$5.00 to $6.00 per square foot. The Coharie Plaza is located at the intersection
of NC Highway #24 and US Highway #421/701. The major tenants are Belk, Roses and
Revco Drug Store. D.A. Kelly's has recently vacated their store. The rental rate
for the shops ranges from approximately $6.00 to $7.00 per square foot. The
Shamrock Plaza is located almost adjacent to the Coharie Plaza. The major
tenants are Piggly Wiggly and Eckerd Drug Store. The rental rate for the shops
ranges from $4.50 to $5.00 per square foot.
The subject property has six shops with rental rates ranging from $2.25 to $6.75
per square foot. However, the majority of the rental rates range from $4.00 to
$6.75 per square foot for the shops. These are thought to be reasonable rental
rates for the neighborhood.
The rental rate for the Food Lion is $7.27 per square foot while the rental rate
for the Revco Drug Store is $5.75 per square foot. Overage rentals are being
received from the Revco Store.
The subject property has operated at a high occupancy rate and the
developer/owner has renovated the center since it was originally constructed.
The location of subject is strategic within the neighborhood and convenient to
the shoppers throughout the neighborhood.
Trends
The subject property is located in the northern section of Clinton. The
neighborhood is continuing to develop with several single family dwellings and
some industrial use. Commercial developments are located along the major traffic
arteries. The Sampson County Medical Center is located in the neighborhood.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Northside Plaza Shamrock Plaza Clinton Plaza Jordan SHC
-------------------- ---------------------- ---------------------- --------------------
b. Street 318 North Blvd. at NC Hwy. #24 and US US Hwy. #701 N &
Jasper St. Hwy. #701/421 Northeast Boulevard NC Hwy. #403
-------------------- ---------------------- ---------------------- --------------------
c. City Clinton, NC Clinton, NC Clinton, NC Clinton, NC
-------------------- ---------------------- ---------------------- --------------------
d. Distance from subject N/A 3 miles 2 miles 2 miles
-------------------- ---------------------- ---------------------- --------------------
e. Contact Jesse & Elmon Lindsay, Cope Commercial Realty
Edens Avant, Inc. Owner Company Jordan SHC, Inc.
-------------------- ---------------------- ---------------------- --------------------
f. Phone (803) 779-4420 (910) 592-7611 (919) 778-5555 (910) 592-5481
-------------------- ---------------------- ---------------------- --------------------
2. Attributes
a. Year built 1959 Expanded &
1982 1973, Renovated 1986 1975 Renovated in 1986
-------------------- ---------------------- ---------------------- --------------------
b. Net sq. Ft. 80,030 29,200 100,000 93,150
-------------------- ---------------------- ---------------------- --------------------
c. # building 1 1 3 1
-------------------- ---------------------- ---------------------- --------------------
d. #stories 1 1 1 1
-------------------- ---------------------- ---------------------- --------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
-------------------- ---------------------- ---------------------- --------------------
f. # elevators N/A N/A N/A N/A
-------------------- ---------------------- ---------------------- --------------------
g. Parking Adequate Adequate Adequate Adequate
-------------------- ---------------------- ---------------------- --------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
-------------------- ---------------------- ---------------------- --------------------
I. Vacancy % 7.85% 0% 0% 6.44%
-------------------- ---------------------- ---------------------- --------------------
j. Anchors, if Retail Food Lion, Revco Piggly Wiggly , Eckerd Advance Auto, Family $ Piggly Wiggly
-------------------- ---------------------- ---------------------- --------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Coharie Plaza
-----------------------
b. Street NC Hwy. #24 & US
Hwy. #701/421
-----------------------
c. City Clinton, NC
-----------------------
d. Distance from subject 3 miles
-----------------------
e. Contact
Faison
-----------------------
f. Phone (704) 331-2500
-----------------------
2. Attributes
a. Year built
1977
-----------------------
b. Net sq. Ft. 126,205
-----------------------
c. # building 1
-----------------------
d. #stories 1
-----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A
-----------------------
f. # elevators N/A
-----------------------
g. Parking Adequate
-----------------------
h. Construction Type Brick/Concrete Block
-----------------------
I. Vacancy % 2.77%
-----------------------
j. Anchors, if Retail Belk, Roses, Revco
-----------------------
Comments: These comparable rentals are located close to subject neighborhood.
All of these centers are relatively old with renovations having been
completed in 1986 to Comparable #2 and Comparable #4. The Clinton
Plaza recently gained two new tenants as Advance Auto Parts
relocated from The Jordan Shopping Center across the street and
Family Dollar is now occupying a store. Comparables #1, #2 and #4
are experiencing high occupancy rates at this time.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
================================================================================
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 COMPARABLE 4
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A N/A N/A
----------------- --------------------- -------------------- ------------------ --------------------
b. Shop Space $2.25 - $6.75 $4.50 - $5.00 $5.00 - $6.00 $4.75 - $5.00 $6.00 - $7.00
----------------- --------------------- -------------------- ------------------ --------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net Triple Net
----------------- --------------------- -------------------- ------------------ --------------------
3. Rent Concessions None None None None None
----------------- --------------------- -------------------- ------------------ --------------------
4. Effective Rent $2.25 - $6.75 $4.50 - $5.00 $5.00 - $6.00 $4.75 - $5.00 $6.00 - $7.00
----------------- --------------------- -------------------- ------------------ --------------------
5. TI Allowance None None None None None
----------------- --------------------- -------------------- ------------------ --------------------
6. Expense Stop None None None None None
----------------- --------------------- -------------------- ------------------ --------------------
7. Length of Lease Term 3 -5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
----------------- --------------------- -------------------- ------------------ --------------------
8. Commissions 5.00% - 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00% 5.00% to 7.00%
----------------- --------------------- -------------------- ------------------ --------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco Piggly Wiggly, Eckerd Advance Auto, Piggly Wiggly Belk, Roses, Revco
Family $
----------------- --------------------- -------------------- ------------------ --------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A N/A
----------------- --------------------- -------------------- ------------------ --------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A N/A N/A
----------------- --------------------- -------------------- ------------------ --------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar,
superior) N/A Inferior Inferior Similar Superior
----------------- --------------------- -------------------- ------------------ --------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS: Subject is the newest shopping center for the
market. Comparable #4 is a significantly
larger center and has an additional anchor,
Belk, that is significant with respect to
customer attraction. The rental rates that
are being received are slightly higher than
subject. Also, the center is located at the
intersection of two major thoroughfares. The
other shopping centers have been rated as
inferior or similar and are thought to be so
with subject.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Shamrock Plaza
Location: NC Highway #24 and US Highway #701/421
Clinton, NC
Year Built: 1973, Renovated in 1986
Total Size: 29,200 SF
Vacant Space: None
Vacancy Rate: 0%
Rental Range: $4.50 - $5.00
Tenant Expenses: Triple Net
Remarks: Piggly Wiggly and Eckerd are the major
tenants. Located on NC Highway #24 and US
Highway #701/421. Has operated at a high
occupancy level.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Clinton Plaza
Location: Northeast Boulevard
Clinton, NC
Year Built: 1975
Total Size: 100,000 SF
Vacant Space: 0 SF
Vacancy Rate: 0%
Rental Range: $5.00 - $6.00
Tenant Expenses: Triple Net
Remarks: Major tenants are Advance Auto Parts and
Family Dollar. Two tenants recently occupied
stores in this center. A bank and a dry
cleaners occupy outlots.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Jordan Shopping Center
Location: US Highway #701 N and NC Highway #403
Clinton, NC
Year Built: 1959, Expanded and renovated in 1986
Total Size: 93,150 SF
Vacant Space: Approximately 6,000 SF
Vacancy Rate: 6.44%
Rental Range: $4.75 - $5.00
Tenant Expenses: Triple Net
Remarks: This center was expanded in 1986. Recently
Advance Auto Parts relocated to the center
across the street. Several other tenants
have moved out, but were replaced..
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Coharie Plaza
Location: NC Highway #24 at US Highway #701/421
Clinton, NC
Year Built: 1977
Total Size: 126,205 SF
Vacant Space: Approximately 3,500 SF
Vacancy Rate: 2.77%
Local Rent Range: $6.00 - $7.00
Tenant Expenses: Triple Net
Remarks: D.A. Kelly's (clothing store) recently
vacated their store and it remains vacant.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Northside Plaza St. Andrews Crossing Eastage Shopping Center One Norman Center
------------------- -------------------- ----------------------- -----------------
b. Street Address 318 North Boulevard NWC Whiskey Rd. & 19706 One Norman
at Jasper Street 817 St. Andrews Road Eastgate Dr. Blvd.
------------------- -------------------- ----------------------- -----------------
c. City Clinton, NC Columbia, SC Aiken, SC Cornelius, NC
------------------- -------------------- ----------------------- -----------------
d. Distance from Subject N/A 157 miles 213 miles 141 miles
------------------- -------------------- ----------------------- -----------------
2. Attributes
a. Year Built 1982 1994 1995 1993
------------------- -------------------- ----------------------- -----------------
b. Net sq. feet 80,030 66,910 SF 75,716 SF 54,185 SF
------------------- -------------------- ----------------------- -----------------
c. # Buildings 1 1 1 1
------------------- -------------------- ----------------------- -----------------
d. # of Stories 1 1 1 1
------------------- -------------------- ----------------------- -----------------
e. Vacancy % 7.85% 0% 7.21% 6.98%
------------------- -------------------- ----------------------- -----------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000 $4,650,000
------------------- -------------------- ----------------------- -----------------
b. Sales Price PSF N/A $97.89 $88.16 $85.82
------------------- -------------------- ----------------------- -----------------
c. Cap. Rate N/A 9.69% 9.86% 9.68%
------------------- -------------------- ----------------------- -----------------
d. Date N/A 05-25-94 09-28-95 10-12-95
------------------- -------------------- ----------------------- -----------------
e. NOI at time of Sale N/A $634,797 $782,704 $474,591
------------------- -------------------- ----------------------- -----------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A superior similar similar
------------------- -------------------- ----------------------- -----------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Paw Creek Commons
-----------------------
b. Street Address E/S Little Rock Road
at Freedom Drive
-----------------------
c. City Charlotte, NC
-----------------------
d. Distance from Subject 141 miles
-----------------------
2. Attributes
a. Year Built 1996
-----------------------
b. Net sq. feet 66,050 SF
-----------------------
c. # Buildings 1
-----------------------
d. # of Stories 1
-----------------------
e. Vacancy % 2.73%
-----------------------
3. Sales Information
a. Sales Price $5,120,000
-----------------------
b. Sales Price PSF $77.52
-----------------------
c. Cap. Rate 9.60%
-----------------------
d. Date 03-25-97
-----------------------
e. NOI at time of Sale $517,412
-----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) superior
-----------------------
Explain Ranking/Comments: Comparables #1 and #4 are ranked superior to
subject. The reason for this is because of
the location of these comparables being
superior to subject. Comparable No. 3 is
located in a commercial area that is larger
than subject, but it is similar. Comparable
No. 2 is similar to subject.
9
<PAGE>
COMPARABLE SHOPPING CENTER SALES
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS 6012 -1 -1
NAME St. Andrews Crossing
LOCATION St. Andrews Road and I-26, Columbia, SC
GRANTOR Hayley-Redd, L.P.
GRANTEE F.A.C. Properties
DEED REFERENCE Book 1199, Page 331
DATE May 25, 1994
SALES PRICE $6,550,000
ADJUSTED SALES PRICE $6,550,000
SIZE BUILDING 66,910
SALES PRICE PER S.F. $97.89
SIZE LAND (ACRES) 8.08
SIZE LAND (S.F.) 351,965
YEAR BUILT 1994
LAND/BUILDING RATIO 5.26 To 1
UTILITIES All available
VERIFICATION Deed
ZONING Commercial
FINANCING Market
EFFECTIVE GROSS INCOME $686,905
EGIM 9.54
NET OPERATING INCOME $634,797
OVERALL RATE 9.69%
VERIFICATION Public Records
TYPE OF PURCHASER Private Investor
COMMENTS This was an arms length sale. This neighborhood
shopping center is anchored by Kroger and is located
in a good commercial area with good accessibility and
fair exposure. The construction is brick veneer and
concrete block.
(503)
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
NAME Eastgate Shopping Center
LOCATION Northwest Corner of Whiskey Road and Eastgate
Drive, Aiken, SC
GRANTOR PDG Aiken Partners, LP
GRANTEE Southeast U.S. Retail, LP
DATE Sep 28, 1995
SALES PRICE $6,675,000
SIZE BUILDING 75,716
SALES PRICE PER S.F. $88.16
SIZE LAND (ACRES) 8.79
SIZE LAND (S.F.) 382,892
YEAR BUILT 1995
LAND/BUILDING RATIO 5.06 To 1
UTILITIES All available
VERIFICATION Public Records
ZONING Commercial
FINANCING Cash to seller
GROSS POTENTIAL INCOME $782,704
EFFECTIVE GROSS INCOME $782,704
GROSS INCOME MULTIPLE 8.53
EGIM 8.53
NET OPERATING INCOME $657,896
OVERALL RATE 9.86%
TYPE OF PURCHASER Private Investor
COMMENTS Part of a portfolio of Publix anchored shopping
centers being purchased in the Southeast. This center
is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7
percent). Most of the local tenants are on 5 year
leases, with rental rates generally ranging from $8.00
to $13.00 per square foot. This is a neighborhood
shopping center with stucco and brick exterior that
was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95
percent.
(643)
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
NAME One Norman Center
LOCATION 19706 One Norman Boulevard, Cornelius, Mecklenburg
County, NC
GRANTOR One Norman Center, LP
GRANTEE Lucky Realty
DEED REFERENCE Book 8325, Page 721
DATE Oct 12, 1995
SALES PRICE $4,650,000
SIZE BUILDING 54,185
SALES PRICE PER S.F. $85.82
SIZE LAND (ACRES) 5.69
SIZE LAND (S.F.) 247,856
YEAR BUILT 1993
LAND/BUILDING RATIO 4.57 To 1
UTILITIES All Public
VERIFICATION Public Records
ZONING CUB-2
FINANCING Cash to Seller
GROSS POTENTIAL INCOME $474,591
EFFECTIVE GROSS INCOME $474,591
GROSS INCOME MULTIPLE 9.80
EGIM 9.80
NET OPERATING INCOME $450,188
OVERALL RATE 9.68%
TYPE OF PURCHASER Private Investor
COMMENTS This is a neighborhood center with Bi-Lo as the major
tenant (42,680 SF). Locals include Blockbuster Video,
El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot;
local shops range from $10.50 to $13.00 per square
foot. Triple net lease.
(716)
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS 59 -231 -22 ,23 pt.
NAME Paw Creek Commons
LOCATION East side of Little Rock Road at Freedom Drive,
Charlotte, NC
GRANTOR Paw Creek, LLC
GRANTEE Frastacky and Associates
DATE Mar 25, 1997
SALES PRICE $5,120,000
ADJUSTED SALES PRICE $5,120,000
SIZE BUILDING 66,050
SALES PRICE PER S.F. $77.52
SIZE LAND (ACRES) 9.82
SIZE LAND (S.F.) 427,759
YEAR BUILT 1996
LAND/BUILDING RATIO 6.48 To 1
UTILITIES Municipal
VERIFICATION Public Records
ZONING CC, Commercial Center
FINANCING Cash to seller
GROSS POTENTIAL INCOME $568,840
EFFECTIVE GROSS INCOME $552,054
GROSS INCOME MULTIPLE 9.00
EGIM 9.27
NET OPERATING INCOME $517,412
OVERALL RATE 9.60%
TYPE OF PURCHASER Private Investor
COMMENTS The overall rate of 10.10 percent has been adjusted
down by 50 basis points since the sales contract is
pre-construction. The major tenants are Winn Dixie and
Revco. Blockbuster occupies a store containing 5,500
square feet at $11.20 per square foot. Rents on shops
range from $13.00 to $14.00 per square foot. Anchor
income is 79.41 percent of gross income.
(793)
13
<PAGE>
ADDENDA
o Sampson County Demographics
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
USA COUNTIES 1996
Geographic Area: Sampson, NC (37163)
Table: GENERAL PROFILE
POPULATION AND HOUSING (Bureau or the Census)
Total resident population:
1995 ........................................................... 50,485
Percent 65 years and over ................................... 14.3
1990 ........................................................... 47,297
1980 ........................................................... 49,687
Occupied housing units, 1996 ..................................... 17,526
Percent owner occupied ......................................... 72.9
BIRTHS AND DEATHS (National Center for Health Statistics)
Births, 1993 ..................................................... 697
Per 1,000 resident population .................................. 14.1
Percent to mothers under 20 years of age ....................... 19.5
Deaths, 1993 ..................................................... 554
Per 1,000 resident population .................................. 11.2
Infant deaths per 1,000 live births, 1993 ........................ 8.6
EDUCATION (Bureau of the Census)
Persons 25 years and over, 1990 .................................. 30,496
Percent high school graduates .................................. 61.3
Percent college graduates ................................... 8.1
LABOR FORCE (Bureau of Labor Statistics)
Civilian labor force, 1994 ..................................... 22,562
Percent unemployed .......................................... 5.3
PRIVATE NONFARM ESTABLISHMENTS (Bureau of the Census)
Total establishments, 1993 ..................................... 978
Percent retail trade ........................................ 28.7
Percent services ............................................ 27.7
Paid employees, 1993 (pay period including March 13) ............. 11,948
Annual payroll, 1993 ($1,000) .................................... 212,168
PERSONAL INCOME (Bureau of Economic Analysis)
Total personal income, 1993 ($1,000) ............................. 942,450
Per capita (dollars) .......................................... 19,123
AGRICULTURE (Bureau of the Census)
Number of farms, 1992 ............................................ 1,342
Land in farms as percent of total land ........................ 44
RETAIL TRADE (Bureau of the Census)
Retail sales, 1992 ($1,000) ...................................... 268,793
Per capita (dollars) .......................................... 5,528
COMMERCIAL AND SAVINGS BANKS (Fed. Deposit Insurance Corp.)
Number of offices, June 30, 1994 ................................. 20
Total Deposits ($1,000) ....................................... 315,459
SOCIAL PROGRAMS (Social Security Administration)
Total Social Security recipients, December 1993 .................. 9,840
Retired workers ............................................... 5,295
Supplementary Security Income recipients, December 1994 .......... 2,092
FEDERAL FUNDS AND GRANTS (Bureau of the Census)
Total direct expenditures or obligations per capita:
1994 (dollars) ................................................ 3,475
1990 (dollars) ................................................ 2,537
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(NA) Not available. (D) Avoid disclosure of confidential information.
(X) Net applicable. (S) Does not meet publication standards.
(Z) Value > 0 but < half unit of measure shown.
NOTE: 0 data may indicate geographic/data footnotes.
Source: U.S. Bureau of the Census, USA Counties 1996 CD-ROM.
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Comparable Rental Map
<PAGE>
[GRAPHIC OMITTED]
Comparable Sales Map
<PAGE>
[GRAPHIC OMITTED]
Building Sketch
<PAGE>
Date: 04/08/97
Page 190
EDENS & AVANT, INC
Retail Custom Rent Roll
Property: NORTHSIDE PLAZA CLINTON (NEW)
318 NORTH BLVD & JASPER STREET
CLINTON, NC
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
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TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To SF/YR Begin Base Rent
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLINITON QUALITY FLORIST
JAMES EDWARD DUDLEY, JR. 707- 10 3,200 04/01/95 03/31/98 0.00 0.00
3.75 04/01/95 12,000.00
4.31 04/01/97 13,800.00
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MAXWAY
VARIETY WHOLESALERS, INC. 707- 20 15,000 05/19/96 06/30/01 2.25 06/01/96 33,750.00
0.00 0.00
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ANN'S SEW-N-VAC
FRANCES ANN THORNTON 707- 30 3,980 07/12/96 07/30/99 0.00 0.00
2.56 12/01/92 10,200.00
2.71 10/01/93 10,800.00
3.02 10/01/94 12,000.00
4.45 08/01/96 17,730.00
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Available
707- 40 6,280 0.00 0.00
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DOLLAR GENERAL #2316
DOLGENCORP, INC. 707- 5O 8,400 02/01/96 01/31/99 3.00 04/01/96 25,200.00
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FOOD LION #114
FOOD LION, INC. 707- 60 30,720 06/01/96 05/31/16 3.38 02/01/83 103,950.00
3.86 11/10/94 118,650.00
7.27 06/10/96 223,451.40
<CAPTION>
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REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Beqin End SF/YR Typ Over Brk
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLINTON QUALITY FLORIST
JAMES EDWARD DUDLEY, JR. PRS 1995 PRS 1995 Full 0 04/01/98 03/31/01 0.00 4.00 23,000
0.00 4.00 0
0.00 4.00 0
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MAXWAY
VARIETY WHOLESALERS, INC. PRS 1996 PRS 1996 Fixed 0 07/01/01 06/30/06 2.58 3.00 1,125,000 Y
0.00 3.00 0 Y
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ANN'S SEW-N-VAC
FRANCES ANN THORNTON Full 0 Full 0 Full 0 08/01/99 07/31/02 0.00 4.00 450,000
0.00 4.00 0
0.00 4.00 0
0.00 4.00 0
0.00 4.00 0
- ---------------------------------------------------------------------------------------------------------------------------------
Available 0 0 0 0.00 0.00 0
- ---------------------------------------------------------------------------------------------------------------------------------
DOLLAR GENERAL #2316
DOLGENCORP, INC. Full 0 Full 0 Full 0 04/01/99 03/31/02 3.36 2.50 840,000
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FOOD LION #114
FOOD LION, INC. PRS 1983 None 0 Full 0 06/01/16 05/31/21 7.63 1.00 9,030,000
06/01/21 05/31/26 8.00 1.00 22,341,350
06/01/26 05/31/31 8.36 1.00 0
</TABLE>
<PAGE>
Date: 04/08/97
Page 191
EDENS & AVANT, INC
Retail Custom Rent Roll
Property: NORTHSIDE PLAZA CLINTON (NEW)
318 NORTH BLVD & JASPER STREET
CLINTON, NC
Column Legends:
Tenant/Property MISC column: K - Kiosk P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #114
FOOD LION, INC. 707- 60 30,720 06/01/96 05/31/16 0.00 0.00
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REVCO #4314
REVCO DISCOUNT DRUG CENTERS 0 707- 70 8,450 12/01/82 11/30/02 5.50 01/01/83 46,474.92
0.00 0.00
0.00 0.00
5.75 03/01/96 48,587.40
6.30 12/01/97 53,234.88
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AGAPE PICTURES & MIRRORS, INC
707- 80 2,000 07/20/96 07/31/99 6.75 08/01/96 13,500.00
0.00 0.00
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J.C. PENNEY STORE #3685
J.C. PENNY COMPANY, INC. 707- 90 2,000 09/01/96 08/31/01 6.00 09/01/88 12,000.00
0.00 0.00
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Square Feet: Occupied ...... 73,750 Current Annual Base Rent 388,018.80
Available ..... 6,280
Total ......... 80,030
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #114
FOOD LION, INC. PRS 1983 None 0 Full 0 06/01/31 05/31/36 8.72 1.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
REVCO #4314
REVCO DISCOUNT DRUG CENTERS 0 PRS 1983 PRS 1988 Full 0 12/01/97 11/30/02 6.31 2.00 1,267,500
12/01/02 11/30/07 6.90 2.00 0
12/01/07 11/30/12 7.57 2.00 0
0.00 2.00 0
0.00 2.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
AGAPE PICTURES & MIRRORS, INC Full 0 Full 0 Full 0 08/01/99 07/31/02 0.00 4.00 350,000
0.00 4.00 0
- -----------------------------------------------------------------------------------------------------------------------------------
J.C. PENNEY STORE #3685
J.C. PENNY COMPANY, INC. Full 0 Full 0 Full 0 09/01/01 08/31/04 0.00 0.00 0
0.00 0.00 0
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</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
North Boulevard - Facing West
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North Boulevard - Facing East
<PAGE>
[GRAPHIC OMITTED]
Jasper Street - Facing North
[GRAPHIC OMITTED]
Jasper Street - Facing South
<PAGE>
[GRAPHIC OMITTED]
Front View of Subject
[GRAPHIC OMITTED]
View of Subject from Jasper Street
<PAGE>
[GRAPHIC OMITTED]
Side View of Subject Propery
[GRAPHIC OMITTED]
Rear View of Subject Propery
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Holiday Inn Select - Beverly Hills
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Los Angeles, California
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
<PAGE>
[Letterhead of HVS International]
December 6, 1996
Mr. Shirish Godbole, Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Holiday Inn Select
Los Angeles, California
Ref. #9610268
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Los Angeles area.
Our report was prepared in accordance with, and is subject to, the requirements
of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and
the Uniform Standards of Professional Practice (USPAP), as provided by the
Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the fee simple interest in the
subject property described in this report, as of January 1, 1997, is:
$15,600,000
FIFTEEN MILLION SIX HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Manav G. Thadani
Manav G. Thadani
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary.........................................................1
2. Nature of the Assignment..................................................3
3. Description of the Land, Improvements, Zoning
Taxes and Neighborhood.................................................7
4. Market Area Analysis.....................................................23
5. Overview of External Forces Affecting the U.S. Lodging Industry..........38
6. Lodging Market Supply and Demand Analysis................................54
7. Projection of Occupancy and Average Rate.................................75
8. Highest and Best Use.....................................................94
9. Approaches to Value......................................................96
10. Income Capitalization Approach ..........................................99
11. Sales Comparison Approach...............................................138
12. Cost Approach...........................................................147
13. Reconciliation of Value Indications.....................................153
14. Statement of Assumptions and Limiting Conditions........................157
15. Certification...........................................................161
Addenda
Photographs of the Subject Property
Photographs of the Competitive Properties
Legal Description
Synopsis of Franchise and License Agreements
Synopsis of Hotel Management Agreement
Explanation of the Simultaneous Valuation Formula
Qualifications
Manav G. Thadani
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Holiday Inn Select - Beverly Hills
Location: 1150 South Beverly Drive
Los Angeles, California 90035
Date of Inspection: October 16, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
Area: +/-1.64 acres, or +/-71,447 square feet
Zoning: C-2 - Commercial District
Assessor's Parcel Number: 4430-031-040
Improvements Description
Age: Constructed in 1973
Property Type: Full-service
Guestrooms: 260
Number of Stories: 12 stories
Food and Beverage Facilities:
Fontaine's Restaurant: 155 seats
Lobby Lounge: 95 seats
Meeting Space: Seven rooms, +/-5,017 square feet
Parking: 265 spaces, in a detached, five-story
indoor parking garage
Summary of Value Parameters
Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Three
Stabilized Year: 1999
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HVS International, Mineola, New York Executive Summary 2
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.104844
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 21%
Terminal Capitalization Rate: 11%
Brokerage and Legal Fees: 3.0%
Holding Period: 10 years
Calculated Discount Rate: 13.87%
Estimates of Value
Income Capitalization Approach: $15,448,000
Sales Comparison Approach: $13,700,000 - $19,300,000
Cost Approach (Replacement Cost): $21,460,000
Market Value Conclusion: $15,600,000
Market Value Conclusion per Room: $60,000
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-71,447-square-foot (+/-1.64-acre) parcel improved with a 260-room,
full-service lodging facility known as the Holiday Inn Select - Beverly Hills,
which opened in 1973. In addition to guestrooms, the subject property contains a
full-service restaurant, a lobby lounge, approximately 5,017 square feet of
meeting space, an outdoor swimming pool, a gift shop, a detached, five-story
indoor garage structure that is currently leased to a third party, and
back-of-the-house facilities usually found in this type of property. The hotel
is located on South Beverly Drive, between Pico Boulevard and Elm Drive, in the
City of Los Angeles on three contiguous parcels of land that contain an
aggregate land area of +/-1.64 acres. Municipal jurisdictions governing the
property include the City and County of Los Angeles, and the State of
California. The hotel's civic address is 1150 South Beverly Drive, Los Angeles,
California, 90035.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Los
Angeles area for the purpose of estimating the fee simple interest in the market
value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently and knowledgeably,
and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 4
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2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities, and have analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government." The subject property is
appraised as a going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 5
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled, The Valuation of Hotels and Motels,(1)
Hotels, Motels and Restaurants: Valuations and Market Studies,(2) The
Computerized Income Approach to Hotel/Motel Market Studies and Valuations,(3)
and Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus, the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
The Holiday Inn Select - Beverly Hills was originally built by the Ramada Hotel
Operating Company (RHOC), and opened as a Ramada Inn in 1973. RHOC operated this
facility until its sale as part of a larger package of ten hotels to the Ramada
Assured Income Associates, L.P. in 1987. The subject
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 6
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property's current owners "BH California Hotel Limited Partnership" - an entity
controlled by Ashford Financial purchased the property from Ramada Assured
Income Associates, L.P., in October of 1994. According to information provided
by Ashford Financial Corporation, the subject property was one of six Ramada
properties purchased as a package from Ramada Assured Income Associates, L.P.,
which is a Lehman Brothers investment partnership. The total package was
acquired in October, 1994 for a price of $20,250,000, using all equity
financing. At the time of the transaction, the group of hotels was generating
virtually no operating income, and all were in extremely poor condition. The
previous owners were reportedly strongly motivated to sell, due to the poor
performance of the hotels.
The subject property is operated under a franchise agreement with Holiday Inn;
this agreement expires in February, 2005. The hotel is also subject to a
management agreement with Remington Hotel Company; an abstract of this contract
is presented in the Addenda to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property, assuming that it is placed on the
market at the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1996 dollars.
Date of Inspection
The subject property was inspected by Manav G. Thadani on October 16, 1996.
<PAGE>
HVS International, Mineola, New York Description of the Land, Improvements 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located at the northeast intersection formed by Pico
Boulevard and South Beverly Drive. The property is approximately two blocks
south of the Beverly Hills city line. Municipal jurisdictions governing the
property include the City and County of Los Angeles, and the State of
California.
According to a site survey by Mollenhauer, Higashi & Moore Inc., the subject
parcel measures approximately 71,447 square feet, or +/-1.64 acres. The subject
site comprises of three contiguous parcels. The subject property's northern
boundary line comprises of approximately 375 linear feet of frontage on South
Beverly Drive. Primary vehicular access to the property is provided by South
Beverly Drive.
The topography of the parcel is generally flat and at grade level with
surrounding parcels and roadways. Overall, the size and topography of the
subject parcel appear to be well suited for its current use. The site is fully
developed, with no excess land available for expansion.
Easements
The appraisers were not provided with any information concerning easements
effecting the subject property. For the purposes of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would effect its use or marketability.
<PAGE>
HVS International, Mineola, New York Description of the Land, Improvements 8
Zoning, Taxes, and Neighborhood
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Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
which is located along the north-south residential/commercial artery known as
South Beverly Drive, is accessible to a variety of local, county, state, and
interstate highways. South Beverly Drive is lined primarily with apartment
buildings, retail shops and commercial development, and cuts across Pico
Boulevard in the south and through Wilshire Boulevard and Santa Monica Boulevard
in the north. The property is one half block south of the City line for the City
of Beverly Hills, and less than a mile from Rodeo Drive.
Pico Boulevard, Wilshire Boulevard and Santa Monica Boulevard are three of the
main avenues linking West Hollywood, Hollywood, and Beverly Hills traffic with
Interstate 405 (I-405, also known as the San Diego Freeway) and U.S. Highway 101
(U.S. 101, also known as the Hollywood Freeway), as well as the neighboring
communities of Hollywood, Century City, Westwood Village, Bel Air, and Santa
Monica. These major boulevards carry local and tourist traffic into the general
vicinity of the subject property.
South Beverly Drive is a four-lane, dual-directional roadway, with left-turn
lanes provided at major intersections. Most other surrounding roadways are
residential in nature and are two-way streets with one lane in each direction.
Some street parking is available in front of the subject property; Traffic
signals or signs exist at all major intersections, including the intersection of
Pico Boulevard, just south of the subject property.
The visibility of the subject structure is good from Beverly Drive, the subject
property blends in well with the surrounding improvements, is well landscaped,
and has good signage, thereby making it somewhat easier to distinguish the
property as a hotel.
The site is approximately three miles east of I-405, the San Diego Freeway, and
one mile north of Interstate 10, which is known as the Santa Monica Freeway.
Santa Monica Boulevard, which is less than one mile north of the subject
property, is designated as State Highway 2. U.S. Highway 101, known as the
Hollywood Freeway, can be accessed approximately six miles east of the subject
property.
Despite its sprawling nature, the Los Angeles area is well served by a number of
major roadways and interstate highways, rendering most points within the area
easily accessible. Interstate 5 (I-5), which is known as the
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HVS International, Mineola, New York Description of the Land, Improvements 9
Zoning, Taxes, and Neighborhood
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Golden State Freeway, bisects downtown Los Angeles, and leads to San Diego to
the south and to Sacramento and San Francisco in northern California. Interstate
210 (I-210), known as the Harbor Freeway, connects Pasadena and downtown Los
Angeles with Long Beach.
Interstate 405 connects the San Fernando Valley, the West Los Angeles area, and
Los Angeles International Airport to Orange County and San Diego to the south.
U.S. 101 has its southern origin in downtown Los Angeles, extends through
Hollywood and North Hollywood, and continues westward to Ventura and Thousand
Oaks before proceeding northward to San Francisco and northern California.
Interstate 10, which originates in Santa Monica and intersects I-405, I-110, and
I-5, is a major east-west connector through downtown Los Angeles.
Overall, regional access to the Holiday Inn Select is considered to be
adequate.
Airport Access
The greater Los Angeles area has three major airports: Los Angeles International
Airport (LAX); John Wayne Airport, in Orange County; and the
Glendale-Burbank-Pasadena Airport, located in Burbank. The airport that is of
primary importance is LAX, located approximately ten miles south of the subject
property. Although the distance from the airport is only ten miles, the
traveling time between the airport and the subject property can take an extended
amount of time, due to the heavy Los Angeles traffic patterns. Access to the LAX
airport is via any of the three access roadways - Pico, Wilshire or Santa Monica
Boulevards to I-405, heading south.
Access to Local Demand Generators
The Holiday Inn Select is situated in close proximity of the area's primary
generators of lodging demand. The following table outlines some of these major
demand generators and their respective distances from the subject site.
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HVS International, Mineola, New York Description of the Land, Improvements 10
Zoning, Taxes, and Neighborhood
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Table 3-1 Local Demand Generators
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Approximate Distance
from Subject Approximate Driving
Demand Generator Site (in Miles) Time (in Minutes)
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Beverly Hills Rodeo Drive 0.7 2
Beverly Hills Wilshire Boulevard 0.6 2
Century City Financial District 1.2 5
UCLA Campus 2.0 15
Sunset Boulevard (Holly wood) 3.0 15
Universal Studios 5.0 20
Downtown Los Angeles 9.0 30
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Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water City of Los Angeles
Electricity Department of Water & Power
Telephone Telecom USA
Gas Southern California
Garbage and Trash City of Los Angeles
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions, other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and no signs of toxic ground contaminants were visible at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Flood Zone
Possible locational hazards include flood potential. According to the West Los
Angeles Department of Engineering, the subject property is located
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within zone C, which is defined as an area of minimal flooding, based on the
National Flood Insurance Rate Map for West Los Angeles, Community Panel Number
0601370017 C, dated December 2, 1980.
Seismicity
The subject property is located on the border of Beverly Hills. Accordingly, The
City of Beverly Hills is not identified as containing any principal faults zoned
for special study under the Alquist-Priolo Special Studies Zones Act of 1972,
which precludes ground rupture from occurring in the subject property's
immediate area, but not the effects of ground shaking or liquefaction. The
closest principal fault to the subject property is the Newport-Inglewood fault,
which extends on a north-south axis approximately two miles east of the subject
site. Although the appraisers are not qualified to evaluate the structural
integrity of the subject property, according to current management, little, if
any, damage was sustained during the earthquake of January 17, 1994 and the
associated aftershocks.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented in the Addenda to this
report.
Land Conclusion
The subject parcel appears to be excellent as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The subject property is conveniently situated proximate to its demand
generators
o Visibility at the subject property is considered to be excellent from
South Beverly Drive
o Rodeo Drive, Wilshire Boulevard and Santa Monica Boulevard are all within
walking distance of the subject property.
Disadvantages
o Most of the roadways leading in and out of the subject property market
area are highly traversed thoroughfares and at times are congested with
motorist.
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HVS International, Mineola, New York Description of the Land, Improvements 12
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o Although the Los Angeles International Airport (LAX) is situated only 10
miles away, the traveling time can be as long as 60 minutes, due to
traffic.
The advantages noted above are important locational characteristics for the
subject property, and we believe that the benefits of the site outweigh its
drawback.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by the property management.
The Holiday Inn Select is a full-service lodging facility containing 260
rentable units, +/-4,562 square feet of meeting space, a full-service
restaurant, lobby lounge, outdoor swimming pool, hotel gift shop, a garage
structure, and appropriate back-of-the-house facilities. The 12-story property
opened in 1973, and is 23 years old, as of the date of this appraisal. The hotel
was acquired by Ashford Financial Corporation in October, 1994. At the time of
this acquisition, the hotel was in extremely poor condition. Subsequent to the
acquisition, the subject property was extensively renovated, at an estimated
cost of $3.2 million dollars over the last three years. In scope, this
renovation included the exterior of the building, public areas, and the
guestrooms. The hotel is now judged to be in good condition, and management
representatives report that all of the building systems are in good working
order. The hotel is operated under a license agreement with Holiday Inn
Franchising, Inc., and reportedly meets the standards for lodging facilities of
that brand.
Based on our inspection and information provided by the property management, the
following table summarizes the facilities available at the subject property.
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Table 3-3 Facilities Summary
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<TABLE>
<CAPTION>
<S> <C>
Guestrooms
King Beds 101 Units
Double/Doubles 147
King Suites 6
Double Suites 4
Handicap 2
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Total 260 Units
Food and Beverage Outlets
Fontaine's Restaurant 155 Seats
Lobby Lounge 95
Meeting and Banquet Rooms
Del Rey Ballroom (Divided into 3) 3,192 Square Feet
Bel Air 925
Century 300
Doheny 300
Santa Monica 300
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Total 5,017 Square Feet
Recreational & Other Amenities
Outdoor Swimming Pool
Exercise Room
Parking Spaces 265 In detached 5-story, indoor parking garage
Life Safety Systems
Property is partially sprinklered.
Single-station smoke alarms in all guestrooms
Fire alarm wired to front desk
Laundry
Washer 1 85-lbs.
Washers 2 50-lbs. each
Four Dryers 4 75-lbs. each
Construction Details
Foundation Poured Concrete
Floor Slabs Steel & Poured in-place concrete
Extrerior Walls Textured aggregate facade affixed to
light-weight panels attached to metal studs
Windows Aluminium Frame
Roof Conventional built-up asphalt
</TABLE>
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Capital Improvements
The Holiday Inn Select - Beverly Hills was originally built by the Ramada Hotel
Operating Company (RHOC), and opened as a Ramada Inn in 1973. In October, 1994
the subject property was acquired by its current owners "BH California Hotel
Limited Partnership" - an entity controlled by Ashford Financial. Following the
sale, the property was converted into a Holiday Inn Select. The owners have
since spent approximately $1,472,000 each in 1994 and 1995. In addition, another
$278,000 has been spent on the property in 1996. These renovations, totaling
approximately $3.2 million, have included extensive renovations covering the
guestrooms, public areas, and the property exterior. Out of this amount,
approximately $1.6 million was spent on guestroom refurbishment.
Property Exterior
The hotel structure is situated on the east side of South Beverly Drive. In
addition to the main 12-story hotel structure, the subject property has a
detached five-story parking garage located adjacent to and on the south side of
the main building which accommodates approximately 265 automobiles. Entrance and
exit at the subject property is gained by the main entrance from South Beverly
Drive on the western side of the subject property. Service traffic can gain
access to the loading dock area, which is located toward the back of the hotel,
on its eastern border. Access to this area is via a narrow alley, which is part
of the subject property.
As part of the recently completed renovation, the subject property's management
has spent approximately $300,000 on improving the exterior of the building. A
large portion of this amount - or approximately $163,000 - was spent on power
washing and re-caulking the property's exterior. Other expenses included
upgrading the landscaping near the entrance and the porte cochere, improved
lighting in the garage areas, repairing and sealing of the parking pavement,
some roof repair work, and better directional signage to the subject property.
Lobby
The subject property's front desk and lobby are located on the ground floor, and
can be accessed from the main entrance by a set of double doors. The lobby is
finished with carpeting and ceramic floor tiles, vinyl wall coverings, an
acoustical tile ceiling, and recessed incandescent lighting fixtures. The
registration desk is located on the south wall of the front lobby, and is
equipped with a computerized reservation and billing system. Other facilities
located in the vicinity of the lobby are the main public restrooms, public
telephones, the gift shop, and a large seating area furnished with sofas, arm
chairs, tables, and potted plants. Three passenger elevators are located on
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the northeastern portion of the front lobby, and cannot be seen from the front
desk.
At present, the condition of the lobby can be described as good. As part of the
recently completed $3.2-million renovation project, the lobby area received new
area rugs; in addition, the lights and lamps in the lobby were replaced; the
phone area was upgraded to add two additional telephone booths, the ceiling was
re-painted, and the seating area furniture was re-upholstered. According to the
capital expenditure plan, approximately $25,000 was spent in the lobby
renovation process.
Food and Beverage Outlets
Fontaine's restaurant is the subject property's multi-purpose restaurant, which
serves breakfast, lunch and dinner seven days a week. The restaurant is located
north of the front desk area, and is accessible to guests via a long corridor
running along the western wall of the subject property. As part of the
renovation process, approximately $28,000 was spent on renovating the
restaurant. These renovations included new carpeting, re-furnished chairs,
re-upholstered banquettes, paint work, and careful decorations consisting of
wall murals and plants. At present, the condition of the restaurant can be
described as excellent. In addition to the full-service restaurant, the subject
property also has a lobby lounge, which is open from afternoon until late
evening. This lounge is located directly opposite the front desk area.
Approximately $41,000 was spent in the renovation of the lounge area, which
included actual construction and re-designing of the lounge, new tables and
chairs, and carpeting. At the time of our property tour, the restaurant and
lounge both appeared to be in good condition.
Meeting and Banquet Space
The subject property's function space is located exclusively on the second
floor. The largest of these rooms is the Main Ballroom, which can be broken out
into three smaller function areas. In addition to the main ballroom, the subject
property has four additional small meeting rooms. Management reported that these
rooms have been recently re-furbished. As part of the recently completed
renovations, the subject property's meeting rooms received new wall vinyl,
lighting, carpeting, and chairs, as well as new airwalls. In addition to the
meeting rooms, the second floor also contains a relatively fair amount of
pre-function space, the executive offices, and a small exercise room.
Management reported that as part of the renovation process, approximately
$125,000 has been spent on renovating the meeting space areas. These
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HVS International, Mineola, New York Description of the Land, Improvements 16
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expenses included carpeting ($10,000), new chairs ($23,500), new table linen
($12,300), wall treatment ($6,000), movable walls ($35,000), new doors ($7,128),
a PA system ($3,000), and other minor expenses totaling $18,000.
Guestrooms
The guestroom floors are all laid out in the same plan. The corridors are double
loaded with guestrooms, and are I-shaped, extending the full length of the
building. Typical guestroom finishes include double or king beds, dressers,
night stands, coffee table, television set, telephone with data ports, an iron
and ironing board, and coffee makers. All of the guest bathrooms contain a
standard, three-fixture bath-shower combination and a toilet. In addition, all
of the bathrooms are equipped with a vanity counter top, a half-length mirror,
and a wash basin.
At the time of our inspection, the subject property's guestrooms appeared to be
in excellent condition. The recently concluded renovations of guestrooms
included new case and hard goods, carpeting, new air-conditioning units,
television sets, and phones with data ports. According to the capital
expenditure plan, approximately $1,371,000 was spent in renovating the
guestrooms. Another $230,000 was spent in refurbishing the guest bathrooms. A
summarized list of these expenses for the guestrooms can be seen in the
following table.
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Table 3-4 Guestroom Renovations
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Guestrooms
AC Units $ 245,520
Paint ceilings 23,000
VWC, 12th Floor 14,400
Television sets 94,500
Bedsets 90,000
Carpeting 162,000
Case Goods 220,000
Seating 130,000
Lamps 42,000
Artwork 30,000
Bedspreads 31,000
Draperies 120,000
Bath Hardware 32,500
Suite Parlors 32,000
Paint Doors and Frames 26,000
Vanity Lights 20,800
Other Miscellaneous 57,660
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Total $1,371,380
Bathrooms
Bath Light and Soffit $ 26,000
Bath VWC 26,000
Bath Hardware 52,000
Toe Hardware 33,800
Make-up Mirrors 16,000
Ironing Board & Holders 13,000
Other Miscellaneous 63,200
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Total $ 230,000
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Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with wall vinyl and wall
carpeting, both of which were replaced during the renovations; approximately
$80,000 was spent on corridor carpeting, and another $10,000 on wall vinyl. In
addition, management indicted that new lighting and room number signs were also
installed. Each guestroom floor has a vending area that contains an ice machine
and the maid's closet; the latter is equipped with a laundry chute.
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Recreational Amenities
The only recreational activities the subject property offers are an outdoor
swimming pool and an indoor exercise room. The swimming pool is located just
outside Fontaine's restaurant. The management recently completed a $21,000
project to re-plaster and re-surface the pool deck. An additional $9,000 was
spend on pool furniture and landscaping. As previously mentioned, the subject
property's exercise room is located on the second floor, next to the ballroom.
At the time of our site inspection, the exercise room and the pool both appeared
to be in fair to good condition.
Back-of-the-House Space
The subject property's back-of-the-house areas are located on three separate
levels. All of the mechanical and housekeeping rooms are located in the
basement. The kitchen is located on the lobby level, adjacent to the restaurant
and the lobby lounge. The administrative offices are housed on either the lobby
level or the second floor, while the front office and most of the marketing
offices are located at the southeast side of the lobby, and the executive
offices are located on the second floor. The design and layout of the kitchen
and housekeeping department are good with respect to the restaurants and meeting
room areas. The only deficiency is the lack of a service elevators. Housekeeping
and food and beverage departments are forced to use the guest elevators to
transport linens and food and beverages. According to the capital improvement
plan, management spent approximately $20,500 on a new washer and an ironer. An
additional $10,000 was spent on miscellaneous kitchen equipment. Based on
information provided by the property management, all of the subject property's
operating systems are presently in good working condition.
Vertical Transportation
The subject property is served by three guest elevators. As previously
mentioned, the subject property does not have a service elevator. This lack is
considered to be a deficiency, as both housekeeping and food and beverage staff
must use the guest elevators. At the time of our property inspection, these
elevators appeared to be in fair condition; management recently installed new
paneling and lights.
Heating, Ventilation, and Air Conditioning (HVAC)
Heating and air-conditioning is provided to the guestrooms by individual air
conditioning units, which were recently replaced in all of the guestrooms. These
units are through-the-wall units that run independently. The public space areas
are heated and cooled by a centralized system. All of the plant and equipment
machinery is located in the basement
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of the building. At the time of our inspection, property management reported
that all of the HVAC equipment was in running order.
Fire Protection
The subject property has two internal fire escapes. These fire escapes can be
accessed at each floor level, and extend the full height of the building,
terminating at the ground floor level, with direct external access. The property
is partially sprinklered. The guestrooms are not sprinklered; however, they do
contain smoke detectors that are hard-wired to the main fire control station,
which is located near the front desk. The fire hose standpipes are located in
each exit stairwell.
Asbestos
According to information provided by management representatives, no asbestos is
present in the subject property's improvements; however, we have not been
provided with an asbestos report to confirm this assertion. The reader should be
advised that any costs associated with asbestos removal or containment may have
an unfavorable impact on the hotel's market value, and the estimate set forth in
this appraisal reflects our value conclusions prior to the deduction of any such
costs. We suggest that interested parties initiate an independent analysis
regarding current asbestos levels and the capital expenditures necessary to
remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any on-going costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Improvements Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
With the completion of renovations in the amount of approximately $3.2 million,
the subject property's overall condition can be described to be good, and very
competitive with its competitors. For the purposes of this appraisal, we have
assumed that the subject property will be maintained in its present condition
throughout the assumed ten year holding period. Specifically, it is assumed that
hotel management will employ standard preventive maintenance measures, and that
a reserve for replacement fund
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will be established which will fund the cost of any future necessary capital
expenditures.
ZONING
According to the City of Los Angeles Department of Zoning Regulations, the
subject property is zoned as follows.
C2 - 1VL Commercial District.
The subject property is located within the C2 District - a sub-classification of
the CR - Limited Commercial District. The C2 District is intended to promote
commercial and office developments such as banks, clubs, hotels, churches,
schools, businesses, and professional child care facilities. Permitted uses
after special approval include: auto service stations, amusement parks,
hospitals, and second-hand businesses. The 1VL zoning classification specifies a
height restriction; the maximum building height for this zoning appears to be
unlimited.
Based on this information, the subject property appears to conform to local
zoning regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning ordinances, building codes, and
all other applicable regulations. Our zoning analysis should be verified before
any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property - or ad valorem - tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments, and properties with higher
and lower values will have proportionately larger and smaller assessments.
Depending on the taxing policy of the municipality, property taxes can be based
on the value of the real property alone, or the value of the personal property
and the real property.
The taxing jurisdiction governing the subject property assesses real and
personal property. According to the provisions of the Jarvis-Gann Amendment
(Proposition 13), properties in California are assessed at 100% of fair market
value, property taxes can increase by no more than 2% each year,
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HVS International, Mineola, New York Description of the Land, Improvements 21
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and property taxes are limited to 1% of the market value of business property.
Under the terms of Proposition 13, a sale of the subject property triggers a
reassessment of the hotel, with the sale price forming the basis of the new
assessment. The purpose of this appraisal is to estimate market value; market
value inherently assumes the sale of the property as of the date of value. If
such a sale were to occur, the hotel's assessed value would be adjusted to be in
line with the sales price. However, this appraisal is being prepared for the use
of Morgan Stanley in connection with their financing of this hotel, and the
property will continue to be owned by Ashford Financial Corporation. As no sale
will occur as of the date of value, we have assumed that the assessed value will
remain at the historical levels, increasing by 2% per year, as provided by
Proposition 13. The resultant tax burden will be utilized in our forecast of
income and expense.
According to the Los Angeles County Tax Assessor's Office, the subject property
is identified by the following parcel number.
Map: 4330; Lot: 031; Block: 040
According to the Los Angeles County Tax Assessor's Office, the subject property
was assessed in 1995 at $6,494,000 (land) and $9,805,408 (improvements). The
total assessed value in 1995 for the property was $16,300,000. Every 1,000 units
of this value is multiplied by the tax rate. The 1995 tax rate for the subject
property's jurisdiction was 1.03% per thousand. The results of these
calculations yields a 1995 tax burden of approximately $212,000 for the subject
hotel.
As mentioned above, we have assumed that the assessed value will remain at the
historical levels, increasing by 2% per year, as provided by Proposition 13.
Applying the projected changes to the 1995 tax burden yields the following
forecast for property taxes for the subject property.
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Table 10-1 Forecast of Property Tax Expense
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1997 1998 Stabilized
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Forecast of Property Taxes (+,000) $221 $225 $230
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The subject property's tax burden is anticipated to be $221,000 in the first
year of the projection period. Thereafter, it is forecasted to increase by 2%
annually - the maximum legally permissible rate of assessment increase in the
State of California.
NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood surrounding the subject property is characterized by
high-income residential housing, light commercial land uses, and high-end retail
establishments. The subject property is located approximately two blocks south
of the boundary line of the City of Beverly Hills - one of Los Angeles's most
prominent areas. As such, Beverly Hills is the number one tourist destination in
Los Angeles, and boasts of some of the finest retail shopping in the world. Most
of the upper-end retail establishments are located approximately five blocks
northwest of the subject property, at the intersection of Wilshire Boulevard and
Rodeo Drive. Another area which is important to the subject property's lodging
neighborhood is Century City, located approximately one mile west of the subject
property. The immediate neighborhood is characterized by a high concentration of
small businesses, many of which deal with re-constructive plastic surgery. A
bank and a commercial building are located immediately south of the subject
property.
Neighborhood Conclusion
The neighborhood surrounding the Holiday Inn Select appears favorable, based on
demand for lodging properties. The subject property appears to be in an
excellent location in terms of access to and from all major roadways servicing
West Los Angeles and the Los Angeles area as a whole. Its close proximity to
both the City of Beverly Hills and Century City is an additional advantage for
the subject property.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property is situated in the City and County of Los Angeles, and the
State of California. The Los Angeles-Long Beach Metropolitan Statistical Area
(MSA) encompasses all of Los Angeles County, and is used as a basis for studying
demographic and economic changes in the subject market area. Los Angeles County
is one of five counties comprising the Los Angeles Basin. Located along the
southern portion of California's western coastline, Los Angeles County covers
approximately 4,080 square miles. The county includes the Islands of Santa
Catalina and San Clemente, and is bordered by the Pacific Ocean, as well as by
Ventura, San Bernardino, and Orange Counties. The Los Angeles-Riverside-Orange
County Consolidated Metropolitan Statistical Area (CMSA) comprises the three
metropolitan statistical areas of Los Angeles-Long Beach, Anaheim-Santa Ana, and
Riverside-San Bernardino.
The subject property is located approximately two blocks south of the Beverly
Hills city line; the City of Beverly Hills is surrounded by the Greater Los
Angeles area. The Beverly Hills area has long been known as the most prestigious
residential and commercial address in the United States. Million-dollar homes,
exclusive shopping, and celebrity gatherings are probably more strongly
associated with this area than with any other city in
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HVS International, Mineola, New York Market Area Analysis 24
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the nation. The western region of Los Angeles is of particular importance to the
subject property, and includes, in addition to Beverly Hills, the communities of
Bel Air, Brentwood, Century City, Westwood, West Los Angeles, and West
Hollywood. These cities comprise the West Los Angeles area, or, as it is
referred to locally, the Westside. The primary market for the subject property
is both urban and suburban in character and can be defined as Southern
California and, specifically, as the cities and towns that constitute the
Westside of Los Angeles County.
The Greater Los Angeles area, representing the second-largest metropolitan area
in the nation, has historically experienced some of the strongest demographic
and economic growth rates in the nation. In the early 1990s, however, the
Southern California economy was adversely affected by the national economic
recession and reductions in defense spending, which negatively impacted
aerospace manufacturing and ancillary defense organizations. Reduced need for
national security has further warranted the scheduled closure of numerous
military installations throughout California - an on-going process which is
expected to have a profound negative impact on local economies. Also, in recent
years, state population growth has outpaced job growth, creating excess demand
for public services and fiscal problems for California governments. Finally,
overbuilt real estate markets and the subsequent failure of numerous savings and
loan firms and commercial banks have exacerbated economic decline. The effects
of economic decline vary by region within the state.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc. - a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods & Poole. All dollar amounts have been
adjusted for inflation, and thus, growth or decline represents real change in
constant dollars.
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Population
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial hotel demand; this observation also holds true for
the meeting and convention segment, if a majority of the meetings are
business-oriented.
According to statistics provided by Woods & Poole Economics, the population of
Los Angeles County increased at an average annual compounded rate of 1.3%
between 1980 and 1995, and 0.6% per year from 1990 to 1995. Projections for the
period between 1995 and 2000 indicate that the rate of population growth in the
area will be weaker comparable with the short-term historical growth, with 0.2%
annual growth anticipated. Population growth for the county has been
historically lower comparable with that in the State of California, and below
the growth experienced in the United States as a whole.
Projections indicate the same trend, but with annual gains that are slower than
those experienced over the long-term historical period. Los Angeles County's
population is expected to show an average annual compounded increase of 0.2%
from 1995 to 2000, while the State of California experiences 1.1% annual growth,
and the United States anticipates smaller gains of 0.9% per year. Given that
population increases in excess of job creation rates was one of the factors that
contributed to the statewide recession of the early 1990s, the projected low
level of population growth for the county is viewed as a positive factor for the
local economy.
Retail Sales
Retail sales levels reflect both population trends and the propensity to spend
money on retail goods. There is no direct correlation between retail sales and
hotel demand; however, retail sales trends tend to gauge the economic health and
vitality of the market. Retail sales growth should cause local businesses to
prosper and make it more likely for new firms to enter the market, thus causing
an increase in the demand for lodging facilities. In areas where tourism is a
significant economic factor, retail sales also reflect the amount of visitation.
Retail sales in Los Angeles County increased at an average annual compounded
rate of 1.4% between 1990 and 1995, compared to a higher growth experienced by
the State of California and the nation of 2.1% and 2.5%, respectively.
Projections for the period between 1995 and 2000 indicate that retail sales
growth in the county will increase 0.2% annually, compared to 1.1% for the
state, and 0.9% for the United States.
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HVS International, Mineola, New York Market Area Analysis 26
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Personal Income
Of greater significance to our analysis of future market conditions are the
statistics pertaining to growth in personal income. According to the procedures
outlined in National Income and Product Accounts, personal income is calculated
by totaling earned income (wages, salaries, other labor income, and proprietor's
income), non-earned income, and residence adjustments and subtracting personal
contributions to social insurance. Trends in personal income reflect the
spending ability of local residents. Like population trends, personal income has
no direct correlation with hotel room night demand within a defined area, but
rather tends to gauge the economic health and vitality of the market.
According to Woods & Poole Economics, Inc., personal income in Los Angeles
County increased at an average annual compounded rate of 1.7% between 1980 and
1995, which was below the national average of 2.3%. Personal income in the
county between 1990 and 1995 exhibited a markedly slower annual growth rate of
0.1%. Projections indicate a significant upswing, with increases of 1.5% per
year expected. These statistics appear to indicate improving economic conditions
for the county. Personal income levels for the State of California and the
United States are also expected to reflect healthy increases, with annual gains
of 2.4% and 2.3%, respectively, projected between 1995 and 2000.
Work Force Characteristics
The key economic indicator at the regional level is employment. The
characteristics of an area's work force provide an indication of the type and
amount of transient visitation likely to be generated by local businesses.
Particular significance should be placed on the wholesale trade and services
sectors, which tend to have the greatest impact on lodging demand. The following
table sets forth the Los Angeles County work force distribution by business
sector for 1980 to 1995, 1990 to 1995, and 1995 to 2000.
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HVS International, Mineola, New York Market Area Analysis 27
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Table 4-1 Wage and Salary by Standard Industrial Classification for Los Angeles
County +(,000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent Percent Percent Percent
Industry 1980 of Total 1990 of Total 1995 of Total 2000 of Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Farm 8.4 0.2% 11.6 0.2% 8.5 0.2% 8.4 0.2%
Agriculture Services, Other 29.9 0.7 27.9 0.5 29.1 0.6 28.1 0.6
Mining 15.9 0.4 13.2 0.2 9.6 0.2 9.8 0.2
Construction 153.0 3.5 214.0 4.0 173.7 3.5 172.5 3.4
Manufacturing 938.6 21.7 894.0 16.6 702.2 14.1 685.2 13.5
Trans., Comm. & Public Utils. 214.1 5.0 248.5 4.6 236.8 4.7 231.6 4.6
Total Trade 934.2 21.6 1,128.8 21.0 1,025.1 20.5 1,009.9 20.0
Wholesale Trade 287.0 6.6 339.4 6.3 293.4 5.9 290.2 5.7
Retail Trade 647.3 15.0 789.3 14.7 731.7 14.7 719.7 14.2
Finance, Insurance, & Real Estate 382.6 8.9 484.3 9.0 432.5 8.7 447.6 8.8
Services 1,134.3 26.3 1,784.0 33.2 1,808.2 36.2 1,898.4 37.5
Total Government 508.0 11.8 572.3 10.6 564.9 11.3 569.1 11.2
Federal Civilian Govt. 74.7 1.7 74.6 1.4 70.5 1.4 65.1 1.3
Federal Military Govt. 29.7 0.7 43.0 0.8 33.0 0.7 32.2 0.6
State & Local Govt. 403.6 9.3 454.7 8.5 461.4 9.2 471.7 9.3
------- ----- ------- ----- ------- ----- ------- -----
TOTAL 4,319.0 100.0% 5,378.6 100.0% 4,990.6 100.0% 5,060.5 100.0%
<CAPTION>
Average Annual Compounded
---------------------------------
Percent Change
Industry 1980-1995 1990-1995 1995-2000
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Farm 0.1% (6.0)% (0.3)%
Agriculture Services, Other (0.2) 0.8 (0.7)
Mining (3.3) (6.1) 0.3
Construction 0.8 (4.1) (0.1)
Manufacturing (1.9) (4.7) (0.5)
Trans., Comm. & Public Utils. 0.7 (1.0) (0.4)
Total Trade 0.6 (1.9) (0.3)
Wholesale Trade 0.1 (2.9) (0.2)
Retail Trade 0.8 (1.5) (0.3)
Finance, Insurance, & Real Estate 0.8 (2.2) 0.7
Services 3.2 0.3 1.0
Total Government 0.7 (0.3) 0.1
Federal Civilian Govt. (0.4) (1.1) (1.6)
Federal Military Govt. 0.7 (5.2) (0.5)
State & Local Govt. 0.9 0.3 0.4
--- --- ---
TOTAL 1.0% (1.5)% (0.3)
</TABLE>
Source: Woods and Poole Economics, Inc.
- --------------------------------------------------------------------------------
Based on the above table, an increase of 1.0%, compounded annually, in total
employment was experienced in Los Angeles County between 1980 and 1995;
employment actually declined between 1990 and 1995, and a 1.5% annual decrease.
Employment is projected to increase slowly - by 0.3% - between 1995 and 2000.
The decline in employment from 1990 to 1995 is reflective of the recession
suffered by California in the early 1990s, as previously discussed. In
conjunction with the military downsizings and base closures affecting California
in general after the end of the Cold War, employment in the federal government
and military sectors declined at average annual compounded rates of 1.1% and
5.2%, respectively, between 1990 and 1995. Employment in the federal military
government sector is projected to continue to drop severely from 1995 to 2000,
at an anticipated rate of decline of 0.5% per year.
Locally however, signs of economic recovery began to appear in 1994. According
to Jack Kyser, Chief Economist at the Economic Development Corporation of Los
Angeles County, Inc., the recovery that is underway in California is being
driven by a variety of forces, including international trade, motion
picture/television production, tourism, wholesale trade, the resale housing
market, and even a modest upturn in new home
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HVS International, Mineola, New York Market Area Analysis 28
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construction. Factors suggesting a promising economic outlook include Los
Angeles's advantageous location on the Pacific Rim, one of the world's most
rapidly developing areas. The North American Free Trade Agreement, intended to
establish the largest free-trade block in the world, is anticipated to catalyze
manufacturing and related growth. Expansions are underway at both the Port of
Los Angeles and the Port of Long Beach, as well as at the Los Angeles
International Airport. According to economists, increased trade will equate to
increased travel. Furthermore, in response to the current economic imbalance,
supply and demand forces are expected to lower the cost of living and conducting
business in the state. State governing bodies have already drafted legislation
to curtail the state's "anti-business" reputation, including investment,
research and development, and tax incentives. Lodging demand, which has already
demonstrated a considerable resurgence, is expected to mirror the trend of the
overall state economy, with healthy, gradual expansion over the long term.
The entertainment industry, which is estimated to employ directly and indirectly
450,000 people, continues to be the region's economic juggernaut. The
entertainment industry is anticipated to continue contributing to the local
economy, as major plans for expansions have been announced. MCA has announced
plans for a $3-billion expansion at Universal City; Sony is investing roughly
$100 million in its lot in Culver City; and Warner Brothers reportedly intends
to expand its lots in Burbank. The entertainment industry, in fueling the
recovery for the region, has surprisingly taken over as the primary economic
growth force. After suffering tumultuous attrition since 1991, the once-ailing
aerospace and defense industry received a significant boost in 1995. Long
Beach-based McDonnell Douglas received an order for 80 C-17 cargo planes from
the U.S. Air Force. The order is estimated to affect 10,000 workers. McDonnell
Douglas and Seattle-based Boeing jointly received a $6-billion order from Saudi
Arabia for 61 commercial aircraft. Such development in the local and regional
economy is considered to be a positive trend, and is expected to have a
beneficial impact on lodging demand.
The major employers in immediate vicinity of the subject property's market area
represent a cross section of hotel demand potential. Some are national in scope,
while others operate on a more local basis; some are engaged in services, and
others are active in the entertainment industry. The following table outlines
some of the major employers in Los Angeles/Beverly Hills market area.
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HVS International, Mineola, New York Market Area Analysis 29
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Table 4-2 Major Employers
- --------------------------------------------------------------------------------
Company Business/Product Employees
- --------------------------------------------------------------------------------
Fox Entertainment, Inc. Entertainment >1,000
City of Beverly Hills Government 900
Beverly Hilton Hotel Hotel 680
Regent Beverly Wilshire Hotel 600
Beverly Hills Unified School District Education 600
Nieman-Marcus Retail 500
Beverly Hills Hotel Hotel 425
William Morris Agency Talent Agency 400
Creative Artists Agency Talent Agency 375
City National Bank Finance 370
Saks Fifth Avenue Retail 325
Peninsula Beverly Hills Hotel 310
Shapell Industries, Inc. Development 309
Advance Building Maintenence Building Maintenance 300
Hilton Hotels Corporation Hotel Company, Headquarters 300
International Creative Management Talent Agency 280
Source: Beverly Hills Chamber of Commerce
- --------------------------------------------------------------------------------
Office Space
Office space vacancy rates have been declining both in the West Los Angeles
area, where the subject property is located, as well as in the City of Beverly
Hills, bordering the subject property. According to Grubb & Ellis, the office
vacancy level fell to 14.9% in 1995 for Beverly Hills, which was slightly lower
than the total vacancy level for the entire West Los Angeles area, at 15.2%.
Airport Traffic
Airport passenger counts are an important indicator of transient lodging demand.
Depending on the type of service provided by a particular airfield, a sizable
percentage of arriving passengers may require hotel accommodations. Trends in
passenger counts also reflect local business activity and the overall economic
health of an area.
The subject property is located within approximately ten miles of the Los
Angeles International Airport (LAX). Total passenger volume at LAX increased at
an average annual compounded rate of 3.3% between 1980 and 1995. In 1991,
passenger activity dropped a minimal 0.3%; however, since 1992, total passenger
volume has grown each year, with 1995 recording a healthy 5.6% increase.
Overall, the pattern of growth illustrated by the
<PAGE>
HVS International, Mineola, New York Market Area Analysis 30
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passenger traffic trends at Los Angeles International Airports is a favorable
economic trend for the subject property.
Leisure Travel
Leisure demand in the subject property's market is generated primarily by
tourists and others visiting the Los Angeles area. The area's proximity to
Hollywood and the related entertainment industry attractions, together with the
high profile image of Beverly Hills and the residents thereof, generate a
significant amount of tourism and leisure demand each year. This demand is both
national and international in nature, and includes individuals utilizing rooms
purchased through a travel package which typically includes airfare, lodging and
transportation (usually a rental car).
Tourist Attractions
Tourism is an identifiable source of employment, business profits, and lodging
demand generation in California. Two of the nation's leading visitor attractions
- - Disneyland and Knott's Berry Farm - are located in the nearby Orange County.
In addition, Universal Studios and other Hollywood studios are situated in the
Los Angeles. These attractions alone serve more than 20 million visitors
annually.
Because of the national recession, tourism-related visitation to Los Angeles
County declined slightly in the early 1990s; however, the City of Beverly Hills
has experienced positive growth trends over the past few years. In addition, the
city's famed shopping district continue to attract visitors to Beverly Hills,
creating significant leisure demand for the subject property.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area can expect to benefit from stable growth, barring any
unforeseen downturns or upswings in the economy. The following table summarizes
the economic and demographic trends discussed throughout this section. All
figures that reflect dollar amounts have been adjusted for inflation, and thus,
reflect real change. It should be noted that the percent changes indicated in
the following tables are based on unrounded figures, and thus, may not calculate
exactly.
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HVS International, Mineola, New York Market Area Analysis 31
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+,000)
Los Angeles County 1980-1995 7,502.5 9,167.9 1.3%
Los Angeles-Long Beach, CA MSA 1980-1995 7,502.5 9,167.9 1.3
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 11,556.2 15,440.7 2.0
State of California 1980-1995 23,792.8 31,809.5 2.0
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+,000)
Los Angeles County 1990-1995 8,881.3 9,167.9 0.6
Los Angeles-Long Beach, CA MSA 1990-1995 8,881.3 9,167.9 0.6
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 14,599.8 15,440.7 1.1
State of California 1990-1995 29,905.4 31,809.5 1.2
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+,000)
Los Angeles County 1995-2000 9,167.9 9,255.5 0.2
Los Angeles-Long Beach, CA MSA 1995-2000 9,167.9 9,255.5 0.2
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 15,440.7 16,121.4 0.9
State of California 1995-2000 31,809.5 33,677.8 1.1
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+,000,000)
Los Angeles County 1980-1995 48,207.5 57,694.3 1.2
Los Angeles-Long Beach, CA MSA 1980-1995 48,207.5 57,694.3 1.2
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 74,863.7 99,715.6 1.9
State of California 1980-1995 154,157.0 208,913.4 2.0
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+,000,000)
Los Angeles County 1990-1995 53,917.5 57,694.3 1.4
Los Angeles-Long Beach, CA MSA 1990-1995 53,917.5 57,694.3 1.4
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 91,141.2 99,715.6 1.8
State of California 1990-1995 187,935.6 208,913.4 2.1
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+,000,000)
Los Angeles County 1995-2000 57,694.3 58,175.4 0.2
Los Angeles-Long Beach, CA MSA 1995-2000 57,694.3 58,175.4 0.2
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 99,715.6 104,102.9 0.9
State of California 1995-2000 208,913.4 221,038.5 1.1
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Los Angeles County 1980-1995 6,425.6 6,293.1 (0.1)
Los Angeles-Long Beach, CA MSA 1980-1995 6,425.6 6,293.1 (0.1)
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 6,478.2 6,458.0 (0.0)
State of California 1980-1995 6,479.1 6,567.6 0.1
United States 1980-1995 5,900.6 6,719.5 0.9
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 32
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Retail Sales Per Capita
Los Angeles County 1990-1995 6,070.9 6,293.1 0.7%
Los Angeles-Long Beach, CA MSA 1990-1995 6,070.9 6,293.1 0.7
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 6,242.6 6,458.0 0.7
State of California 1990-1995 6,284.3 6,567.6 0.9
United States 1990-1995 6,244.5 6,719.5 1.5
Projected Personal Retail Sales Per Capita
Los Angeles County 1995-2000 6,293.1 6,285.5 (0.0)
Los Angeles-Long Beach, CA MSA 1995-2000 6,293.1 6,285.5 (0.0)
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 6,458.0 6,457.4 (0.0)
State of California 1995-2000 6,567.6 6,563.3 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+,000,000)
Los Angeles County 1980-1995 5,228.0 6,885.5 1.9
Los Angeles-Long Beach, CA MSA 1980-1995 5,228.0 6,885.5 1.9
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 8,043.3 11,493.2 2.4
State of California 1980-1995 16,496.4 24,107.7 2.6
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+,000,000)
Los Angeles County 1990-1995 6,330.1 6,885.5 1.7
Los Angeles-Long Beach, CA MSA 1990-1995 6,330.1 6,885.5 1.7
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 10,415.7 11,493.2 2.0
State of California 1990-1995 21,487.0 24,107.7 2.3
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+,000,000)
Los Angeles County 1995-2000 6,885.5 7,162.7 0.8
Los Angeles-Long Beach, CA MSA 1995-2000 6,885.5 7,162.7 0.8
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 11,493.2 12,369.8 1.5
State of California 1995-2000 24,107.7 26,276.2 1.7
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales Per Capita
Los Angeles County 1980-1995 696.8 751.0 0.5
Los Angeles-Long Beach, CA MSA 1980-1995 696.8 751.0 0.5
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 696.0 744.3 0.4
State of California 1980-1995 693.3 757.9 0.6
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales Per Capita
Los Angeles County 1990-1995 712.8 751.0 1.1
Los Angeles-Long Beach, CA MSA 1990-1995 712.8 751.0 1.1
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 713.4 744.3 0.9
State of California 1990-1995 718.5 757.9 1.1
United States 1990-1995 646.3 704.1 1.7
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 33
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Eating and Drinking Place Sales Per Capita
Los Angeles County 1995-2000 751.0 773.9 0.6%
Los Angeles-Long Beach, CA MSA 1995-2000 751.0 773.9 0.6
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 744.3 767.3 0.6
State of California 1995-2000 757.9 780.2 0.6
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+,000,000)
Los Angeles County 1980-1995 124,705.7 160,992.6 1.7
Los Angeles-Long Beach, CA MSA 1980-1995 124,705.7 160,992.6 1.7
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 191,005.0 270,385.0 2.3
State of California 1980-1995 389,309.0 568,838.9 2.6
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
Short-Term Historical Personal Income (+,000,000)
Los Angeles County 1990-1995 160,353.5 160,992.6 0.1
Los Angeles-Long Beach, CA MSA 1990-1995 160,353.5 160,992.6 0.1
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 262,501.3 270,385.0 0.6
State of California 1990-1995 537,579.6 568,838.9 1.1
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+,000,000)
Los Angeles County 1995-2000 160,992.6 173,579.9 1.5
Los Angeles-Long Beach, CA MSA 1995-2000 160,992.6 173,579.9 1.5
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 270,385.0 301,062.6 2.2
State of California 1995-2000 568,838.9 641,646.6 2.4
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Los Angeles County 1980-1995 16,622.0 17,560.0 0.4
Los Angeles-Long Beach, CA MSA 1980-1995 16,622.0 17,560.0 0.4
Los Angeles-Riverside-Orange County, CA CMSA 1980-1995 16,528.0 17,511.0 0.4
State of California 1980-1995 16,362.0 17,883.0 0.6
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Los Angeles County 1990-1995 18,055.0 17,560.0 (0.6)
Los Angeles-Long Beach, CA MSA 1990-1995 18,055.0 17,560.0 (0.6)
Los Angeles-Riverside-Orange County, CA CMSA 1990-1995 17,980.0 17,511.0 (0.5)
State of California 1990-1995 17,976.0 17,883.0 (0.1)
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Los Angeles County 1995-2000 17,560.0 18,754.0 1.3
Los Angeles-Long Beach, CA MSA 1995-2000 17,560.0 18,754.0 1.3
Los Angeles-Riverside-Orange County, CA CMSA 1995-2000 17,511.0 18,675.0 1.3
State of California 1995-2000 17,883.0 19,053.0 1.3
United States 1995-2000 16,908.0 18,097.0 1.4
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 34
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Employment - Los Angeles County (+,000)
Farm 1980-1995 8.4 8.5 0.1%
Agriculture Services, Other 1980-1995 29.9 29.1 (0.2)
Mining 1980-1995 15.9 9.6 (3.3)
Construction 1980-1995 153.0 173.7 0.8
Manufacturing 1980-1995 938.6 702.2 (1.9)
Trans., Comm. & Public Utils 1980-1995 214.1 236.8 0.7
Total Trade 1980-1995 934.2 1,025.1 0.6
Wholesale Trade 1980-1995 287.0 293.4 0.1
Retail Trade 1980-1995 647.3 731.7 0.8
Finance, Insurance, & Real Estate 1980-1995 382.6 432.5 0.8
Services 1980-1995 1,134.3 1,808.2 3.2
Total Government 1980-1995 508.0 564.9 0.7
Federal Civilian Govt 1980-1995 74.7 70.5 (0.4)
Federal Military Govt 1980-1995 29.7 33.0 0.7
State & Local Govt 1980-1995 403.6 461.4 0.9
TOTAL 1980-1995 4,319.0 4,990.6 1.0
Short-Term Historical Employment - Los Angeles County (+,000)
Farm 1990-1995 11.6 8.5 (6.0)
Agriculture Services, Other 1990-1995 27.9 29.1 0.8
Mining 1990-1995 13.2 9.6 (6.1)
Construction 1990-1995 214.0 173.7 (4.1)
Manufacturing 1990-1995 894.0 702.2 (4.7)
Trans., Comm. & Public Utils 1990-1995 248.5 236.8 (1.0)
Total Trade 1990-1995 1,128.8 1,025.1 (1.9)
Wholesale Trade 1990-1995 339.4 293.4 (2.9)
Retail Trade 1990-1995 789.3 731.7 (1.5)
Finance, Insurance, & Real Estate 1990-1995 484.3 432.5 (2.2)
Services 1990-1995 1,784.0 1,808.2 0.3
Total Government 1990-1995 572.3 564.9 (0.3)
Federal Civilian Govt 1990-1995 74.6 70.5 (1.1)
Federal Military Govt 1990-1995 43.0 33.0 (5.2)
State & Local Govt 1990-1995 454.7 461.4 0.3
TOTAL 1990-1995 5,378.6 4,990.6 (1.5)
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 35
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================================================================================
Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Employment - Los Angeles County (+,000)
Farm 1995-2000 8.5 8.4 (0.3%)
Agriculture Services, Other 1995-2000 29.1 28.1 (0.7)
Mining 1995-2000 9.6 9.8 0.3
Construction 1995-2000 173.7 172.5 (0.1)
Manufacturing 1995-2000 702.2 685.2 (0.5)
Trans., Comm. & Public Utils 1995-2000 236.8 231.6 (0.4)
Total Trade 1995-2000 1,025.1 1,009.9 (0.3)
Wholesale Trade 1995-2000 293.4 290.2 (0.2)
Retail Trade 1995-2000 731.7 719.7 (0.3)
Finance, Insurance, & Real Estate 1995-2000 432.5 447.6 0.7
Services 1995-2000 1,808.2 1,898.4 1.0
Total Government 1995-2000 564.9 569.1 0.1
Federal Civilian Govt 1995-2000 70.5 65.1 (1.6)
Federal Military Govt 1995-2000 33.0 32.2 (0.5)
State & Local Govt 1995-2000 461.4 471.7 0.4
TOTAL 1995-2000 4,990.6 5,060.5 0.3
</TABLE>
Source: Woods & Poole Economics, Inc.
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Market Area Analysis 36
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================================================================================
Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Office Space:
- ------------ Rentable Available Net Asking Monthly Rents
Square Square Vacancy Absorption --------------------
Year Feet Feet Rate 1994 Low High
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Beverly Hills
1989 4,814,000 535,000 11.1% 152,000 $1.45 $3.25
1990 5,189,000 1,034,000 19.9 (81,000) 2.00 3.35
1991 5,523,000 1,257,000 22.8 34,000 1.50 3.50
1992 5,525,000 1,136,000 20.6 125,000 1.50 3.50
1993 5,416,000 1,280,000 23.6 (150,000) 1.60 2.80
1994 5,100,000 1,120,000 22.0 65,000 1.45 2.75
1995 4,923,000 735,000 14.9 200,000 2.15
West Los Angeles Total
1989 40,214,000 5,433,000 13.5% 1,728,000 $1.00 $4.00
1990 42,240,000 6,441,000 15.2 570,000 1.25 4.30
1991 43,863,000 8,829,000 20.1 181,000 0.95 3.95
1992 44,088,000 8,383,000 19.0 1,000,000 0.99 3.95
1993 44,134,000 8,190,000 18.6 165,000 1.00 3.60
1994 43,280,000 7,255,000 16.8 735,000 1.00 3.50
1995 42,703,000 6,491,000 15.2 314,000 1.86
</TABLE>
Source: Grubb & Ellis
Airport Statistics:
- ------------------
Passenger
Year Traffic Totals % Change
- ------------------------------------------
1980 33,040,032 ---
1981 32,722,534 (1.0)%
1982 32,383,105 (1.0)
1983 33,426,731 3.2
1984 34,361,715 2.8
1985 37,647,983 9.6
1986 41,417,867 10.0
1987 44,873,113 8.3
1988 44,398,611 (1.1)
1989 44,967,221 1.3
1990 45,810,221 1.9
1991 45,668,204 (0.3)
1992 46,964,555 2.8
1993 47,844,794 1.9
1994 51,050,275 6.7
1995 53,909,223 5.6
Annual Average Compounded
Percent Change, 1980-95: 3.3%
Source: Los Angeles Department of Airports
Projected Airport Statistics:
- ----------------------------
Passenger
Year Traffic Totals % Change
- --------------------------------------------
1996 57,600,000 ---
1997 59,100,000 2.6%
1998 60,500,000 2.4
1999 62,100,000 2.6
2000 63,700,000 2.6
Annual Average Compounded
Percent Change, 1996-2000: 0.3%
Source: Federal Aviation Administration
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 37
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The Lodging Market Supply and Demand Analysis section of this economic study and
appraisal will relate these historical and projected growth trends to specific
market segments based on their propensity to reflect visitation. This analysis
will provide a basis for forecasting changes in room night demand in the subject
property's area.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 38
Affecting the U.S. Lodging Industry
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================================================================================
5. Overview of External Forces Affecting
the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 39
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
<PAGE>
HVS International, Mineola, New York Overview of External Forces 40
Affecting the U.S. Lodging Industry
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
non-performing hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
<PAGE>
HVS International, Mineola, New York Overview of External Forces 41
Affecting the U.S. Lodging Industry
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 42
Affecting the U.S. Lodging Industry
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 43
Affecting the U.S. Lodging Industry
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $ 91,000 $ 85,000 $792,000 $ 80,000 $ 83,000
</TABLE>
Source: HVS International
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<PAGE>
HVS International, Mineola, New York Overview of External Forces 44
Affecting the U.S. Lodging Industry
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 45
Affecting the U.S. Lodging Industry
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 46
Affecting the U.S. Lodging Industry
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
-------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 4.8 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Source: Smith Travel Research & HVS International
* Projected
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates
<PAGE>
HVS International, Mineola, New York Overview of External Forces 47
Affecting the U.S. Lodging Industry
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that during periods of prosperity, room rates are a good hedge against
inflation; this was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
<PAGE>
HVS International, Mineola, New York Overview of External Forces 48
Affecting the U.S. Lodging Industry
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forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the average
sales price per room peaked at $75,000. This was more than twice the 1981
average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 49
Affecting the U.S. Lodging Industry
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================================================================================
Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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<TABLE>
<CAPTION>
Annual Percent Change
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20% 16% 13% 1% -10% 3% -13% 3% 28% 67%
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the
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operating results and investment potential of lodging facilities. The following
list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
O No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
O An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
O The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
O Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
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o As shown by the historical data, hotel room O rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This is a good indication that hotel values will return to record
levels in the next two to four years.
O The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
O Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
O Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell, once
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prices begin to approach levels that allow the existing (or restructured) debt
to be paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results must take into
account at least a portion of any upside created from improved performance,
particularly if the improvement can be readily achieved through management
efficiencies. Capitalization rates based on historical operating income have
fallen during the past several years. Hotel buyers in today's market must be
aggressive in all of their acquisition assumptions. As a result, hotel values in
some parts of the country are approaching the levels registered during the
mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated-room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Room Supply and Demand Trends (STR)
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<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 1,606 1,634* 1,634 1,634 1,634 1,634 1,634
Annual Guestroom Supply 586,085 596,410 596,410 596,410 596,410 596,410 596,410
Percent Change -- 1.8% 0.0% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 404,399 406,752 370,371 396,016 380,510 386,474 416,294
Percent Change -- 0.6% -8.9% 6.9% -3.9% 1.6% 7.7%
Occupancy 69.0% 68.2% 62.1% 66.4% 63.8% 64.8% 69.8%
Percent Change -- -1.2% -8.9% 6.9% -3.9% 1.6% 7.7%
Average Rate $77.90 $78.56 $77.71 $72.86 $76.57 $79.39 $79.68
Percent Change -- 0.8% -1.1% -6.2% 5.1% 3.7% 0.4%
RevPAR $53.75 $53.58 $48.26 $48.38 $48.85 $51.44 $55.62
Percent Change -- -0.3% -9.9% 0.3% 1.0% 5.3% 8.1%
</TABLE>
Year-to-Date Through August Average Annual
--------------------------- Compounded Growth
1995 1996 1989 - 1995
- -------------------------------------------------------------------------
Number of Rooms 1,634 1,627
Annual Guestroom Supply 397,062 --- 397,062
Percent Change -- 0.0% 0.3%
Room Night Demand 278,738 302,958
Percent Change -- 8.7% 0.5%
Occupancy 70.2% 76.3%
Percent Change -- 8.7% 0.2%
Average Rate $80.30 $85.50
Percent Change -- 6.5% 0.4%
RevPAR $56.37 $65.24
Percent Change -- 15.7% 0.6%
* The 175-room Ramada West Hollywood opened in March of 1989.
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus,
they are considered relevant to this study. In the subject property's market,
all hotels reported to Smith Travel. However, we were unable to include the
Holiday Inn Hollywood, due to the large number of Holiday Inn properties in the
subject properties competitive set and STR restrictions concerning brand
representation - i.e., no one brand can comprise more than 35% of the total
supply.
Over the past six years, supply has remained stable throughout the projection
period, with the exception of 1990, when supply increased by 28 rooms as a
result of the opening of the 175-room Ramada West Hollywood in 1989. The
increase of 28 rooms reflects the first full year of operation for this property
in 1990. During the same period, demand in the subject property's competitive
market has increased marginally, with a compounded growth of 0.5% over the
six-year period. Demand declined by 8.9% in 1991, as a result of the negative
impact of the Persian Gulf War, as well as the deepening of the national
recession. In 1992, the market recovered much of the lost demand, registering an
increase of 6.9%. This increase in demand was also partially attributable to it
being an election year, which reportedly causes a surge in demand in the subject
market area as a result of fund raising and other campaign activities. In 1993,
with the economic recession actually deepening in California, demand fell again
by 3.9%. The last two years reflect the beginnings of the economic recovery in
the state, as the demand increased by 1.6% and 7.7% in 1994 and 1995,
respectively. Year-to-date through August figures reflect a even better picture,
with growth of 8.7%. The overall room night demand resulted in occupancy
increasing from 69.0% in 1989 to 69.8% in 1995.
Between 1989 and 1995 average rates increased by a 0.4% compounded growth rate.
In both 1991 and 1992, the areawide average rate decreased - by 1.1% and 6.2%,
respectively. In large part, this trend may be attributed to the response of
local hotel management to the decline in occupancy that occurred in 1991, and
represents the initiative to increase occupancy by offering lower prices.
Average rates recovered significantly in 1993 and 1994, with the 1994 average
surpassing that achieved in 1989. A more moderate
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increase (0.4%) was recorded in 1995; however, the concurrent surge in occupancy
resulted in a substantial 8.1% increase in RevPAR.
Figures for the average rate for the year-to-date through August 1996 indicate
an increase of 6.5% over the same period. This rise is a reflection of a
stronger Californian economy, which is confirmed in both occupancy and average
rate trends for the year. The occupancy and average trends in the Beverly Hills
market resulted in the RevPAR increasing by a compounded growth rate of 0.6% for
the six year period between 1989 and 1995. However, as with occupancy and
average rate, the pattern of growth indicates an accelerating positive trend,
and suggests that the market may expect to experience stronger than historical
average rates of increase over the near term, as the current cycle evolves.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in Beverly Hills
market area is generated primarily by the following four market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Segment 4 Airline
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 distribution of accommodated hotel room night
demand as follows.
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Table 6-2 1996 Accommodated Room Night Demand
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1996 Annual Room Night Demand (Rounded)
----------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 155,000 37% 9,000 13%
Meeting and Group 46,000 11 5,000 7
Leisure 162,000 38 40,000 55
Airline 60,000 15 18,000 25
------- --- ------ ---
Totals 424,000 100% 72,000 100%
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Leisure demand predominated in the competitive market in 1996, constituting 38%
of total room night demand, which and followed closely by the commercial segment
at 37%, airline segment at 15%, and the meeting and group segment at 10%. Room
night demand at the subject property was somewhat different, and was dominated
by the leisure segment at 55%, followed by the airline segment at 25%, the
commercial segment at 13%, and meeting and group segment, at 7% of the subject
property's demand.
Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual businesspeople who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
Commercial demand in the subject property's market is generated by a wide
variety of corporations, with the entertainment industry exhibiting
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some dominance. The area also offers a high concentration of retail outlets,
with high recognition stores such as Neiman Marcus, Saks Fifth Avenue, and
Barney's New York. The subject property along with most of its competitors
derive a majority of their commercial demand from the immediate Beverly Hills
market area. In recent years Beverly Hills has become headquarters to
corporations such as the Hilton Hotel Corporation, the City National Bank, and
Playboy Enterprises Inc. In addition to these above-mentioned corporations,
Beverly Hills has long been associated with the concept of being the world
headquarters for the business of entertainment, for this is where the industry's
performers, agents, producers, bank entertainment divisions, lawyers, and
accountants congregate. The Motion Picture Academy and the industry libraries
and museums are also headquartered here. The four largest talent agencies are
located in Beverly Hills, along with over 600 entertainment-related firms that
have business licenses from the City of Beverly Hills. Immediately adjacent is
the Fox Studios, the largest employer for the Beverly Hills area; whereas the
studios of Sony pictures/MGM, Viacom/Paramount, Universal, Culver,
Sunset-Grover, Raleigh, Hanna-Barbera Productions, KCOP, KTLA, KTTV, and CBS
Television City are within the five-mile business circle. The area immediately
surrounding the subject property also has a high concentration of medical
business, which specialize in rehabilitation facilities and plastic surgery
clinics. All these demand generators provide the Beverly Hills market with
commercial demand.
The commercial segment at the subject property has been fairly low, at 13%,
compared to the rest of the competitive market, which is able to generate
approximately 37% of its business from this segment. This low percentage can be
attributed to the historically poor condition of the hotel and its consequent
inability to attract and serve the commercial segment of the market. The
completion of the renovation, together with the reflagging of the hotel as a
Holiday Inn Select -- a brand which is well regarded by business travelers --
should enable the property to significantly improve its competitive position in
the local market. Such an improvement will have a beneficial affect on average
rate as this segment is characterized by some of the highest rates in the
market.
We generally find a multiplier effect between employment growth in certain
sectors and the increase in commercial lodging demand (i.e., one new FIRE
employee will correspond to more than one new visitor). In conjunction with the
recent strengthening of the California economy as the recession abates,
commercial demand in the local area has increased at an
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accelerating pace. Smith Travel Research estimates that total hotel demand in
the competitive market rose by an average annual compounded rate of 0.6% between
1989 and 1995; however, total demand increased by 7.7% in 1995 and by 8.7% in
the year-to-date through August of 1996. We project that commercial demand
(which comprises more than 37% of the total market) will increase by 3.0% over
the remainder of the decade before stabilizing at 2.5% annually in subsequent
years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group demand in the subject property's market as a whole is fairly
low. Most of this demand is generated by the higher rated hotels in the Beverly
Hills market, and is generally related to the entertainment industry as well as
higher profile businesses located in the region. In 1996, the subject property
derived approximately 7% of its room night demand from this segment, as compared
to 11% for the market as a whole. Most of the subject property's meeting and
group demand is generated by tour and travel business. Additional meeting and
group demand is generated through SMERF, Corporate, contract and association
businesses.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on
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commercial travel also affect meeting and group demand. The exception is
non-commercial meetings, which are tied to the economic factors that influence
leisure travel. It should be noted that meetings and similar events are booked
in advance, and thus, growth in this segment tends to lag slightly behind
increases in commercial demand.
Based on the economic and demographic data pertaining to commercial demand, as
previously discussed, we estimate that meeting and group demand in the Beverly
Hills market area will also increase at a stable rate. Specifically, we project
meeting and group room night demand to increase by 2.0% through the Year 2000.
Thereafter, we project meeting and group demand growth to stabilize at 1.5%,
beginning in 2001.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations.
Leisure demand in the subject property's market is generated primarily by
tourists and others visiting the Los Angeles area. The area's proximity to
Hollywood and the related entertainment industry attractions, together with the
high profile image of Beverly Hills and the residents thereof, generate a
significant amount of tourism and leisure demand each year. This demand is both
national and international in nature, and includes individuals utilizing rooms
purchased through a travel package which typically includes airfare, lodging and
transportation (usually a rental car).
Leisure demand predominates the Beverly Hills market, accounting for 38% of the
total demand. However, the subject property receives roundly 55%
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of its room night demand from this segment. A majority of this demand consists
of the aforementioned package tours, which are generally characterized by a
relatively low rate. Historically, the hotel has relied on this segment of the
market due to its inability to compete successfully in the more profitable
segments of the market. With the completion of the renovation and the concurrent
upgrade in the hotel's brand affiliation, the Holiday Inn should be able to
decrease its reliance on the low rated component of this segment, replacing this
business with the more desirable commercial segment.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections.
With the Californian economy as well as the national economy picking up, the
number of visitors coming into the Beverly Hills market has grown in the last
two years. Based on our review of the economic and demographic data and trends
pertaining to the subject property's market for leisure demand, it is
anticipated that leisure demand will grow at a rate of 1% annually throughout
the projection period.
Airline Segment
Airline demand is generated by flight crews and delayed passengers. The airlines
typically contract rooms in nearby lodging facilities for extended periods to
ensure the availability of accommodations for their crews. Because they are able
to guarantee a specific level of usage on a daily basis, airlines can usually
negotiate deeply discounted room rates. This type of demand is advantageous
because it provides a base level of occupancy over a long period that normally
includes weekends and slow seasons. The occupancy benefit is offset by low
contract room rates, which have an adverse impact on average rate. Skilled hotel
operators use airline patronage to fill in during periods of low occupancy, and
quickly displace this demand when higher-rated market segments offer better
potential.
The subject property received 25% of its room night demand in 1996 from the
airline segment. This demand is derived from a contract with Northwest Airlines
for approximately 25 rooms a night, which represents a reduction from the 40
rooms per night utilized by Northwest staff in 1995. However, although the
contract is for 25 rooms, this year, the airline has frequently continued to use
as many as 55 rooms per night. In addition,
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during the first half of 1996, the subject property maintained a contract with
Aeroflot for an additional 22 rooms per night. This contract was terminated in
May of this year.
All these airline contracts resulted in the subject property actually
accommodating more airline rooms in 1996 than in any previous year. Although
these room nights have bolstered occupancy, the hotel's average rate has been
adversely affected, as the year-to-date average rate for this segment is $39.00,
as compared to the roundly $70.00 average rate achieved in the leisure and
meeting and group segment and the $90.00 average achieved in the commercial
segment.
As previously mentioned, the completion of the recent renovation and reflagging
of the hotel as a Holiday Inn are expected to result in an improved competitive
position for the hotel, particularly with respect to the commercial segment of
the market. As the property realizes growth in this market segment, management
is anticipated to decrease reliance on the lower rated airline contract segment.
This process has already been initiated with the termination of the Aeroflot
contract, and is expected to continue as the Holiday Inn's management limits the
number of additional (over 40) room nights accepted from Northwest. At present,
only one other hotel among the primary competitors currently accommodates
airline contract demand. Moreover, the market is sufficiently strong that we do
not anticipate any other hotels will accept this demand in the near future. As a
result, the decrease in contract room night demand accommodated by the subject
property is expected to result in a decrease in total airline contract demand in
the market. In recognition of this anticipated market dynamic, we have projected
a decline of 8.0% in 1997 for the airline segment. Subsequently, airline demand
is expected to remain stable, and thus, no change is forecasted.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, four segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
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Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rates
-----------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Commercial 3.0% 3.0% 3.0% 3.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 2.0 1.5 1.5
Leisure 1.0 1.0 1.0 1.0 1.0 1.0
Airline -8.0 0.0 0.0 0.0 0.0 0.0
Annual Average Growth 0.6% 3.3% 3.2% 1.7% 1.3% 1.3%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Beverly Hills lodging market is
characterized by many of Los Angeles's most renowned lodging facilities, as well
as numerous other first class and full-service hotels. Beverly Hills enjoys a
reputation as a world-class leader in the travel and hospitality industry. For
group functions, Beverly Hills and the surrounding Westside Los Angeles area is
one of the world's largest luxury hotel venues with 6,600 deluxe rooms within a
five-mile radius. Moreover, metropolitan Los Angeles is one of the largest
hotels market in the world with 91,000 total rooms. When major functions or
international events come to Los Angeles, their senior representatives most
frequently stay in Beverly Hills, while the larger body of delegates are placed
in surrounding properties. The subject property along with its competitive
properties are uniquely placed in the Beverly Hills market, as they offer an
opportunity for some of the lower rated business to continue to enjoy the
benefits of Beverly Hills.
We have identified five properties that are considered primarily competitive
with the Holiday Inn Select. Including the subject property, these primary
competitors total 1,495 rooms. Four additional lodging facilities are judged to
be only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The room count of each secondary competitor has been weighted to reflect the
degree to which it competes with the Holiday
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Inn Select; the aggregate weighted room count of the secondary competitors is
322 guestrooms.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
penetration factors; penetration is the ratio between a specific hotel's
operating results and the corresponding data for the market. If the penetration
factor is greater than 100%, the property is performing better than the market
as a whole; conversely, if the penetration is less than 100%, the hotel is
performing at a level below the marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
---------------------------------- ---------------------------
Year Number Meeting Meeting Meeting Average
Property/Location Opened of Rooms Space Space/Room Comm. & Group Leisure Airline Occupancy Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
1150 S. Beverly Drive 1971 260 4,945 19 13 7 55 25 68.1 $58.54 $39.87
Marriott Courtyard *
10320 W. Olympic Blvd 1988 134 400 3 75 5 20 0 75.0 95.00 71.25
Holiday Inn Express **
10330 W. Olympic Blvd 1987 47 -- -- 70 0 30 0 38.0 83.00 31.54
Doubletree Westwood ***
10740 Wilshire Blvd 1963 295 7,000 24 35 15 15 35 78.0 68.00 53.04
Ramada West Hollywood
8585 Santa Monica Blvd 1989 175 400 2 45 5 50 0 71.0 81.00 57.51
Hyatt on Sunset
8401 Sunset Blvd 1972 262 4,000 15 40 8 52 0 77.0 78.00 60.06
- ------------------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 1,173 2,791 11 39 9 38 15 72.6% $73.82 $53.59
Secondary Competition 322 -- -- 29 20 38 13 70.0% $77.83 $54.48
Totals and Averages 1,495 -- -- 37 11 38 14 71.9% $74.65 $53.71
<CAPTION>
Estimated 1996
---------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate RevPAR Penetration Penetration
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
1150 S. Beverly Drive 77.0 $64.50 $49.67 99.0 80.2
Marriott Courtyard *
10320 W. Olympic Blvd 79.0 101.00 79.79 101.6 128.9
Holiday Inn Express **
10330 W. Olympic Blvd 64.0 93.00 59.52 82.3 96.1
Doubletree Westwood ***
10740 Wilshire Blvd 83.0 70.00 58.10 106.8 93.8
Ramada West Hollywood
8585 Santa Monica Blvd 79.0 90.00 71.10 101.6 114.8
Hyatt on Sunset
8401 Sunset Blvd 80.0 85.00 68.00 102.9 109.8
- ------------------------------------------------------------------------------------
Sub-Totals and Averages 79.2 $79.45 $62.92 101.9 101.6
Secondary Competition 73.0 $80.40 $58.70 93.9 94.8
Totals and Averages 77.7 $79.65 $61.92 100.0 100.0
</TABLE>
* This property originally opened as a Days Inn and converted into the
Chesterfield Hotel before converting into the Marriott Courtyard two years
ago
** The Holiday Inn Express was the old Century City Inn Hotel, which
converted in April, 1996 to a Holiday Inn Express
*** The Doubletree Hotel was the old Holiday Inn Westwood, which recently
converted in July, 1996
- --------------------------------------------------------------------------------
<PAGE>
COMPETITION MAP
[GRAPHIC OMITTED]
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HVS International, Mineola, New York Lodging Market Supply and Demand 67
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Our survey of the primarily competitive hotels in the Beverly Hills market show
many of the nationally recognized full service and limited service properties in
the neighboring competitive market. These properties range in size from 47 to
295 rooms, and their ages range from 7 to 33 years. The market demand has a
commercial orientation; in 1996, this segment contributed 39% of the overall
occupancy. The leisure segment comprised 38% of the total, followed by the
airline segment at 15%, and the meeting and group segment, at 9%.
In 1996, the primary competitors achieved an overall occupancy of 79.2% at an
average rate of $79.45, yielding a RevPAR of $62.92. The Doubletree Westwood was
the market leader in terms of occupancy, achieving an 83% occupancy in 1996.
Like the subject property, the Doubletree relies heavily on airline segment of
the market, which explains the relatively low average rate. The Hyatt on Sunset
achieved the second-highest occupancy, at 80%, followed by the Courtyard by
Marriott and the Ramada West Hollywood, with occupancies of 79% each. The
subject property is estimated to achieve an annual occupancy of 77%. The Holiday
Inn Express seems to be the weakest product in the market, with an occupancy of
only 64%. However, this occupancy level is deceptive, as this property is
expected to improve its competitiveness in the following year. The property
operated last year as the Century City Inn, and had achieved only 38% in 1995.
The subject property is the weakest competitor among both its primary and
secondary competitors in terms of average rate and RevPAR. We estimate that it
will finish the year at $64.50. In 1996, it is estimated that the Courtyard by
Marriott will achieve the highest average rate, at $101.00, followed by the
Holiday Inn Express, at $93.00, the Ramada West Hollywood, at $90.00, and the
Hyatt on Sunset, at $85.00. As previously mentioned, the subject property's poor
rate performance is substantially influenced by the large component of airline
contract demand. Additionally, the Holiday Inn is also the weakest competitor in
the commercial segment, which is by far the highest rated segment in the market.
Due to the subject property's poor occupancy and average rate performances, it
registered the lowest RevPAR in the entire competitive set. In 1996, its RevPAR
was $49.67, compared to the primary competitors, which achieved $62.92; these
figures reflect an overall yield penetration of 80.2%.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
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Courtyard by Marriott
The Courtyard by Marriott is located approximately two miles northwest of the
subject property, on Olympic Boulevard. This 134-room property opened in 1988 as
a Days Inn, and converted to the Chesterfield Inn a year later. In 1994, this
property became the Courtyard by Marriott. Management reports that this latter
change resulted in a significant increase in both occupancy and average rate.
Amenities at the property include a small meeting room and a lounge. The hotel
is one of the few hotels which provide free parking in the Beverly Hills lodging
market. In 1995, this property room count had been 135. In 1996, one room was
converted into an office, and the room count was lowered to 134.
The Courtyard by Marriott competes with the subject property due to its
proximate location, primarily in the leisure and commercial segments of the
market. Because of this property's position in the Century City business
district, this property more convenient to many of the corporations in the
surrounding area. It is therefore able to generate significantly higher
commercial business as well as receive higher average rates on corporate
accounts. In 1996, this property achieved an occupancy of 79%, at an average
rate of $101.00.
In 1996, management reported that this property spent approximately $750,000 on
renovations, which included replacement of all guestroom carpeting and soft
goods. Some upgrades were also carried out in terms of hard goods. In terms of
guestroom and public appearance, this property is comparable to the subject
property.
Holiday Inn Express
The Holiday Inn Express is located adjacent to the Courtyard by Marriott. This
47-room property opened in 1987, and until recently, was known as the Century
City Hotel. The property does not offer any meeting facilities, although it does
provide free parking and free continental breakfast in the morning.
Like the Courtyard by Marriott, this property competes with the subject property
due to its location, and in the leisure and commercial segments. The close
proximity to many of the corporations in the surrounding area allows this
property to achieve a fair amount of commercial business as well as to receive
higher average rates. In 1996, the year in which the conversion to a Holiday Inn
affiliation occurred, this property achieved an occupancy of 64% at an average
rate of $93.00. Its occupancy next year is expected to improve, as the hotel
becomes increasingly competitive in the market.
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In 1996, the new ownership reported that this property spent approximately
$400,000 on renovations, which included the renovation of all guestroom hard and
soft goods. In terms of guestroom appearance, this property is comparable to the
subject property.
Doubletree Westwood
The Doubletree Westwood is located approximately three miles northwest of the
subject property on Wiltshire Boulevard. This 295-room property opened in 1963,
and until July of this year, operated as the Holiday Inn Westwood. The
Doubletree is a full-service property with approximately 7,000 square feet of
meeting space, a restaurant, an exercise room, and other amenities typically
found at a full service hotel.
Like the subject property, the Doubletree receives a fair amount of its business
from the airline segment. It competes with the subject property in the other
segments of the market. Because of this property's location in the Westwood
business district, the Doubletree is relatively close to many of the
corporations in the surrounding area, and is therefore able to capture a
significantly higher amount of commercial business, and to receive higher
average rates from that segment. However, its high dependence on airline rooms
brings its overall average rate down. In 1996, this property achieved an
occupancy of 83%, at an average rate of $70.00.
Management at this property was unable to inform us about any recent or planned
renovations for the Doubletree. In terms of guestroom and public appearance this
property is comparable to the subject property.
Ramada West Hollywood
The Ramada West Hollywood is located approximately four miles northeast of the
subject property on Santa Monica Boulevard. This 175-room property opened in
1989. The property has a leased out Pizzeria Uno restaurant, a small meeting
room, and an indoor swimming pool.
The Ramada West Hollywood competes with the subject property primarily for
leisure business. Its close proximity to the various entertainment attractions
in Hollywood, make this property a highly desirable leisure destination hotel.
However, the Ramada also derives a fair amount of commercial business through
the entertainment industry, which help it push its average rates up. In 1996,
this property achieved an occupancy of 79% at an average rate of $90.00.
In 1996, management reported that this property spent approximately $750,000 on
renovations, including replacement of all guestroom carpeting
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and soft goods. Some upgrades were also carried out in terms of hard goods.
Later this year, the property is expected to undergo renovations in its lobby
area, which at present looks outdated. In terms of guestroom appearance, this
property is comparable to the subject property.
Hyatt on Sunset
The Hyatt by Sunset is located approximately four miles northeast of the subject
property, on Olympic Boulevard. This 262-room property opened in 1962. Amenities
at the property include 4,000 square feet of meeting space, a full-service
restaurant, a sports bar, a business center and an indoor swimming pool.
The Hyatt by Sunset has a market orientation very similar to that of the Ramada
West Hollywood, due to its location and proximity to the Hollywood area, which
make this property a highly desirable leisure destination hotel. However, this
property also derives a fair amount of commercial business through the
entertainment industry, which helps it to push its average rates up. In 1996,
this property achieved an occupancy of 80%, at an average rate of $85.00.
Management at this property was unable to provide information concerning any
recent or proposed renovations at the Hyatt. In terms of guestroom and public
appearance this property is comparable to the subject property.
Secondary Competitors
The secondary competitive set is comprised of four lodging properties, which
contain a combined total of 930 rooms. However, we have weighted each property
separately, based on each hotels' degree of competitiveness with the hotels in
the primary set. We estimate that the Holiday Inn Hollywood and the Holiday Inn
Brentwood are most competitive at 40% each. These hotels are located further
away from the subject property's immediate lodging market. However, due to their
similar franchise affiliations, they do tend to compete with the subject
property for some leisure and commercial business. The Hotel Beverly Prescott is
geographically the closest hotel to the subject property. Due to its upscale,
luxury orientation and higher average rates, we consider this property to be
only 20% competitive with the subject property. The Radisson Beverly Pavilion is
the final property included in the secondary set due to its close proximity to
the subject property. Like the Beverly Prescott, the upscale orientation of this
hotel, and the resultant higher average rate, limits the degree to which the
Radisson competes with the subject property. As a result, this property was
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considered to be only 20% competitive. The combined weighted room count of these
properties was 322 guestrooms.
In 1996, the secondary competitors are estimated to achieve a combined occupancy
of 73% at an average rate of $80.40.
The following table summarizes the important operating characteristics of the
subject property's secondary competitors. This information was compiled from
personal interviews, inspections, lodging directories, and our in-house library
of operating data.
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Table 6-5 Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation
---------------------------------------
Number Percentage Competitive Mtg. &
Property of Rooms Competitive Rooms Comm. Group Leisure Airline
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Holiday Inn Hollywood 470 40% 188 10% 20% 50% 20%
Holiday Inn Brentwood 211 40 84 60 20 20 0
Hotel Beverly Prescott 139 20 28 60 30 10 0
Radisson Beverly Pavilion 110 20 22 70 10 20 0
-----------------------------------------------------------------------------
Totals and Averages 930 322 29% 20% 38% 13%
<CAPTION>
Estimated 1995 Estimated 1996
---------------------------------- ----------------------------------
Average Average
Property Occupancy Rate RevPAR Occupancy Rate RevPAR
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Holiday Inn Hollywood 74% $67.00 $49.58 79% $70.00 $55.30
Holiday Inn Brentwood 55 71.00 39.05 50 71.00 35.50
Hotel Beverly Prescott 77 130.00 100.10 87 127.00 110.49
Radisson Beverly Pavilion 78 119.00 92.82 85 124.00 105.40
--------------------------------------------------------------------------
Totals and Averages 70% $77.83 $54.48 73% $80.40 $58.70
</TABLE>
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Proposed Competitors
It is important to consider any new or proposed hotels that might have an impact
on the market area as a whole and the subject property in particular. Based on
our fieldwork and our discussions with local hotel operators, developers, and
government officials, we have concluded that no properties are proposed or under
development in the Beverly Hills area.
Given the strong lodging market in the immediate vicinity of Beverly Hills area,
and the high 77.7% occupancy anticipated for the entire market for year-end
1996, we believe that there is a strong likelihood of another property or
additional rooms entering the Beverly Hills market in the foreseeable future. In
addition, there are appropriately zoned sites where hotel development is
considered possible, in the subject property's market area. Therefore, after
taking all these factors into consideration, we have assumed that an additional
220-room property will open in the market in July of 1998. We expect that this
proposed hotel will be 100% competitive with the subject property.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market has shown signs of recovery from 1994 onwards, corresponding to
the economic recovery in the southern California area, which lagged behind that
of the nation as a whole. According to Smith Travel Research, strong growth has
continued through August of 1996. While supply has remained constant over recent
years, growth in demand has driven occupancy upwards, and hotels in the market
are now pursuing average rate increases.
Based on our review of the local area, three market segments were defined within
the subject property's lodging market. Growth rates for each market segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period. The
exception is the airline segment, which is forecast to decrease in 1997 as the
subject property reduces its dependence on this segment of the market.
We have identified five properties that are considered competitive with the
subject hotel. The subject property is underperforming in the market and is not
attaining its fair share in terms of occupancy, average rate, and RevPAR. Since
1994, the subject property had put in $3.2 million dollars to upgrade its
product and services. These upgrades, along with a stronger market, have been
extremely positive for the subject property. However, its current
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market orientation is focused more towards the lower-rated airline and leisure
segments. Therefore, the subject property has the lowest average rate in its
entire competitive set. Now that its facilities are comparable or superior to
those of its competitors, we expect management to pursue average rates increases
through both increased prices and changes in market segmentation toward greater
emphasis on the higher-rated, more profitable segments of the market.
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7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and rooms revenue per available room (RevPAR). For the purpose of
comparison, we have also presented corresponding data (as provided by Smith
Travel Research) for the competitive hotels described in the previous section.
In addition to the annual percent change calculations, we have determined the
subject property's occupancy, average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
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Year-to-Date Through August
---------------------------
1995 1996 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 68.1% 66.2% 80.4%
Percent Change -- -- 21.5%
Occupancy Penetration 97.6% 94.3% 105.4%
Average Rate $58.54 $59.06 $63.17
Percent Change -- -- 7.0%
Average Rate Penetration 73.5% 73.5% 73.9%
RevPAR $39.88 $39.08 $50.80
Percent Change -- -- 30.0%
RevPAR Penetration 71.7% 69.3% 77.9%
Areawide (STR)
Occupancy 69.8% 70.2% 76.3%
Percent Change 7.7% -- 8.7%
Average Rate $79.68 $80.30 $85.50
Percent Change 0.4% -- 6.5%
RevPAR $55.62 $56.37 $65.24
Percent Change 8.1% -- 15.7%
- --------------------------------------------------------------------------------
Occupancies and average rates for the subject property were not made available
to us before 1995. The previous table indicates, that in 1995, the Holiday Inn
Express underperformed the market as a whole, both in terms of occupancy and
average rates. Year-to-date 1996 reflects a higher occupancy at the subject
property, as compared to the areawide occupancy for the same period. The subject
property's occupancy penetration is at 105.4% in year-to-date 1996, as compared
to 94.3% in the previous year over the same period. In terms of average rates,
the subject property has remained stable between 1995 and 1996.
Our market research and review of the comparable hotels have indicated that from
a physical and locational standpoint, the newly renovated subject property
should be able too achieve its fair share of the market. We believe
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that the prior performance of the hotel resulted primarily from poor management,
deferred maintenance, and a weak marketing effort.
A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy from 1995 through 1996.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1995 1996
---- ----
Occupancy % Change Occupancy % Change
---------------------------------------------
January 67.7% 0.0% 77.7% 14.8%
February 58.4 0.0 69.7 19.4
March 61.5 0.0 79.1 28.6
April 56.9 0.0 82.5 44.9
May 57.4 0.0 81.6 42.2
June 61.6 0.0 81.1 31.7
July 76.2 0.0 83.2 9.2
August 88.5 0.0 87.5 (1.1)
September 78.3 0.0 76.9 (1.7)
October 66.9 0.0 76.1 13.7
November 72.3 0.0 73.7* 2.0
December 70.8 0.0 59.6* (15.9)
------ ----- ------ ------
Full Year 68.1% 0.0% 77.4% 13.7%
* Projected 1996
- --------------------------------------------------------------------------------
As illustrated by the previous table, the subject property exhibits a certain
degree of seasonality. Occupancies have usually peaked around August and the
summer months. According to management, the subject property's occupancy was
significantly higher in 1996, primarily due to the additional airline rooms
which the subject property picked up in year-end 1995 through the middle of
1996. The subject property highest occupancy was in August, with an occupancy of
87.5%. December was the slowest period, with an occupancy of 59.6%.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
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Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
================================================================================
Table 7-3 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
----------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 155,000 37% 9,000 13%
Meeting and Group 46,000 11 5,000 7
Leisure 162,000 38 40,000 55
Airline 60,000 15 18,000 25
------- --- ------ ---
Totals 424,000 100% 72,000 100%
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Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. We
were unable to find any unaccommodated demand. However, we believe that the
subject property's market area should be able to induce some demand into the
area.
Induced Demand
Induced demand represents the additional room nights that are expected to be
attracted to the market following the introduction of a new demand generator.
Situations that can induce demand include the opening of a new manufacturing
plant, the expansion of a convention center, or the addition of a new hotel with
a distinct chain affiliation or unique facilities.
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Induced demand in the subject property's market area is expected to come into
the market, with the opening of the new 220-room proposed property. We have
projected this property will open in July of 1998. Therefore, we have forecasted
induced demand to be phased in at 50% in the first year, and at 100% thereafter.
Most of these additional room nights are projected to come through the
commercial segment. We have projected that approximately 4,250 additional room
nights would be generated in 1998 in the commercial segment. Another 1,500 room
nights are expected to be generated in the leisure segment, and 750 in the
meeting and group segment.
================================================================================
Table 7-4 Induced Demand Calculation
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Phase-in: 0% 50% 100% 100% 100% 100%
Commercial 0 4,250 8,500 8,500 8,500 8,500
Meeting and Group 0 750 1,500 1,500 1,500 1,500
Leisure 0 1,500 3,000 3,000 3,000 3,000
Airline 0 0 0 0 0 0
------ ------ ------ ------ ------ ------
Totals 0 6,500 13,000 13,000 13,000 13,000
- --------------------------------------------------------------------------------
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market. The following table shows the projected annual change in accommodated
and usable room night demand in the subject property's competitive market.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 80
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-5 Total Usable Room Night Demand
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- 3.0% 3.0% 3.0% 3.0% 2.0% 2.0% 2.0%
Accommodated Demand 155,503 160,168 164,973 169,922 175,020 178,520 182,090 185,732
Usable Latent -- 0 4,250 8,500 8,500 8,500 8,500 8,500
Meeting and Group
Growth Rate -- 2.0% 2.0% 2.0% 2.0% 15.% 1.5% 1.5%
Accommodated Demand 46,352 47,279 48,225 49,190 50,174 50,927 51,691 52,466
Usable Latent -- 0 750 1,500 1,500 1,500 1,500 1,500
Leisure
Growth Rate -- 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 162,068 163,689 165,326 166,979 168,649 170,335 172,038 173,758
Usable Latent -- 0 1,500 3,000 3,000 3,000 3,000 3,000
Airline
Growth Rate -- -8.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Accommodated Demand 60,377 55,547 55,547 55,547 55,547 55,547 55,547 55,547
Usable Latent -- 0 0 0 0 0 0 0
Totals
Commercial 155,503 160,168 169,223 178,422 183,520 187,020 190,590 194,232
Meeting and Group 46,352 47,279 48,975 50,690 51,674 52,427 53,191 53,966
Leisure 162,068 163,689 166,826 169,979 171,649 173,335 175,038 176,758
Airline 60,377 55,547 55,547 55,547 55,547 55,547 55,547 55,547
------- ------- ------- ------- ------- ------- ------- -------
TOTAL DEMAND 424,300 426,683 440,571 454,638 462,390 468,329 474,366 480,503
Annual Forecasted Growth -- 0.6% 3.3% 3.2% 1.7% 1.3% 1.3% 1.3%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 1,495
guestrooms. This number is expected to increase by 111 rooms in 1998 to 1,606
guestrooms, to reflect the opening of the 220-room proposed property. In 1999,
the count is expected to rise further, to 1,715 guestrooms, reflecting the first
full-year opening of the proposed property. The following table shows the
projected competitive supply of available rooms and available room nights. To
calculate the annual number of available room nights, the number of available
rooms is multiplied by 365.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 81
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-6 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
----------------------------------------------------------------
Historical 424,300 545,748 78%
1997 426,683 545,748 78
1998 440,571 586,263 75
1999 454,638 626,048 73
2000 462,390 626,048 74
2001 468,329 626,048 75
2002 474,366 626,048 76
2003 480,503 626,048 77
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
As illustrated in the above table, the overall competitive occupancy was roundly
78% in 1996. With new supply coming into the market in 1998, we expect overall
occupancies to decline in 1998 and 1999. After which we expect the marketwide
occupancies to continue to grow over the next several years.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate each property's position in the market based
on its ability to compete with other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market ranged from 37 to 216. The Courtyard by Marriott was the most
competitive property in the commercial market in 1996, with an index of 216. The
Holiday Inn Express, the Ramada West Hollywood, the Hyatt on Sunset, and the
Doubletree Westwood followed with 164, 130, 117, and
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 82
Average Rate
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HVS
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INTERNATIONAL
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106, respectively. The secondary competitors has a competitive index of 77 and
the subject property came in last with 37.
With the renovations completed at the subject property, we expect this property
to dramatically improve its competitiveness in the next few years. We have
projected its competitiveness to increase to 75 and 100 in 1997 and 1998,
respectively. Similarly, the Holiday Inn Express, which recently acquired this
affiliation, is expected to improve its competitive index to 175 and 185 in 1997
and 1998, respectively. The Ramada West is expected to increase from 130 to 132
in 1997. The only other change in the market is the opening of the new property
in 1998. We expect the commercial index of this new property to be 165 in 1998,
which is expected to further increase to 170 and 180 in 1999 and 2000,
respectively. The following table shows the projected commercial segment
competitive indexes of the area's hotels.
================================================================================
Table 7-7 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 37 75 100 100 100 100 100
Marriott Courtyard 216 216 216 216 216 216 216
Holiday Inn Express 164 175 185 185 185 185 185
Doubletree Westwood 106 115 125 125 125 125 125
Ramada West Hollywood 130 132 132 132 132 132 132
Hyatt on Sunset 117 117 117 117 117 117 117
Secondary 77 77 77 77 77 77 77
Proposed New Property 0 0 165 170 180 180 180
- --------------------------------------------------------------------------------
Meeting and Group Segment
The historical meeting and group segment competitive indexes in the subject
property's market ranged from 0 to 54. The secondary competitors were_ the most
competitive property in the meeting and group market in 1996, with an index of
54. The Doubletree Westwood, the Hyatt on Sunset, and the subject property
followed with 45, 23, and 20, respectively. The Courtyard by Marriott and the
Ramada West Hollywood both followed with 14. The Holiday Inn Express has no
meeting space.
The only other change in the market is the opening of the new property in 1998.
We expect the meeting and group index of this new property to be 20 in 1998, and
to further increase to 25 by 1999. The following table shows the projected
commercial segment competitive indexes of the area's hotels.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 83
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-8 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 20 20 20 20 20 20 20
Marriott Courtyard 14 14 14 14 14 14 14
Holiday Inn Express 0 0 0 0 0 0 0
Doubletree Westwood 45 45 45 45 45 45 45
Ramada West Hollywood 14 14 14 14 14 14 14
Hyatt on Sunset 23 23 23 23 23 23 23
Secondary 54 54 54 54 54 54 54
Proposed New Property 0 0 20 25 25 25 25
- --------------------------------------------------------------------------------
Leisure Segment
The historical leisure segment competitive indexes in the subject property's
market ranged from 45 to 155. The subject property was the most competitive
property in the leisure market in 1996, with an index of 155. The Hyatt on
Sunset, the Ramada West Hollywood, the secondary competitors, the Holiday Inn
Express, the Courtyard by Marriott, and the Doubletree Westwood followed, with
152, 144, 101, 70, 58 and 45, respectively.
With the renovations completed at the subject property, we expect this property
to dramatically improve its competitiveness in the other segment, and try and
reduce its dependence on this segment. Therefore, we have projected a decline in
its competitiveness to decrease to 125 and 100 in 1997 and 1998, respectively.
The only other change in the market is the opening of the new property in 1998.
We expect the commercial index of this new property to be 165 in 1998, and to
further increase to 170 and 180 in 1999 and 2000, respectively. The following
table shows the projected commercial segment competitive indexes of the area's
hotels.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 84
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-9 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 155 125 100 100 100 100 100
Marriott Courtyard 58 58 58 58 58 58 58
Holiday Inn Express 70 80 90 90 90 90 90
Doubletree Westwood 45 45 45 45 45 45 45
Ramada West Hollywood 144 144 144 144 144 144 144
Hyatt on Sunset 152 152 152 152 152 152 152
Secondary 101 101 101 101 101 101 101
Proposed New Property 0 0 65 75 80 80 80
- --------------------------------------------------------------------------------
Airline Segment
As a hotel's occupancy improves, its reliance on airline demand generally
diminishes. Because this segment commands deeply discounted rates, operators
prefer to accommodate more lucrative types of demand whenever possible.
Only three hotels have historically had any airline business. The historical
airline segment competitive indexes in the subject property's market ranged from
34 to 106. The Doubletree Westwood was the most competitive property in the
airline market in 1996, with an index of 106. The subject property and the
secondary competitors followed with 70 and 34, respectively. The subject
property and the Doubletree are both expected to reduce their dependence on this
segment for room nights. We have projected that the competitive index for the
subject property would decline to 60 in 1997, and in the case of the Doubletree
Westwood it will decline to 100 in 1997 and to 95 in 1998. The secondary
competitors competitiveness is expected to go up slightly to 40 in 1997 and to
50 in 1998.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 85
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-10 Airline Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 70 60 60 60 60 60 60
Marriott Courtyard 0 0 0 0 0 0 0
Holiday Inn Express 0 0 0 0 0 0 0
Doubletree Westwood 106 100 95 95 95 95 95
Ramada West Hollywood 0 0 0 0 0 0 0
Hyatt on Sunset 0 0 0 0 0 0 0
Secondary 34 40 50 50 50 50 50
Proposed New Property 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 86
Average Rate
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HVS
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INTERNATIONAL
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================================================================================
Table 7-11 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
---------------------------------------------------------
Commercial
Demand 160,168 169,223 178,422 183,520 187,020 190,590
Market Share 0.1153 0.1317 0.1201 0.1189 0.1189 0.1189
Capture 18,464 22,290 21,429 21,820 22,236 22,661
Meeting and Group
Demand 47,279 48,975 50,690 51,674 52,427 53,191
Market Share 0.1125 0.1073 0.1005 0.1005 0.1005 0.1005
Capture 5,318 5,257 5,096 5,195 5,270 5,347
Leisure
Demand 163,689 166,826 169,979 171,649 173,335 175,038
Market Share 0.2098 0.1666 0.1572 0.1562 0.1562 0.1562
Capture 34,350 27,794 26,729 26,813 27,077 27,343
Airline
Demand 55,547 55,547 55,547 55,547 55,547 55,547
Market Share 0.2690 0.2612 0.2612 0.2612 0.2612 0.2612
Capture 14,943 14,506 14,506 14,506 14,506 14,506
------- ------- ------- ------- ------- -------
Total Capture 73,075 69,846 67,760 68,334 69,089 69,856
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 260 x 365) produces the
projected occupancy percentage.
================================================================================
Table 7-12 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
---------------------------------------------------------
Total Room Nights
Captured/Year 73,075 69,847 67,760 68,334 69,089 69,857
Available Room Nights 94,900 94,900 94,900 94,900 94,900 94,900
Occupancy 77.00% 73.60% 71.40% 72.01% 72.80% 73.61%
Rounded 77% 74% 71% 72% 73% 74%
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 87
Average Rate
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HVS
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================================================================================
Table 7-13 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
-------------------------
1997 77%
1998 73
Stabilized 73
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 74% occupancy in 2002, we have chosen to use a stabilized level of 73%. The
occupancy's for the subject property between 1998 and 2002 fluctuate between 71%
and 74%. We have chosen to take the average during this five-year period, and
reflect it as the subject property's stabilized occupancy. The stabilized
occupancy is intended to reflect the anticipated results of the property over
its remaining economic life, given any and all changes in the life cycle of the
hotel. Thus, the stabilized occupancy excludes from consideration any abnormal
relationship between supply and demand, as well as any non-recurring conditions
that may result in unusually high or low occupancies. Although the subject
property may operate at occupancies above this stabilized level, we believe that
it is equally possible for new competition and temporary economic downturns to
force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which, in turn, provides the basis for estimating most other income and
expense categories.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 88
Average Rate
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HVS
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Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate from 1995 through 1996.
================================================================================
Table 7-14 Subject Property's Occupancy and Average Rate by Month
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1996
-----------------------------------------------------------------------------------
Average Average
Occupancy % Chg Rate % Chg Occupancy % Chg Rate % Chg
--------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 67.7% -- $58.96 -- 77.7% 14.8% $58.60 (0.6%)
February 58.4 -- 59.43 -- 69.7 19.4 64.92 9.2
March 61.5 -- 61.34 -- 79.1 28.6 61.43 0.1
April 56.9 -- 57.08 -- 82.5 44.9 60.88 6.7
May 57.4 -- 61.18 -- 81.6 42.2 59.66 (2.5)
June 61.6 -- 56.32 -- 81.1 31.7 64.80 15.1
July 76.2 -- 56.99 -- 83.2 9.2 65.74 15.4
August 88.5 -- 60.82 -- 87.5 (1.1) 69.01 13.5
September 78.3 -- 59.89 -- 76.9 (1.7) 65.34 9.1
October 66.9 -- 61.28 -- 76.1 13.7 68.00 11.0
November 72.3 -- 54.51 -- 73.7 2.0 69.13 26.8
December 70.8 -- 54.68 -- 59.6 (15.9) 67.06 22.6
---- ----- ---- ----- ----- ----
Weighted Average 68.1% $58.54 77.4% 13.7% 64.47 10.1%
</TABLE>
* Projected
- --------------------------------------------------------------------------------
The previous table underscores the correlation between a hotel's occupancy and
its average rate: as occupancy increases, rates tend to follow. On a monthly
basis, the Holiday Inn Select achieves its highest average rate during August.
Market Segmentation Method
The subject property's average rate will be projected using the market
segmentation method. The advantage of this method is its ability to reflect
anticipated changes in the subject property's market mix and their impact on
average rate. This technique begins with an analysis of the room rates commanded
by local hotels in each market segment. Using this information, we can forecast
the subject property's rate on a segment-by-segment basis. The projected rate in
each segment is then multiplied by the number of room nights the hotel is
expected to capture in that segment (as determined earlier in this analysis).
These amounts are totaled, yielding the
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 89
Average Rate
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HVS
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overall rooms revenue. Average rate is then calculated by dividing the
property's total rooms revenue by the estimated number of occupied rooms.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by RevPAR, which reflects a property's
ability to maximize rooms revenue. The following table summarizes the 1996
average rate and RevPAR of the subject property and its competitors.
================================================================================
Table 7-15 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
- --------------------------------------------------------------------------------
Subject Property $ 64.50 $49.67
Marriott Courtyard 101.00 79.79
Holiday Inn Express 93.00 59.52
Doubletree Westwood 70.00 58.10
Ramada West Hollywood 90.00 71.10
Hyatt on Sunset 85.00 68.00
------- -------
Averages $ 79.45 $62.92
- --------------------------------------------------------------------------------
The above table demonstrates that the subject property is the weakest property
in terms of RevPAR among its competitive set, realizing $49.67 in 1996. The
Courtyard by Marriott was the market leader at $79.79, a result of its leading
position in the market in terms of average rates. The Ramada West Hollywood,
Hyatt on Sunset, Holiday Inn Express and the Doubletree Westwood trailed, with
RevPAR levels of $71.10, $68.00, $59.52 and $58.10, respectively.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 90
Average Rate
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Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This temporary condition may
allow other competitors to achieve corresponding gains by effectively
raising the amount the market will bear. However, if the addition to
supply has a severe impact on the occupancy levels of other hotels, price
competition may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 91
Average Rate
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Average Rates by Market Segment
Average rate can be projected by considering anticipated changes in the subject
property's demand mix and the rates that can be commanded in each market
segment. The Holiday Inn Select's historical average rates are set forth in the
following table. To project average rate, we have applied growth factors to the
hotel's 1996 rates in each market segment. The following table outlines these
growth factors.
================================================================================
Table 7-16 1996 Average Rate by Market Segment and Assumed Growth Factors
- --------------------------------------------------------------------------------
Projected Growth Rates
--------------------------------------
1996
Market Segment Average Rate 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Commercial $90.00 4.0% 3.5% 3.5% 3.5% 3.5%
Meeting and Group 70.00 3.5% 3.5% 3.5% 3.5% 3.5%
Leisure 70.00 4.0% 3.5% 3.5% 3.5% 3.5%
Airline 39.00 0.0% 2.0% 3.0% 3.5% 3.5%
- --------------------------------------------------------------------------------
As stated previously, the subject property's historical average rate has been
much lower than that achieved by its primary competitors. Calendar year 1996
witnessed the highest occupancy level for the area in recent years, and the
subject property is making strong gains in 1996 according to year-to-date
statistics. It is our opinion that Holiday Inn -Select will soon reach a
saturation point in terms of occupancy. However, given its low average rate as
compared to most of the competitors, the subject property is in a position to
aggressively push room rates. The Holiday Inn affiliation, along with the
recently completed rooms renovation, should go a long way towards achieving
average rate growth. We expect strong gains to be made in 1997 and into the
next, after which we project a slowing of average rate growth as the hotel
narrows the gap between it and its primary competitors. Following 2000, the
stabilized year, we expect average rate to increase at inflationary levels.
We project average rate in the commercial segment to increase by 4.0% in 1997 to
reflect strong increases in corporate and rack room rates; this growth is
forecast to slow to 3.5% in 1998, stabilizing to the underlying monetary
inflation rate of 3.5% each year thereafter. Average rate in the meeting and
group segment is projected to increase by 3.5% in 1997, and to remain at the
same throughout the projection period. Average rate in the leisure sector is
projected to increase by 4% in 1997. This growth is the
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 92
Average Rate
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HVS
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INTERNATIONAL
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anticipated result of substantial rate increases in the regular pleasure and
package rooms segments within the leisure segment. Rate projections for 1998 and
thereafter are expected to increase at the annual inflation rate of 3.5%. The
airline segment is not expected to see any growth in average rates, as contracts
have already been signed into the next year. However, we have projected 2.0%
growth rate in 1998 and 3.0% in 1999, before stabilizing at 3.5% in the Year
2000.
To project average rate, the growth factors are applied to the 1996 average
rates estimated for Holiday Inn - Select in each market segment. The resulting
amounts are multiplied by the projected room night demand in each segment, as
illustrated by the following table.
================================================================================
Table 7-17 Forecast of Average Rate by Market Segment
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Group/ Weighted Percent
Commercial Meeting Leisure Airline Total Average Rate Change
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical
Demand 9,499 5,115 40,190 18,268 73,073
Segment Rate $90.00 $70.00 $70.00 $39.00
Revenue $854,954 $358,058 $2,813,311 $712,462 $4,738,784 $64.85 --
1997
Demand 18,464 5,318 34,350 14,943 73,075
Segment Rate $93.61 $72.46 $72.81 $39.00
Revenue $1,728,413 $385,325 $2,500,944 $582,777 $5,197,458 $71.12 9.7%
1998
Demand 22,290 5,257 27,794 14,506 69,847
Segment Rate $96.89 $74.99 $75.36 $39.78
Revenue $2,159,594 $394,237 $2,094,443 $577,049 $5,225,322 $74.81 5.2%
1999
Demand 21,429 5,096 26,729 14,506 67,760
Segment Rate $100.28 $77.62 $77.99 $40.97
Revenue $2,148,841 $395,538 $2,084,686 $594,360 $5,223,425 $77.09 3.0%
2000
Demand 21,820 5,195 26,813 14,506 68,334
Segment Rate $103.79 $80.33 $80.72 $42.41
Revenue $2,264,631 $417,335 $2,164,430 $615,163 $5,461,559 $79.92 3.7%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 93
Average Rate
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HVS
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INTERNATIONAL
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Based on the preceding analysis, the following table summarizes the occupancy
and average rates that will be used to project the subject property's rooms
revenue.
================================================================================
Table 7-18 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
---------------------------------------
1997 77% $71.12
1998 73 74.81
Stabilized 73 77.09
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Highest and Best Use 94
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved
property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This differential may occur when a site has existing improvements and
the highest and best use of the land differs from the current use. Nonetheless,
the current property use will continue until the value of the land under its
highest and best use exceeds the value of the property in its current use, plus
the cost to remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be as a transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a transient lodging
facility.
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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hotel valuation process. As noted in Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any non-recurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled, Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Holiday Inn Select is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1973, and achieved
occupancy levels of 58.9% in 1994 and 68.1% in 1995. The statement for 1994
reflects only a partial year; complete 1994 statements were not provided to us,
as the subject property had different owners at that time. The following income
and expense statements were provided by the Ashford Financial Corporation, and
are unaudited. Where applicable, we have reorganized the statements in
accordance with the Uniform System of Accounts for Hotels.
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Table 10-1 Historical Operating Performance ($+,000)
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<TABLE>
<CAPTION>
Calendar Year: 1995 1994*
--------------------------------------------------------------------------------------------
Total Rooms: 260 64
Occupied Rooms: 64,663 13,453
Complimentary Rooms: 3,853 316
Days Open: 365 Amount per Amount per 365 Amount per Amount pe
Occupancy: 68.1% Percentage Avilable Occupied 58.9% Percentage Available Occupied
Average Rate: $58.54 of Revenue Room Room $60.00 of Revenue Room Room
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,785 76.7% $14,559 $58.54 $807 74.8% $12,592 $60.00
Food 742 15.0 2,854 11.48 161 14.9 2,516 11.99
Beverage 146 3.0 560 2.25 44 4.1 683 3.25
Telephone 190 3.9 731 2.94 50 4.6 773 3.68
Other Income 74 1.5 286 1.15 18 1.6 276 1.32
Total 4,938 100.1 18,991 76.36 1,079 100.0 16,840 80.24
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DEPARTMENTAL EXPENSES **
Rooms 1,026 27.1 3,945 15.86 222 27.5 3,461 16.49
Food & Beverage 758 85.3 2,914 11.71 99 48.4 1,547 7.37
Telephone 98 51.7 378 1.52 21 43.0 333 1.59
Other Income 51 68.9 197 0.79 2 12.3 34 0.16
Total 1,933 39.1 7,434 29.89 345 31.9 5,375 25.61
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DEPARTMENTAL INCOME 3,005 61.0 11,557 46.47 735 68.1 11,465 54.63
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OPERATING EXPENSES
Administrative & General 604 12.2 2,321 9.33 110 10.2 1,709 8.15
Management Fee 148 3.0 571 2.30 32 3.0 507 2.41
Marketing 249 5.1 959 3.86 48 4.4 744 3.55
Franchise Fees 195 4.0 750 3.02 39 3.6 609 2.90
Property Oper. & Maint. 251 5.1 967 3.89 52 4.8 814 3.88
Energy 270 5.5 1,038 4.17 86 8.0 1,340 6.38
Total 1,718 34.9 6,607 26.56 367 34.0 5,723 27.27
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HOUSE PROFIT 1,287 26.1 4,950 19.91 368 34.1 5,742 27.36
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FIXED EXPENSES
Property Taxes 212 4.3 816 3.28 56 5.2 870 4.14
Insurance 304 6.1 1,168 4.70 42 3.9 661 3.15
Total 516 10.4 1,984 7.98 98 9.1 1,530 7.29
=============================================================================================================================
NET INCOME $771 15.7% $2,966 $11.93 $270 25.0% $4,212 $20.07
=============================================================================================================================
</TABLE>
* Complete Operating Statements are not available for 1994 or previous
years, due to change in Ownership.
** Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Table 10-2 Historical Operating Performance ($+,000)
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<TABLE>
<CAPTION>
Calendar Year: 1996 1995
---------------------------------------------------------------------------------------------
Total Rooms: 260 260
Occupied Rooms: 50,992 41,813
Complimentary Rooms: 527 3,347
Days Open: 244 Amount per Amount per 243 Amount per Amount per
Occupancy: 81.2% Percentage Avilable Occupied 71.5% Percentage Available Occupied
Average Rate: $63.18 of Revenue Room Room $59.06 of Revenue Room Room
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,222 78.3% $12,391 $63.18 $2,470 78.2% $9,498 $59.06
Food 568 13.8 2,185 11.14 452 14.3 1,740 10.82
Beverage 134 3.2 514 2.62 76 2.4 294 1.83
Telephone 162 3.9 622 3.17 120 3.8 463 2.88
Other Income 28 0.7 106 0.54 37 1.2 144 0.89
Total 4,112 99.9 15,817 80.65 3,156 99.9 12,139 75.48
- ----------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 722 22.4 2,777 14.16 639 25.9 2,456 15.27
Food & Beverage 580 82.6 2,229 11.36 471 89.0 1,811 11.26
Telephone 85 52.5 327 1.67 60 49.8 230 1.43
Other Income 9 32.9 35 0.18 24 64.0 92 0.57
Total 1,396 33.9 5,367 27.37 1,193 37.8 4,590 28.54
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DEPARTMENTAL INCOME 2,717 66.0 10,449 53.28 1,963 62.1 7,549 46.94
- ----------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 442 10.7 1,699 8.66 357 11.3 1,372 8.53
Management Fee 123 3.0 475 2.42 95 3.0 365 2.27
Marketing 182 4.4 702 3.58 149 4.7 572 3.55
Franchise Fees 177 4.3 681 3.47 123 3.9 473 2.94
Property Oper. & Maint. 187 4.5 718 3.66 161 5.1 620 3.85
Energy 191 4.7 736 3.75 178 5.7 686 4.27
Total 1,302 31.6 5,009 25.54 1,063 33.7 4,088 25.42
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HOUSE PROFIT 1,414 34.4 5,440 27.74 900 28.4 3,461 21.52
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FIXED EXPENSES
Property Taxes 135 3.3 518 2.64 145 4.6 556 3.46
Insurance 107 2.6 410 2.09 206 6.5 791 4.92
Total 241 5.9 927 4.73 350 11.1 1,347 8.38
============================================================================================================================
NET INCOME $1,173 28.5% $4,513 $23.01 $550 17.3% $2,114 $13.14
============================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Comparable Operating Statements
These historical income and expense statements show that the subject property's
operating performance has been improving over the last two year period. As
previously mentioned, management was unable to provide us with operating
statements for 1994. However, we have been able to see significant differences
in the statistics between year-to-date through August, 1995 and the
corresponding 1996 period. The subject property's room revenue increased
substantially in 1996 over the same period from last year, which was primarily
due to the increase in occupancy and average rates.
During the same period, the subject property's management was able to reduce
departmental expenses as well. The subject property's 1996 year-to-date rooms
expense went down from 25.9% of rooms revenue in year-to-date, 1995 to 22.4% of
rooms revenue in year-to-date 1996. Food and beverage revenue also declined -
from 89.0% to 82.6% during the same period. While departmental expenses have
fallen at the subject property, the hotel's operating expenses have fluctuated
somewhat; these expenses accounted for 34.1% of total revenue in year-to-date
1995, and 31.6% in year-to-date 1996.
As a result of a decline in overall expenses and an increase in revenue over the
past two years, the subject property's net income has soared. In terms of net
revenue, the subject property's net revenue went up from $550,000 in
year-to-date 1995 to $1,173,000 in year-to-date 1996, or, in terms of percentage
of revenue, from 17.3% in year-to-date 1995 to 28.5% in year-to-date 1996.
We have evaluated each revenue and expense category and have compared the
subject property's historical operating results with those of similar lodging
facilities. We note that the property's fixed expenses are low when compared to
such costs at comparable hotels. Also, in 1996, the expenses for most categories
were lower, due to the high occupancy level, which resulted in the variable cost
being lower for many of the expenses. Overall, we believe that the subject
property's management has exercised good control over the hotel's operating
performance.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
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HVS International uses a fixed-and-variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed, and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
68.1%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-3 Base-Year Statement of Income and Expense ($+,000)
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Calendar Year: 1995
-------------------------------------------------------
Number of Rooms: 260
Occupancy: 68.1% Percent of Amount per Amount per
Average Rate: $58.54 Total Available Occupied
Occupied Rooms: 64,663 Revenue Room Room
- --------------------------------------------------------------------------------
Revenue:
Rooms $3,785 76.2% $14,559 $58.54
Food 776 15.6 2,984 12.00
Beverage 178 3.6 684 2.75
Telephone 189 3.8 728 2.93
Other Income 38 0.8 146 0.59
Total Revenue 4,966 100.0 19,101 76.80
- --------------------------------------------------------------------------------
Expenses:
Rooms* 1,026 27.1 3,945 15.86
Food & Beverage* 758 79.4 2,914 11.71
Telephone* 98 52.0 378 1.52
Other Income* 15 40.1 58 0.23
Administrative & General 584 11.8 2,245 9.02
Management Fee 149 3.0 573 2.30
Marketing 239 4.8 921 3.70
Franchise Fees 189 3.8 728 2.93
Property Oper. & Maint. 251 5.1 967 3.89
Energy 270 5.4 1,038 4.17
Property Taxes 212 4.3 815 3.28
Insurance 160 3.2 615 2.47
Reserve for Replacement 199 4.0 764 3.07
Total Expenses 4,150 83.6 15,961 64.18
- --------------------------------------------------------------------------------
Net Income $817 16.4% $3,141 $12.63
================================================================================
* Departmental expense ratios are expressed as a percentage of
departmental revenues.
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-4 Inflation Estimates
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<TABLE>
<CAPTION>
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Webber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
----- -----
Averages 3.0% 2.9%
</TABLE>
Source: Wall Street Journal, July 1, 1996
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
------------------------------------------
1997 6.5%
1998 5.5
1999 3.5
2000 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement,
which is expressed in 1996 dollars, is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed-and-variable component relationships.
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 Stabilized
----------------------------------------------------------------------
Forecast Occupancy Percentage 77.0% 73.0% 73.0%
Forecast Average Rate $71.12 $74.81 $77.09
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Forecast
Calendar Years Projected Average Number Days in Rooms
Ending: Occupancy Room Rate of Units in Year Revenue
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 77% X $71.12 X 260 X 365 = $5,197
1998 73 X 74.81 X 260 X 365 = 5,183
Stabilized 73 X 77.09 X 260 X 365 = 5,341
</TABLE>
- --------------------------------------------------------------------------------
Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as, "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue.
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Although food revenue varies directly with changes in occupancy, the small
portion generated by banquet sales and outside capture is relatively fixed.
Food revenue was projected based on this relationship between the fixed and
variable components. The following table shows the projected food revenue and
several units of comparison that can be used to check the reasonableness of the
forecast.
================================================================================
Table 10-8 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Food Revenue (+,000) $ 912 $ 906 $ 938
Percent of Total Revenue 13.9% 13.8% 13.9%
Per Available Room $3,509 $3,486 $3,608
Per Occupied Room $12.48 $13.08 $13.54
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage Revenue
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges.
Based on an analysis of comparable lodging facilities, beverage revenue is
estimated to average approximately 23% of food revenue. Thus, beverage revenue
is projected by multiplying the projected food revenue by 23%. The following
table illustrates the forecast of beverage revenue.
================================================================================
Table 10-9 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
-------------------------------------------------------------------------
Total Beverage Revenue (+,000) $209 $208 $215
- --------------------------------------------------------------------------------
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Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the de-regulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. De-regulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed-and-variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-10 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
----------------------------------------------------------------------- --
Total Telephone Revenue (+,000) $ 227 $ 223 $ 231
Percent of Total Revenue 3.4% 3.4% 3.4%
Amount Per Available Room $ 871 $ 859 $ 889
Amount Per Occupied Room $3.11 $3.22 $3.33
- --------------------------------------------------------------------------------
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Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed-and-variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-11 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Other Income (+,000) $ 41 $ 42 $ 43
Percent of Total Revenue 0.6% 0.7% 0.7%
Amount Per Available Room $ 162 $ 165 $ 171
Amount Per Occupied Room $0.57 $0.62 $0.64
- --------------------------------------------------------------------------------
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Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-12 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
---------------------------------------------------------------------------
Total Rooms Expense (+,000) $1,156 $1,170 $1,211
Percent of Rooms Revenue 22.2% 22.6% 22.7%
Amount per Available Room $4,446 $4,499 $4,657
Amount per Occupied Room $15.82 $16.89 $17.48
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they
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represent a relatively insignificant factor. After considering the fixed and
variable components, we forecast the subject property's food and beverage
expense as follows.
================================================================================
Table 10-13 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total F&B Expense (+,000) $ 847 $ 860 $ 890
Percent of Food and Beverage Revenue 75.6% 77.2% 77.2%
Amount per Available Room $3,258 $3,308 $3,424
Amount per Occupied Room $11.59 $12.41 $12.85
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-14 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Telephone Expense (+,000) $ 110 $ 112 $ 116
Percent of Telephone Revenue 48.6% 50.1% 50.1%
Amount per Available Room $ 425 $ 430 $ 445
Amount per Occupied Room $1.51 $1.62 $1.67
- --------------------------------------------------------------------------------
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Other Income Expense
Other income expense consists of costs associated with other income, and is
dependent on the nature of the revenue. For example, if a hotel leases its gift
shop to an outside operator, the expenses are limited to items such as rental
fees and commissions. If the property operates its own gift shop, both revenues
and expenses will be higher, and the hotel is responsible for the cost of goods
sold, payroll, and so forth. Using a fixed-and-variable forecasting model, we
project the subject property's other income expense as follows.
================================================================================
Table 10-15 Forecast of Other Income Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Other Income Expense (+,000) $ 17 $ 17 $ 18
Percent of Other Income Revenue 39.4% 39.7% 39.9%
Amount per Available Room $ 64 $ 66 $ 67
Amount per Occupied Room $0.23 $0.25 $0.26
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that
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may have an impact on a hotel's liability expense include the size of the
meeting, banquet, and restaurant facilities; the ratio between the amount of
alcohol served and total food and beverage sales; the presence of a dance floor;
a high-rise structure; a swimming pool; life safety support systems; and the
guest transportation services provided by the hotel. The following table
illustrates our forecast of administrative and general expense.
================================================================================
Table 10-16 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- -------------------------------------------------------------------------------
Total Administrative & General Expense (+,000) $ 670 $ 684 $ 707
Percentage of Total Revenue 10.2% 10.4% 10.5%
Amount per Available Room $2,577 $2,631 $2,719
Amount per Occupied Room $ 9.17 $ 9.88 $10.21
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
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The subject property is operated by Remington Hotel Company. A management
contract, which was signed in October, 1994, stipulates a 15-year term, with an
extension clause allowing two successive five-year periods. Based on historical
levels, we have projected a management fee of 3.0% of total revenue for the
subject property. Based on our review of the current market for management
contracts, we are of the opinion that this fee is consistent with prevailing
market terms. Applying this management fee structure to the projection of total
revenue yields the following forecast of the subject property's management fee.
================================================================================
Table 10-17 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Management Fee Expense (+,000) $198 $197 $203
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed, with
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the exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a
fixed-and-variable component model.
================================================================================
Table 10-18 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Marketing Expense (+,000) $ 275 $ 281 $ 290
Percentage of Total Revenue 4.2% 4.3% 4.3%
Amount per Available Room $1,057 $1,080 $1,116
Amount per Occupied Room $ 3.76 $ 4.05 $ 4.19
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Holiday Inn Franchising Inc. for
the use of the company's name, trade marks, and service marks. The current
franchise agreement, which expires in January of 2005, stipulates a franchise
(royalty) fee of 5.0% of gross rooms revenue. The following table illustrates
the projection of the subject property's franchise fee.
================================================================================
Table 10-19 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Franchise Fee Expense (+,000) $260 $259 $267
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility
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that operates with a lower-than-normal maintenance budget is likely to
accumulate a considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-20 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Property Oper. & Maint. Expense (+,000) $ 289 $ 295 $ 305
Percentage of Total Revenue 4.4% 4.5% 4.5%
Amount per Available Room $1,110 $1,134 $1,172
Amount per Occupied Room $ 3.95 $ 4.26 $ 4.40
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
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Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-21 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Total Energy Expense (+,000) $ 296 $ 305 $ 315
Percentage of Total Revenue 4.5% 4.6% 4.7%
Amount per Available Room $1,138 $1,173 $1,213
Amount per Occupied Room $ 4.05 $ 4.40 $ 4.55
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-22 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Forecast of Property Taxes (+,000) $221 $225 $230
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
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Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $615 per available room in 1997 - the first projection period.
In subsequent years, this amount is assumed to increase in tandem with
inflation. The following table outlines our projection of insurance expense.
================================================================================
Table 10-23 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Forecast of Insurance Expense (+,000) $171 $177 $184
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions
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currently made by the hotel. The following table summarizes the projected
reserve for replacement.
================================================================================
Table 10-24 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 Stabilized
--------------------------------------------------------------------------
Reserve for Replacement Expense (+,000) $263 $263 $271
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning 1997, and are expressed
in inflated dollars for each year.
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================================================================================
Table 10-25 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History: Holiday Inn Select, Los Angeles,
California
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
------------------------------------
Calendar Years: 1995 1997
Number of Rooms: 260 260
Occupancy: 68.1% 77.0%
Average Rate: $58.54 $71.12
Days Open: 365 365
Occupied Rooms: 64,663 % Gross PAR POR 73,073 % Gross PAR POR
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,785 76.7% $14,559 $58.54 $5,197 79.0% $19,988 $71.12
Food 742 15.0 2,854 11.48 912 13.8 3,508 12.48
Beverage 146 3.0 560 2.25 209 3.2 804 2.86
Telephone 190 3.9 731 2.94 227 3.4 873 3.11
Other Income 74 1.5 286 1.15 42 0.6 162 0.57
Total Revenues 4,938 100.1 18,991 76.36 6,587 100.0 25,335 90.14
- --------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,026 27.1 3,945 15.86 1,156 22.2 4,446 15.82
Food & Beverage 758 85.3 2,914 11.71 847 75.6 3,258 11.59
Telephone 98 51.7 378 1.52 110 48.5 423 1.51
Other Income 51 68.9 197 0.79 17 40.5 65 0.23
Total Dept. Expenses 1,933 39.1 7,434 29.89 2,130 32.3 8,192 29.15
- --------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 3,005 61.0 11,557 46.47 4,457 67.7 17,142 60.99
- --------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 604 12.2 2,321 9.33 670 10.2 2,577 9.17
Management Fee 148 3.0 571 2.30 198 3.0 762 2.71
Marketing 249 5.1 959 3.86 275 4.2 1,058 3.76
Franchise Fees 195 4.0 750 3.02 260 3.9 1,000 3.56
Property Oper. & Maint. 251 5.1 967 3.89 289 4.4 1,112 3.95
Energy 270 5.5 1,038 4.17 296 4.5 1,138 4.05
Total Operating Expenses 1,718 34.9 6,607 26.56 1,988 30.2 7,646 27.21
- --------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,287 26.1 4,951 19.91 2,469 37.5 9,496 33.79
- --------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 212 4.3 816 3.28 221 3.4 850 3.02
Insurance 304 6.1 1,168 4.70 171 2.6 658 2.34
Reserve for Replacement 0.0 0.00 263 4.0 1,012 3.60
Total 516 10.4 1,984 7.98 655 10.0 2,519 8.96
- --------------------------------------------------------------------------------------------------------
NET INCOME $771 15.7% $2,967 $11.93 $1,814 27.5% $6,977 $24.82
========================================================================================================
Food/Rooms 19.6% 17.5%
Beverage/Food 19.6% 22.9%
Telephone/Rooms 5.0% 4.4%
Other Income/Rooms 2.0% 0.8%
<CAPTION>
Calendar Years: 1998 Stabilized
Number of Rooms: 260 260
Occupancy: 73.0% 73.0%
Average Rate: $74.81 $77.09
Days Open: 365 365
Occupied Rooms: 69,277 % Gross PAR POR 69,277 % Gross
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,183 78.9% $19,935 $74.82 $5,341 78.8%
Food 906 13.8 3,485 13.08 938 13.9
Beverage 208 3.2 800 3.00 215 3.2
Telephone 223 3.4 858 3.22 231 3.4
Other Income 43 0.7 165 0.62 44 0.7
Total Revenues 6,563 100.0 25,242 94.74 6,769 100.0
- -------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,170 22.6 4,500 16.89 1,211 22.7
Food & Beverage 860 77.2 3,308 12.41 890 77.2
Telephone 112 50.2 431 1.62 116 50.2
Other Income 17 39.5 65 0.25 18 40.9
Total Dept. Expenses 2,159 32.9 8,304 31.16 2,235 33.0
- -------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 4,404 67.1 16,938 63.57 4,534 67.0
- -------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 684 10.4 2,631 9.87 707 10.4
Management Fee 197 3.0 758 2.84 203 3.0
Marketing 281 4.3 1,081 4.06 290 4.3
Franchise Fees 259 3.9 996 3.74 267 3.9
Property Oper. & Maint. 295 4.5 1,135 4.26 305 4.5
Energy 305 4.6 1,173 4.40 315 4.7
Total Operating Expenses 2,021 30.7 7,773 29.17 2,087 30.8
- -------------------------------------------------------------------------------------
HOUSE PROFIT 2,383 36.4 9,165 34.40 2,447 36.2
- -------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 225 3.4 867 3.25 230 3.4
Insurance 177 2.7 681 2.55 184 2.7
Reserve for Replacement 263 4.0 1,012 3.80 271 4.0
Total 665 10.1 2,559 9.61 685 10.1
- -------------------------------------------------------------------------------------
NET INCOME $1,718 26.3% $6,606 $24.79 $1,762 26.1
=====================================================================================
Food/Rooms 17.5% 17.6%
Beverage/Food 23.0% 22.9%
Telephone/Rooms 4.3% 4.3%
Other Income/Rooms 0.8% 0.8%
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Table 10-26 Ten-Year Forecast of Income and Expense: Holiday Inn Select, Los
Angeles, California
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years Ending: 1997 1998 1999 2000 2001
--------------- --------------- --------------- --------------- -------- ------
Number of Rooms: 260 260 260 260 260
Occupied Rooms: 73,073 69,277 69,277 69,277 69,277
Occupancy: 77.0% % of 73.0% % of 73.0% % of 73.0% % of 73.0% % of
Average Rate: $71.12 Gross $74.81 Gross $77.09 Gross $79.79 Gross $82.58 Gross
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,197 79.0% $5,183 78.9% $5,341 78.8% $5,527 78.8% $5,721 78.8%
Food 912 13.8 906 13.8 938 13.9 971 13.9 1,005 13.9
Beverage 209 3.2 208 3.2 215 3.2 223 3.2 230 3.2
Telephone 227 3.4 223 3.4 231 3.4 239 3.4 248 3.4
Other Income 42 0.6 43 0.7 44 0.7 46 0.7 48 0.7
Total 6,587 100.0 6,563 100.0 6,769 100.0 7,006 100.0 7,252 100.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
DEPARTMENTAL EXPENSES *
Rooms 1,156 22.2 1,170 22.6 1,211 22.7 1,253 22.7 1,297 22.7
Food & Beverage 847 75.6 860 77.2 890 77.2 922 77.2 954 77.2
Telephone 110 48.5 112 50.2 116 50.2 120 50.2 124 50.0
Other Income 17 40.5 17 39.5 18 40.9 18 39.1 19 39.6
Total 2,130 32.3 2,159 32.9 2,235 33.0 2,313 33.0 2,394 33.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
DEPARTMENTAL INCOME 4,457 67.7 4,404 67.1 4,534 67.0 4,693 67.0 4,858 67.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
OPERATING EXPENSES
Administrative & General 670 10.2 684 10.4 707 10.4 732 10.4 758 10.5
Management Fee 198 3.0 197 3.0 203 3.0 210 3.0 218 3.0
Marketing 275 4.2 281 4.3 290 4.3 300 4.3 311 4.3
Franchise Fees 260 3.9 259 3.9 267 3.9 276 3.9 286 3.9
Property Oper. & Maint. 289 4.4 295 4.5 305 4.5 315 4.5 326 4.5
Energy 296 4.5 305 4.6 315 4.7 327 4.7 338 4.7
Total 1,988 30.2 2,021 30.7 2,087 30.8 2,160 30.8 2,237 30.9
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
HOUSE PROFIT 2,469 37.5 2,383 36.4 2,447 36.2 2,533 36.2 2,621 36.1
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
FIXED EXPENSES
Property Taxes 221 3.4 225 3.4 230 3.4 235 3.3 239 3.3
Insurance 171 2.6 177 2.7 184 2.7 190 2.7 197 2.7
Reserve for Replacement 263 4.0 263 4.0 271 4.0 280 4.0 290 4.0
Total 655 10.0 665 10.1 685 10.1 705 10.0 726 10.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
NET INCOME $1,814 27.5% $1,718 26.3% $1,762 26.1% $1,828 26.2% $1,895 26.1%
=========================== =============== =============== =============== =============== ======== ======
<CAPTION>
Calendar Years Ending: 2002 2003 2004 2005 2006
--------------- --------------- --------------- --------------- -------- ------
Number of Rooms: 260 260 260 260 260
Occupied Rooms: 69,277 69,277 69,277 69,277 69,277
Occupancy: 73.0% % of 73.0% % of 73.0% % of 73.0% % of 73.0% % of
Average Rate: $85.47 Gross $88.46 Gross $91.56 Gross $94.76 Gross $98.08 Gross
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $5,921 78.8% $6,128 78.8% $6,343 78.8% $6,565 78.8% $6,795 78.8%
Food 1,040 13.9 1,077 13.9 1,114 13.9 1,153 13.9 1,194 13.9
Beverage 238 3.2 247 3.2 255 3.2 264 3.2 274 3.2
Telephone 256 3.4 265 3.4 275 3.4 284 3.4 294 3.4
Other Income 49 0.7 51 0.7 53 0.7 55 0.7 56 0.7
Total 7,504 100.0 7,768 100.0 8,040 100.0 8,321 100.0 8,613 100.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
DEPARTMENTAL EXPENSES *
Rooms 1,342 22.7 1,389 22.7 1,438 22.7 1,488 22.7 1,540 22.7
Food & Beverage 987 77.2 1,022 77.2 1,057 77.2 1,094 77.2 1,133 77.2
Telephone 128 50.0 133 50.2 138 50.2 142 50.0 147 50.0
Other Income 20 40.8 20 39.2 21 39.6 22 40.0 22 39.3
Total 2,477 33.0 2,564 33.0 2,654 33.0 2,746 33.0 2,842 33.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
DEPARTMENTAL INCOME 5,027 67.0 5,204 67.0 5,386 67.0 5,575 67.0 5,771 67.0
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
OPERATING EXPENSES
Administrative & General 784 10.4 812 10.5 840 10.4 870 10.5 900 10.4
Management Fee 225 3.0 233 3.0 241 3.0 250 3.0 258 3.0
Marketing 322 4.3 333 4.3 345 4.3 357 4.3 369 4.3
Franchise Fees 296 3.9 306 3.9 317 3.9 328 3.9 340 3.9
Property Oper. & Maint> 338 4.5 350 4.5 362 4.5 375 4.5 388 4.5
Energy 350 4.7 362 4.7 375 4.7 388 4.7 401 4.7
Total 2,315 30.8 2,396 30.9 2,480 30.8 2,568 30.9 2,656 30.8
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
HOUSE PROFIT 2,712 36.2 2,808 36.1 2,906 36.2 3,007 36.1 3,115 36.2
- --------------------------- --------------- --------------- --------------- --------------- -------- ------
FIXED EXPENSES
Property Taxes 244 3.3 249 3.2 254 3.2 259 3.1 264 3.1
Insurance 203 2.7 211 2.7 218 2.7 226 2.7 233 2.7
Reserve for Replacement 300 4.0 311 4.0 322 4.0 333 4.0 345 4.0
Total 747 10.0 771 9.9 794 9.9 818 9.8 842 9.8
=========================== =============== =============== =============== =============== ======== ======
NET INCOME $1,965 26.2% $2,037 26.2% $2,112 26.3% $2,189 26.3% $2,273 26.4%
=========================== =============== =============== =============== =============== ======== ======
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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HVS International, Mineola, New York Income Capitalization Approach 126
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-27 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average Average A Corporate
Year Interest Rate Bond Yield
-------------------------------------------------------------
1st Quarter 1996 7.79% 7.37%
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
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HVS International, Mineola, New York Income Capitalization Approach 128
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find
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that lenders who are active in the market are using loan-to-value ratios of 65%
to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.104844 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals, and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-28 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $ 23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
================================================================================
Table 10-29 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 21% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus, it inherently incorporates the cost of debt and
equity capital. The terminal capitalization rate can be derived through a
mortgage and equity band of investment technique which calculates the weighted
average cost of the capital used in a hotel investment. Combining the mortgage
financing terms derived previously (namely, a 70% loan-to-value ratio and a
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HVS International, Mineola, New York Income Capitalization Approach 132
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0.104844 debt service constant) with a cash-on-cash equity dividend rate of 12%
produces the following overall capitalization rate.
Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70 x 0.10484 = 7.33905
Equity 30 x 0.12000 = 3.60000
--------
Overall Capitalization Rate 10.93905
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11%.
As previously discussed, a sale of the property triggers a reassessment of the
hotel. In order to recognize the impact of the change in the assessment which
would result from the assumed sale at the end of the tenth year, we have added
the tax rate to the calculated terminal cap rate. The resulting "loaded" tax
rate will be applied to the 11th-year net income before property taxes.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
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Table 10-30 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 21.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.4%
- --------------------------------------------------------------------------------
Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach to be $15,448,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 21%, then $15,448,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $ 10,814,000
Equity Component (30%) 4,634,000
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Total $ 15,448,000
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The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $10,814,000
Mortgage Constant 0.104844
-----------
Annual Debt Service $1,133,779
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-31 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $1,814,000 - $1,134,000 = $680,000
1998 1,718,000 - 1,134,000 = 584,000
1999 1,762,000 - 1,134,000 = 628,000
2000 1,828,000 - 1,134,000 = 694,000
2001 1,895,000 - 1,134,000 = 761,000
2002 1,965,000 - 1,134,000 = 831,000
2003 2,037,000 - 1,134,000 = 903,000
2004 2,112,000 - 1,134,000 = 978,000
2005 2,189,000 - 1,134,000 = 1,055,000
2006 2,273,000 - 1,134,000 = 1,139,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($2,546,000 / 0.124) $20,607,000
Less: Brokerage and Legal Fees 618,000
Mortgage Balance 9,048,000
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Net Sale Proceeds to Equity $10,941,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-32 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
-------------------------------------------------------------
Total Property $15,448,000 13.8%
Mortgage 10,814,000 9.4
Equity 4,634,000 21.0
Note: Whereas the mortgage constant and value are calculated on the
basis of monthly mortgage payments, the mortgage yield in this
proof assumes single annual payments. As a result, the proof's
derived yield may be slightly less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $15,448,000 value is correct, based on the assumptions
used in this approach.
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Table 10-33 Total Property Yield
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Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor @ 13.8% Cash Flow
- --------------------------------------------------------------------------------
1997 $ 1,814,000 x 0.878510 = $ 1,594,000
1998 1,718,000 x 0.771779 = 1,326,000
1999 1,762,000 x 0.678016 = 1,195,000
2000 1,828,000 x 0.595643 = 1,089,000
2001 1,895,000 x 0.523278 = 992,000
2002 1,965,000 x 0.459705 = 903,000
2003 2,037,000 x 0.403855 = 823,000
2004 2,112,000 x 0.354791 = 749,000
2005 2,189,000 x 0.311687 = 682,000
2006 22,262,000* x 0.273820 = 6,096,000
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Total Property Value $15,449,000
*10th year net income of $2,273,000 plus sales proceeds of $19,989,000
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Table 10-34 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $1,134,000 x 0.913796 = $ 1,036,000
1998 1,134,000 x 0.835024 = 947,000
1999 1,134,000 x 0.763041 = 865,000
2000 1,134,000 x 0.697264 = 791,000
2001 1,134,000 x 0.637158 = 723,000
2002 1,134,000 x 0.582232 = 660,000
2003 1,134,000 x 0.532042 = 603,000
2004 1,134,000 x 0.486178 = 551,000
2005 1,134,000 x 0.444267 = 504,000
2006 10,181,000* x 0.405970 = 4,133,000
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Value of Mortgage Component $10,813,000
*10th year debt service of $1,134,000
plus outstanding mortgage balance of $ 9,048,000
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Table 10-35 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 21.0% Cash Flow
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1997 $680,000 x 0.826473 = $ 562,000
1998 584,000 x 0.683058 = 399,000
1999 628,000 x 0.564530 = 355,000
2000 694,000 x 0.466569 = 324,000
2001 761,000 x 0.385607 = 293,000
2002 831,000 x 0.318694 = 265,000
2003 903,000 x 0.263392 = 238,000
2004 978,000 x 0.217686 = 213,000
2005 1,055,000 x 0.179912 = 190,000
2006 12,080,000* x 0.148693 = 1,796,000
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Value of Equity Component $ 4,635,000
*10th year net income to equity of $1,139,000
plus sales proceeds of $10,941,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 13.87%.
After reviewing the total property yields indicated by recent hotel sales, it is
our opinion that a 14% discount factor would be appropriate for the Holiday Inn
Select. The following table illustrates the discounted cash flow analysis using
a 14.0% discount factor.
================================================================================
Table 10-36 Discounted Cash Flow Analysis
- --------------------------------------------------------------------------------
Discount
Net Factor Discounted
Calendar Year Income @ 14.0% Cash Flow
---------------------------------------------------
1997 $ 1,814,000 0.87719 $ 1,591,228
1998 1,718,000 0.76947 1,321,945
1999 1,762,000 0.67497 1,189,300
2000 1,828,000 0.59208 1,082,323
2001 1,895,000 0.51937 984,204
2002 1,965,000 0.45559 895,228
2003 2,037,000 0.39964 814,061
2004 2,112,000 0.35056 740,381
2005 2,189,000 0.30751 673,135
2006 22,261,830 * 0.26974 6,004,991
Estimated Market Value: $15,296,795
(Say:) $15,300,000
Reversion Analysis
11th Year's Net Income $2,546,000
Capitalization Rate 12.4%
Total Sales Proceeds $20,607,042
Less: Broker & Legal @ 3.0% 618,211
-----------
Net Sales Proceeds $19,988,830
* 10th year net income of $2,273,000 plus sales proceeds of $19,988,830
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled, Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors. . . . This technique is simple but less reliable
because the derivation of the discount rate has little support." In light of
this consideration, we have relied on the $15,448,000 value conclusion indicated
by Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
Property: Hilton Hotel
Location: Ontario, CA
Date of Sale: November, 1996
Sales Price: $18,500,000
Grantor: MS Vickers, LP
Grantee: HEI Hotels
Year Opened: 1985
Number of Rooms: 308
Price per Room: $63,065
Confirmed By: HEI Hotels
Terms of the sale: All-cash transaction
Sale #2:
Property: Doubletree Hotel
Location: Santa Rosa, CA
Date of Sale: October, 1996
Sales Price: $15,500,000
Grantor: Santa Rosco
Grantee: HEI Hotels
Year Opened: 1985
Number of Rooms: 245
Price per Room: $63,265
Confirmed By: HEI Hotels
Terms of the sale: All-cash transaction
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Sale #3:
Property: Del Mar Hilton
Location: Del Mar, CA
Date of Sale: March, 1996
Sales Price: $14,450,000
Grantor: Travelers Insurance Group
Grantee: Patriot American Hospitality, Inc.
Year Opened: 1987
Number of Rooms: 245
Price per Room: $58,978
Confirmed By: Patriot American Hospitality, Inc.
Sale #4:
Property: Radisson Plaza
Location: Irvine, CA
Date of Sale: February, 1996
Sales Price: $20,000,000
Grantor: N/A
Grantee: Equistar
Year Opened: N/A
Number of Rooms: 289
Price per Room: $69,204
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Sale #5:
Property: Mondrian Hotel
Location: West Hollywood, California
Date of Sale: February, 1995
Sales Price: $17,400,000
Grantor: Crosslands FSB
Grantee: Morgan Hotel Group/Ian Schrager
Year Opened: N/A
Number of Rooms: 234
Price per Room: $74,359
Confirmed By: Hotels Motels Brokers of America
Comments: Converted from apartments in 1985.
Sale #6:
Property: Holiday Inn Park Center Plaza
Location: San Jose, California
Date of Sale: November, 1995
Sales Price: 14,400,000
Grantor: Holiday Inn Park Center Plaza,
c/o Mayfair Packing Company
Grantee: America General Hospitality
Year Opened: N/A
Number of Rooms: 235
Price per Room: $52,766
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In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in October of 1994. The details
of this transaction are summarized as follows.
Subject Property:
Property: Holiday Inn Select
Location: 1150 South Beverly Drive
Beverly Hills, California
Date of Sale: October, 1994
Sales Price: $6,100,000
Grantor: Ramada Assured Income Associates, L.P.
Grantee: BH California Hotel Limited Partnership
Year Opened: 1973
Number of Rooms: 260
Price per Room: $23,462
Confirmed By: Ashford Financial Corporation
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. According to information
provided by Ashford Financial Corporation, the subject property was one of six
Ramada Inns purchased as a package from an investment partnership sponsored by
Lehman Brothers. The above-listed price represents an allocation of the total
package price rather than a negotiated value for this single asset. The total
package price was $20,250,000, and was paid in cas, using all equity financing.
At the time of the transaction, the group of hotels was generating virtually no
operating income, and all were in extremely poor condition. The previous owners
were reportedly strongly motivated to sell due to the poor performance of the
hotels. Based on our understanding of the circumstances of this transaction, we
do not believe that this sale was reflective of market value.
The relevance of the previous transaction involving the subject property is also
undermined by the materially change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecast to continue this positive trend. As previously discussed, the market
for hotel investments has also improved significantly, due to changes in lender
and investor attitudes. Finally, the
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property itself has undergone a significant renovation, with a total of $3.2
million spend on upgrading the facilities and amenities. For these reasons, we
are of the opinion that the October, 1994 sale involving the subject property is
not a reliable indicator of the current value of the hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $52,800 to $74,400 per room, or
$13,700,000 to $19,300,000 for the 260-unit subject property. The income
capitalization approach indicates a value of $15,448,000, which falls within
this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1973, and will be approximately 23 years
old as of the date of this appraisal. The property is in moderate to good
physical condition after undergoing a $3.2-million renovation in 1995. The
depressed hotel market conditions that prevailed in the late 1980s and the early
1990s have also led to a degree of external obsolescence. In our opinion, it is
impossible to identify and quantify the impact of these factors on the
property's value with any accuracy, so we will estimate only the replacement
cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled, The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------ ------------------------------------------------------------------ ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 -- - --
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 -- - --
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 -- - --
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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<PAGE>
HVS International, Mineola, New York Cost Approach 150
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly - at average annual compounded rates ranging from 0.5%
to 1.4% - between 1986 and 1995, largely as a result of the declines in 1991,
1992, and 1993. In 1995, hotel development costs started to escalate more
rapidly, reaching 4.7% in the economy segment. As more hotels are developed, we
expect costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
- --------------------------------------------------------------------------------
Cost No. of
Hotel Cost per Room Rooms Total Cost
-------------------------------------------------------------
Building $51,000 260 $13,260,000
FF&E 15,000 260 3,900,000
Pre-Opening 3,500 260 910,000
Operating Capital 2,500 260 650,000
-------------------------------------------------------------
Totals $72,000 $18,720,000
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the
<PAGE>
HVS International, Mineola, New York Cost Approach 151
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hotel's economic rent, or what is also known as the income attributable to the
land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Holiday Inn Select appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.9% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 5.0% and 6.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 5.5% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1996 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (in 1996 dollars) $ 4,987,748
Rent Percentage 5.50%
-----------
Economic Ground Rent $ 274,326
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
<PAGE>
HVS International, Mineola, New York Cost Approach 152
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Economic Ground Rent $274,326 $2,743,261
------------------------ = -------- =
Capitalization 0.10
Estimated Land Value (Say) $2,700,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 17.3% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
- --------------------------------------------------------------------------------
Cost of the Improvements and FF&E $18,720,000
Land Value 2,740,000
-----------
Total Replacement Cost $21,460,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This case creates an effective barrier to entry
for new competition, thereby reducing the risk associated with the subject
property's income-generating potential. An upward adjustment of the value
indicated by the income capitalization approach is also justified by this
barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Holiday Inn Select. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 153
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================================================================================
13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
-------- ----------------
Income Capitalization $15,448,000
Sales Comparison $13,700,000 - $19,300,000
Cost (Replacement Cost) $21,460,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 157
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 158
Limiting Conditions
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6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is within the
boundaries of the property described, and that there is no encroachment or
trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 159
Limiting Conditions
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15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor make
provision for the effect of any sharp rise or decline in local or national
economic conditions. To the extent that wages and other operating expenses
may advance during the economic life of the property, we expect that the
prices of rooms, food, beverages, and services will be adjusted to at
least offset those advances. We do not warrant that the estimates will be
attained, but they have been prepared on the basis of information obtained
during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 160
Limiting Conditions
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21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 161
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Manav G. Thadani personally inspected the property described in this
report; Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis, but did not personally inspect the property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
<PAGE>
HVS International, Mineola, New York Certification 162
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Manav G. Thadani
------------------------------------
Manav G. Thadani
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd Jones
------------------------------------
Anne R. Lloyd Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
------------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Courtyard by Marriott
[GRAPHIC OMITTED]
Doubletree Hotel
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Holiday Inn Express
[GRAPHIC OMITTED]
Ramada West Hollywood
<PAGE>
Beverly Hills, CA
Lega1 Description
PARCEL 1:
LOT 5 OF TRACT 30913, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 798 PAGES 37 TO 40 INCLUSIVE OF MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 2:
THOSE PORTIONS OF LOTS 1 AND 6 OF TRACT 30913, IN THE CITY OF LOS ANGELES,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 798
PAGES 37 TO 40 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, LYING WESTERLY OF THE SOUTHERLY PROLONGATION OF THAT CERTAIN COURSE
SHOWN ALONG THE WESTERLY LINE OF SAID LOT 6, AS HAVING A BEARING AND LENGTH OF
NORTH 0 DEGREES 05 MINUTES 49 SECONDS EAST 90.47 FEET.
PARCEL 3:
LOTS 1 AND 6 OF TRACT 30913, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 798, PAGES 38 TO 40 INCLUSIVE
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THOSE PORTIONS OF SAID LOTS 1 AND 6, LYING WESTERLY OF THE SOUTHERLY
PROLONGATION OF THAT CERTAIN COURSE SHOWN ALONG THE WESTERLY LINE OF SAID LOT 6,
AS HAVING A BEARING AND LENGTH OF NORTH 0 DEGREES 05 MINUTES 49 SECONDS EAST
90.47 FEET.
EXCEPT FROM THAT PORTION OF LOT 1, INCLUDED WITHIN THE LINES OF LOT 1639 OF
TRACT NO. 6380, RECORDED IN BOOK 69 PAGES 11 TO 20 INCLUSIVE OF MAPS, ALL OIL,
GAS, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND, BUT
WITHOUT RIGHT OF ENTRY FOR EXTRACTION OF SAME, AS RESERVED IN DEED FROM JULIUS
L. SAMSON AND SYLVIA SAMSON, HUSBAND AND WIFE, AS JOINT TENANTS, RECORDED
FEBRUARY 21, 1963 IN BOOK D-1934, PAGES 148, OFFICIAL RECORDS.
ALSO EXCEPT FROM THAT PORTION OF LOT 1, INCLUDED WITHIN THE LINES OF LOT 1640 OF
TRACT 6380, AS PER MAP RECORDED IN BOOK 69 PAGES 11 TO 20 INCLUSIVE OF MAPS, ALL
OIL AND OR MINERALS, WITHOUT ANY RIGHT OF SURFACE ENTRY ON SAID LAND OR THE
SUBSURFACE OF SAID LAND ABOVE A DEPTH OF 500 FEET, AS RESERVED IN DEED FROM
DOUGLAS KLEIN AND MATILDA KLEIN, HUSBAND AND WIFE, RECORDED AUGUST 12, 1959 IN
BOOK D-568 PAGE 720, OFFICIAL RECORDS.
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Franchise 1
and License Agreements
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Synopsis of Franchise and License Agreements
Date: February 6, 1995
Licensor: Holiday Inn Franchising, Inc.
Licensee: BH California Hotel Limited Partnership
Premises: Holiday Inn Select - Beverly Hills
Term: Ten Years
Renewal: No extension clause in the agreement
Fees: 5.0% of gross rooms revenue
Licensor Obligations: Marketing Contribution
Reservation System
Licensee Obligations: Renovations in compliance with Holiday Inn - Select
standards
Termination: January, 2005
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Hotel 1
Management Agreement
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Synopsis of Hotel Management Agreement
Date: October 1, 1994
Owner: BH California Hotel Limited Partnership
Manager: Remington Hospitality, Inc
Premises: Holiday Inn - Select
Term: Fifteen Years
Renewal: Option to extend for two successive five-year
periods. The Manager may elect to exercise any such
option to renew, and shall give Owner notice to that
effect not less than six months prior to the
expiration of the current term.
Management Fee: 3.0% of gross rvenues
Reserve for Replacement: 3% of the premises' gross revenues
Termination: September, 2009
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 1
Simultaneous Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 2
Simultaneous Valuation Formula
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This process can be expressed in two algebraic equations that set forth the
mathematical relationships between the known and unknown variables using the
following symbols.
NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
de = Annual cash available to equity
dr = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
fp = Annual constant required to amortize the entire loan during the
projection period
Rr = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/Sn = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (de) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 3
Simultaneous Valuation Formula
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NI - (f x M x V) = de
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI11) by
the terminal capitalization rate (Rr). The following formula represents the
property's tenth-year reversionary value.
(NI^11/Rr) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11/Rr), are
calculated by application of the following formula.
b (NI^11/Rr) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (fp) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(fp - i) = P
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 4
Simultaneous Valuation Formula
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HVS
- -------------
INTERNATIONAL
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If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (dr) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/Rr) - (b (NI^11/Rr) - ((1 - P) x M x V) = dr
Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = de^1
NI^2 - (f x M x V) = de^2
NI^10 - (f x M x V) = de^10
(NI^11/Rr) - (b (NI^11/Rr) - ((1 - P) x M x V) = dr
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 5
Simultaneous Valuation Formula
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/Sn). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(de^1 x 1/S^1) + (de^2 x 1/S^2) + . . .
+ (de^10 x 1/S^10) + (dr x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/Rr) - (b (NI^11/Rr)) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the property's value (V) is the only unknown, this equation can be
solved readily.
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 6
Simultaneous Valuation Formula
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HVS
- -------------
INTERNATIONAL
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================================================================================
Table 1: Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 21.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.4%
- --------------------------------------------------------------------------------
The following table illustrates the present worth of a $1 factor at the 21%
equity yield rate.
================================================================================
Table 2: Present Worth of $1 Factor at the Equity Yield Rate
- --------------------------------------------------------------------------------
Present Worth of $1
Calendar Year Factor @21.0%
-------------------------------------------------------------
1997 0.826473
1998 0.683058
1999 0.564530
2000 0.466569
2001 0.385607
2002 0.318694
2003 0.263392
2004 0.217686
2005 0.179912
2006 0.148693
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.104844 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.163306
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.104844 x 0.70 x V = 0.073391 V
<PAGE>
HVS International, Mineola, New York Addenda: Explanation of the 7
Simultaneous Valuation Formula
- --------------------------------------------------------------------------------
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HVS
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INTERNATIONAL
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Inserting the known variables into the hotel valuation formula produces the
following.
(1,814,000 - 0.073391 V ) x 0.826446 +
(1,718,000 - 0.073391 V ) x 0.683013 +
(1,762,000 - 0.073391 V ) x 0.564474 +
(1,828,000 - 0.073391 V ) x 0.466507 +
(1,895,000 - 0.073391 V ) x 0.385543 +
(1,965,000 - 0.073391 V ) x 0.318631 +
(2,037,000 - 0.073391 V ) x 0.263331 +
(2,112,000 - 0.073391 V ) x 0.217629 +
(2,189,000 - 0.073391 V ) x 0.179859 +
(2,273,000 - 0.073391 V ) x 0.148644 +
(((2,546,000 / 0.124 ) - ( 0.03 x (2,546,000/ 0.124 )) -
(( 1 - 0.163306 ) x 0.70 x V )) x 0.148644 ) = ( 1 - 0.70 ) V
Like terms are combined as follows.
$10,575,512 - 0.384589 V = (1 - 0.70) V
$10,575,512 = 0.68459 V
V = $10,575,512 / 0.68459
V = $15,447,964
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $15,400,000
<PAGE>
HVS International, Mineola, New York Qualifications of Manav G. Thadani
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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================================================================================
Manav G. Thadani
Employment
1995 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports and Investment Counseling)
1993 to 1995 NEW YORK UNIVERSITY
New York, New York
Teaching Fellow, Dept. of Food & Hotel Management
1994 CLUB QUARTERS
New York, New York
1993 SHERATON CENTER & TOWERS
New York, New York
1992 THE PENINSULA
New York, New York
1991 HOLIDAY INN CROWNE PLAZA
New York, New York
1990 SHERATON MANHATTAN
New York, New York
1988 - 1989 THE OBEROI
New Delhi, India
Education MA/BS - Hotel and Restaurant Management,
School of Education, New York University
<PAGE>
HVS International, Mineola, New York Qualifications of Manav G. Thadani
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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================================================================================
Examples of Corporate and
Institutional Clients Served
Alden Capital Markets, Inc.
Aldrich Eastman Waltch
Amerigold Everest IV L.P.
Ashford Financial Corporation
Bear Steams
Best Western International
CIGNA
Columbia Sussex, Inc.
Credit West
Gibson, Dunn & Crutcher
Goldman Sachs Mortgage Company
HEI Hotels
Holiday Inn International
Hotels of Distinction, Inc.
Mardeck, Ltd.
Morgan Stanley
Nomura Securities
Ocwen Financial Corporation
RCI International
Shaner Hotel Group, Inc.
Starwood Capital Group, L.P.
Super 8 Motels, Inc.
<PAGE>
HVS International, Mineola, New York Qualifications of Manav G. Thadani
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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================================================================================
Examples of Hotels
Appraised or Evaluated
Arizona
- - Doubletree, Tucson
- - Holiday Inn City Center, Tucson
- - Hotel Park Tucson, Tucson
Arkansas
- - Horseshoe Bend Resort, Horseshoe Bend
California
- - Holiday Inn Select, Beverly Hills
- - Marriott's Laguna Cliffs Resort, Dana Point
- - Embassy Suites Palm Desert, Palm Desert
- - Marriott Desert Springs Resort & Spa, Palm Desert
Connecticut
- - Holiday Inn Express, East Windsor
District of Columbia
- - Best Western Downtown Capitol Hill, Washington
- - Best Western New Hampshire Suites, Washington
- - Best Western Skyline Inn, Washington
- - River Inn, Washington
Georgia
- - Days Inn - Downtown, Atlanta
Illinois
- - Omni Orrington, Evanston
Maryland
- - Best Western Capital Beltway, Lanham
New Jersey
- - Holiday Inn, Bridgeport
- - Governor Morris Hotel & Conference Center, Morristown
New York
- - Econolodge, Canandaigua
- - Comfort Inn, Jamestown
- - Melville Marriott, Melville
Ohio
- - Embassy Suites, Columbus
- - Proposed Hampton Inn, Elyria
- - Holiday Inn, Elyria
Pennsylvania
- - Best Western City Center, Philadelphia
West Virginia
- - Super 8, Dunbar
- - Super 8, Elkins
- - Super 8, Weston
Virginia
- - Best Western, Leesburg
- - Comfort Inn, Lynchburg
- - Embassy Suites, Tysons Corner
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
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INTERNATIONAL
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================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
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================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
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HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Rushmore, CRE, MAI, CHA
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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HVS
- -------------
INTERNATIONAL
=============
================================================================================
Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
==============================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
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Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Holiday Inn Select
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Clark, New Jersey
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
December 30, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Holiday Inn Select
Clark, New Jersey
Ref. #9610269
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Union County area.
Our report was prepared in accordance with, and is subject to, the requirements
of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and
the Uniform Standards of Professional Practice (USPAP), as provided by the
Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple interest in
the subject property described in this report, as of January 1, 1997, is:
$10,700,000
TEN MILLION SEVEN HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Rodney G. Clough
Rodney G. Clough
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary ........................................... 1
2. Nature of the Assignment .................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ........................... 7
4. Market Area Analysis ........................................ 23
5. Overview of External Forces Affecting the U.S.
Lodging Industry ......................................... 44
6. Lodging Market Supply and Demand Analysis ................... 60
7. Projection of Occupancy and Average Rate .................... 78
8. Highest and Best Use ........................................ 91
9. Approaches to Value ......................................... 93
10. Income Capitalization Approach .............................. 96
11. Sales Comparison Approach ................................... 133
12. Cost Approach ............................................... 142
13. Reconciliation of Value Indications ......................... 148
14. Statement of Assumptions and Limiting Conditions ............ 152
15. Certification ............................................... 155
Addenda
Photographs of the Subject Property
Photographs of the Competitive Properties
Legal Description
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Addenda (continued)
Synopsis of Holiday Inn License Agreement
Synopsis of Hotel Management Agreement
Explanation of the Simultaneous Valuation Formula
Qualifications
Rodney G. Clough
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Holiday Inn Select
Location: 36 Valley Road
Clark, New Jersey 07066
Date of Inspection: October 24, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
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Area: +/-5.0007 acres, or +/-217,830
square feet
Zoning: COH - Commercial Office, Multi-Story
Assessor's Parcel Number: 154-03,05,07
Improvements Description
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Age: Constructed in 1973
Property Type: Full-service
Guestrooms: 191
Number of Stories: Six stories
Food and Beverage Facilities: One restaurant and one lounge
Meeting Space: 8 rooms, 7,493 square feet
Parking: 267 spaces (around the perimeter of
the building)
Summary of Value Parameters
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Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Four
Stabilized Year: 2000
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Valuation Assumptions
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Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 11%
Brokerage and Legal Fees: 3.0%
Holding Period: 10 years
Calculated Discount Rate: 14.56%
Estimates of Value
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Income Capitalization Approach: $11,100,000
Sales Comparison Approach: $9,500,000 - $12,700,000
Cost Approach (Replacement Cost): $15,500,000
Market Value Conclusion: $10,700,000
Market Value Conclusion per Room: $56,000
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-217,830-square-foot (+/-5.0007-acre) parcel improved with a 191-room,
full-service lodging facility known as the Holiday Inn Select, which opened in
1973. In addition to guestrooms, the subject property contains 7,493 square feet
of meeting space, a restaurant, a lounge, an outdoor pool with outdoor grill
area, a gift shop, an exercise room, and appropriate back-of-the-house
facilities. The hotel is located northeast of the intersection of Walnut and
Valley Roads. The hotel is just south of the Garden State Parkway; and, given
the height of the structure, is visible from the Parkway. Municipal
jurisdictions governing the property include the City of Clark, Union County,
and the State of New Jersey. The hotel's civic address is 36 Valley Road, Clark,
New Jersey, 07066.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Clark
area for the purpose of estimating the market value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
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HVS International, Mineola, New York Nature of the Assignment 4
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3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of HVS International.
Scope of the Appraisal
All information was collected and analyzed by the staff of HVS International.
Data such as historical operating statements, site plans, floor plans, and so
forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities and analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility).
Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(3) Hotels,
Motels and Restaurants: Valuations and Market Studies,(4) The
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
(3) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(4) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore,
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HVS International, Mineola, New York Nature of the Assignment 5
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Computerized Income Approach to Hotel/Motel Market Studies and Valuations,(1)
and Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations.(2)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
Current title is held by Clark New Jersey Hotel Limited Partnership - an entity
controlled by Ashford Financial Corporation. The subject property was purchased
from a RTC Mortgage Trust on August 24, 1995. The letter of intent was signed
with JCF Partners, as asset manager for the RTC Mortgage Trust.
The subject property is operated under a franchise agreement with Holiday Inn;
this agreement expires on April 1, 2006. The hotel is also subject to a
management agreement with Remington Clark Employers Corporation; an abstract of
this contract is presented in the Addenda to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(1) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(2) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Rodney G. Clough on October 24, 1996.
<PAGE>
HVS International, Mineola, New York Description of the Land, Improvements, 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located along the southeast side of the Garden State Parkway
at exit 135. The site is bordered to the east by Walnut Avenue and to the south
by Valley Road; the topography of the parcel is generally flat. Municipal
jurisdictions governing the property include the City of Clark, Union County,
and the State of New Jersey.
According to a the Clark Township Tax Assessor's Office, the subject parcel
measures approximately +/-217,830 square feet, or +/-5.0007 acres. The site is
irregular in shape and features the following frontages: 340.4 feet to the
southeast, along Walnut Street; 145.13 feet to the south, along the curve
between Walnut Street and Valley Road; 189.79 feet along Valley Road to the
southwest; 276.02 feet along the northern border of the property (inclusive of
some frontage along the Garden State Parkway); and 361.75 feet along the eastern
border of the property. Primary vehicular access to the property is provided by
Walnut Street, secondary vehicular access is provided by Valley Road.
In conclusion, size and topography of the subject parcel appear appropriate for
hotel use. The site is fully developed, with no excess land available for
expansion.
Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purposes of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would affect its use or marketability.
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HVS International, Mineola, New York Description of the Land, Improvements, 8
Zoning, Taxes, and Neighborhood
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Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. Several local
routes serve the subject property's area.
Union County is extremely well served by a mixture of interstate, state, county,
and local roadways. These roadways include the Garden State Parkway, and
Interstates 95 (also known as the New Jersey Turnpike) 78, and 287. Of these,
the most important insofar as the subject property is concerned is the Garden
State Parkway.
The subject property enjoys frontage along the Garden State Parkway. This
parkway is a toll road that extends on a north/south axis, roughly paralleling
the New Jersey coastline from I-87, the New York State Thruway, in New York
State (to the north) to Cape May, at New Jersey's southern tip. The Garden State
Parkway provides access along New Jersey's eastern shoreline, and intersects
with other major highways, such as I-78, I-95, U.S. Highways 202 and 9, and the
Atlantic City Expressway.
Located approximately ten miles to the south of the subject property is the
Garden State Parkway's intersection with Interstate 95, which provides a major
link between northern New Jersey and New York City. At its intersection with
I-80, I-95 leads northbound motorists directly to the George Washington Bridge,
from which Manhattan's West Side can be accessed. I-95 then continues northward
through the Bronx, intersecting I-87 (known as the Major Deegan Expressway) and
I-295 (which channels traffic to access Long Island), and continues northward
through the New York County of Westchester, and on into Connecticut and the New
England States. To the south of its intersection with I-80, I-95 is known as the
New Jersey Turnpike, and provides access throughout the State of New Jersey;
this highway then continues southward, roughly paralleling the Eastern Seaboard,
as far as Miami, Florida.
Interstate 78 intersects the Garden State Parkway approximately 12 miles north
of the subject property. This interstate commences in Harrisburg, Pennsylvania
and traverses east to its termination point in Newark, New Jersey. Interstate
287 intersects the Garden State Parkway approximately 2 miles south of the
Parkway's intersection with Interstate 95 (12 miles south of the subject
property). To the northeast, Interstate 287 provides regional access to Staten
Island and eventually the boroughs of Brooklyn, Queens, and the Bronx in New
York City. To the west, Interstate 287 follows the western border of the greater
Newark metropolitan area, eventually
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continuing north to its intersection with Interstate 87 (the Interstate 287
termination point).
Given the subject property's location proximate to the Garden State Parkway,
regional access to the Holiday Inn Select is considered excellent.
Local Access and Visibility
Motorists utilize exit 135 to access the Clark area of New Jersey from the
Garden State Parkway. After exiting, motorists encounter a traffic circle which
provides access to various local roads and on-ramps to the Garden State Parkway.
Hence, given the multitude of road choices that can be taken from the circle,
coupled with the various on-ramps of local and interstate traffic, access from
this circle to the subject property (as well as from the subject property to the
parkway) can be initially confusing.
Motorists traveling northbound on the Garden State Parkway take exit 135 and
follow the traffic circle at the end of the exit ramp to the Valley Road exit
(the second possible exit choice). The subject property is then located to the
northeast, to the left of the driver. Motorists traveling southbound on the
parkway utilize the similarly numbered exit and follow the traffic circle at the
end of the exit ramp to the Valley Road exit (the fourth possible exit choice).
Signage for this Valley Road exit (and all other exits) exists to assist
drivers. To reach the parkway from the subject property, motorists exit right
onto Valley Road and drive in a northwesterly direction to the traffic circle.
The first exit provides access to the northbound parkway, and the third exit
provides access to the southbound parkway.
Visibility of the subject property is favorable. The six-story structure is
visible from the Parkway, and adequate signage exists along Valley Road and
Walnut Avenue.
Given the close proximity of the subject property to this traffic circle, and
the proximity of the site to the Garden State Parkway, local access to the
subject property is considered excellent and the visibility of the subject
property is considered favorable.
Airport Access
I-78 provides access to the subject property from Newark International Airport,
located roughly five miles to the east of the I-78/Garden State Parkway
intersection. Although further from the subject property, access is also
possible from John F. Kennedy and LaGuardia International Airports.
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Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-1 Available Utilities
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Utility Provider
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Water Clark Township
Electricity Public Service Electricity and Gas
Local Telephone Bell Atlantic
Long Distance Telephone AT&T
Sewer and Storm Drainage Clark Township
Garbage and Trash Demarco
Cable Television Comsast
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented in the Addenda to this
report.
Conclusion
The subject parcel appears appropriate as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The site size is large enough to allow for sufficient parking and other
related hotel uses.
o The site enjoys a favorable location along the Garden State Parkway, and
is easily accessible from Newark International Airport.
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o The site is visible to motorists traveling both directions on the Garden
State Parkway.
o The site is served by all necessary utilities.
Disadvantages
o The local access traffic circle can be confusing for motorists.
The advantages noted above are important locational characteristics. In
conclusion, the site appears favorable for the location of a transient lodging
facility.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by Ashford Financial
Corporation.
Holiday Inn Select is a full-service lodging facility containing 191 rentable
units, 7,493 square feet of meeting space, a restaurant, a lounge, an outdoor
pool with outdoor grill area, a gift shop, an exercise room, and the appropriate
back-of-the-house facilities. The six-story property opened in 1973, and is 23
years old as of the date of this appraisal. The hotel was acquired by Clark New
Jersey Hotel Limited Partnership - an entity controlled by Ashford Financial
Corporation in August of 1995. At the time of this acquisition, the hotel was in
extremely poor condition. Subsequent to the acquisition, the subject property
was extensively renovated at an estimated cost of $3,200,000. In scope, this
renovation included the exterior of the building, public areas and the
guestrooms. The hotel is now judged to be in excellent condition, and management
representatives report that all building systems are in working order. The hotel
is operated under a license agreement with Holiday Inn and reportedly meets the
standards for lodging facilities of that brand.
Based on our inspection and information provided by Ashford Financial
Corporation, the following table summarizes the facilities available at the
subject property.
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Table 3-2 Facilities Summary
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Guestrooms
King Beds 95 Units
Double/Doubles 96
Parlor 1
------
Total 192 Units
Food and Beverage Outlets
Hunter's Grill 110 Restaurant Seating
50 Bar Seating
Meeting and Banquet Rooms
Clarktown Ballroom 2,054 Square Feet
Suite C 624
Scotchwood 897
Woodbridge 1,274
Westfield 624
Mountainside 624
Cranford 650
Springfield 650
Berkley 720
------
Total 7,493 Square Feet
Recreational & Other Amenities
Outdoor Swimming Pool with Grill Area
Exercise Room
Parking Spaces 267 Outdoor spaces
Elevators
Guest 2
Service 0
Life Safety Systems
Battery operated smoke detectors in all guestrooms
Hardwired smoke detectors in public spaces
Building sprinklered in all guestrooms and public spaces
Pull stations and fire extinguishers throughout
Laundry
Washers 3
Dryers 3
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Property Exterior
The hotel structure is situated on the northwestern portion of the site. Paved
parking areas accommodating 267 vehicles are located around the perimeter of the
building, with the majority of the spaces situated east and south of the hotel
structure. The pavement is in good condition. The property's exterior appears to
be in excellent condition and was repainted subsequent to the hotel's purchase
by its current owners. Due to the hotel's
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HVS International, Mineola, New York Description of the Land, Improvements, 13
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relatively new affiliation, signage is new and appears to be in excellent
condition.
Primary vehicular access to the subject site is provided via Valley Road, along
the southwestern border of the site; and secondary access is provided via Walnut
Road, along the southeastern border of the site. Along Walnut Road there are
actually two entrances, there is an entrance near the eastern corner of the site
and an entrance near the southern corner of the site. Most guests are coming
from the Parkway; hence, guests approach the hotel from the northwest. After
entering the site, guests proceed to the hotel's main entrance, which is located
along the southern side of the hotel building. Service traffic can gain access
to the loading dock, which is located along the northern side of the building.
Construction and Design
The subject property design includes a six-story tower with a four-story wing,
and one extension emanating from this tower: the porte cochere at the hotel's
main entrance along the southeastern side of the main tower. The main six-story
tower aligns in a southwest/northeast direction, and the four-story extension
emanates from the southwestern edge of the main tower. The guestrooms are double
loaded off interior corridors. Reportedly, the main tower was originally
designed to be constructed with more levels; however, when local officials
protested, the construction was halted at six levels and an additional wing was
added to incorporate the remaining guestrooms. This late change to the buildings
design is apparent in the S-shaped hallway that connects the wing to the main
tower on levels one through four.
It is important to note that the hotel structure does not feature any one- or
two-story extensions for meeting space; the hotel's meeting space is contained
within the hotel tower. Due to the configuration of columns within the hotel
structure, the largest available meeting space is limited in size. This is an
important issue of functional obsolescence.
Management reports no structural, plumbing, or electrical problems with the
subject property. Although there was some water leakage with one storm during
the last year, the roof is reportedly in superior condition.
Lobby
As stated previously, the porte cochere is situated along the southeastern side
of the building. The lobby is located directly northwest of this porte cochere.
Guests reach the lobby through one set of double doors (motion-sensored,
electronically opened) which first leads to a breezeway, and then
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a second set of double doors (also electronic) which leads to the lobby.
Directly in front of the guest is the front desk. To the left of the guest is
the main first floor hallway which provides access to the gift shop, hotel
offices, a bank of public telephones, and the first floor guestrooms of the
south wing. To the right of the guest is the lobby seating area and a public
hallway (following the northwestern side of the lobby) which provides access to
the guestroom elevators, public restrooms, an additional bank of public
telephones, the restaurant and bar, a secondary hotel entrance, and a public
stairwell leading to the second floor meeting space.
The lobby features ten seats (including one sofa), plants, various tables,
framed artwork, and is in excellent condition after its renovation in 1995. The
lobby also features windows overlooking the entrance to the hotel. The hotel's
property management system utilized at the front desk is Multisystems
Incorporated. The subject property's features a Navigator telephone system.
Food and Beverage Outlets
As stated previously, northeast of the lobby is the entrance to the hotel's
restaurant and lounge (there is no separate exterior entrance), Hunter's Grill.
The restaurant and lounge areas feature separate entrances, and a distinctly
different decor and ambiance. The restaurant is the subject property's
multi-purpose restaurant, serving breakfast, lunch and dinner seven days a week
(6 AM to 11 PM). This area was similarly renovated with the other areas of the
hotel and appears to be in excellent condition; management hopes to add more
plants to the room in 1997. The restaurant features a main dining level and two
raised dining areas which add depth and interest to the room. The room features
glass-top tables and a stationary buffet which is used each morning for the
hotel's breakfast service.
The bar is adjacent to the restaurant and is open during the afternoon and
evening hours (11 AM - 1 AM). The bar and immediate bar seating is raised
(similar to the raised areas of the restaurant) above the remaining area of the
bar; this remaining area accommodates the bar's dance floor, additional seating,
a jukebox, and a small stage area. The wall between the hallway and the lounge
features several windows; management plans to add awnings over these windows in
1997 to add to the decorative scheme of the hallway. Management also plans to
add signage for the restaurant and bar; currently there is no signage
identifying the outlets as the Hunter's Grill. The bar appears to be in
excellent condition.
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Meeting and Banquet Space
Except for the 720-square-foot Berkeley room, the subject property's function
space is located on the second floor of the hotel. The meeting space remains in
superior condition after the renovation of the hotel. The ballroom features new
carpet, wallcovering, and lighting fixtures. A dance floor is available for
social functions; all standard audio-visual can be contracted through an on-site
servicing company. The ballroom is divisible into two sections and is in
superior condition; management plans to add wall light sconces and chandeliers
in 1997. The ballroom features a small break-out area which also appears in
excellent condition. This area features a variety of attractive artwork,
furniture, and plants, as well as a water fountain, men's and women's restrooms,
and three public telephones.
Drawbacks of the ballroom space include its limited size (the largest capacity
is 160 for a banquet), lack of direct back-of-house access, and limited
pre-function area. These drawbacks, however, can be overcome by using the space
directly across from the ballroom (the Scotchwood room) for pre-function and by
using the northern most entrance to the ballroom as a back-of-house entrance.
The only drawback that is impossible to surmount is the space's limited size;
this is an issue of functional obsolescence that would require a significant
capital investment to overcome. The limited size inhibits many larger meetings
and events; hence, the subject property is unlikely to obtain its fair share in
the meeting and group market. Given the superior quality of the space, however,
the hotel is still able to achieve a healthy penetration into this market and is
popular for training and small corporate meetings.
One additional meeting room is situated directly adjacent to the hotel
restaurant. Given the close proximity to the hotel kitchen; this room is most
often used for small banquets or formal private dinners. This space is
attractively decorated and features superior lighting fixtures and finishes.
Guestrooms
The subject property features 191 guestrooms, 95 of which contain king beds and
96 of which contain two double beds. The remaining room is a parlor room which
connects to a room with a king bed. In 1995, all guestroom bedroom areas
received a complete renovation which included all case goods and soft goods.
Bathrooms also received new wallpaper and other cosmetic refurbishments. The
following is a list of the furniture featured in a standard king guestroom:
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o King-sized bed with headboard
o Two nightstands with lamps
o Desk with chair and lamp
o Television (25-inch screen, remote controlled)
o Armoire with lamp
o Wall mirror
o Framed artwork
o Clothes hanging rack
Rooms with two double beds feature similar furniture, with one less nightstand.
Guest bathrooms are standard and in fair condition; while the renovation
addressed wallcovering, each bathroom's floor, vanity, sink, toilet, bathtub,
and bath tile are reportedly from the original construction and appear worn and
dated. Upgrades for the bathrooms are planned by management in the near future.
Extra features in the subject property guestrooms include clock radios, two
phones with dataports, coffee machines with complimentary coffee, luggage racks,
oversized televisions, hairdryers, and make-up mirrors.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with relatively new carpet
and wall finishes which were replaced in the previous renovation. Although
corridor lighting is sufficient and appears to be in good condition, its style
appears dated when compared to the hallway's recently updated finishes;
management reports that 1997 planned capital improvements include the updating
of these fixtures. Vending and ice machines are also provided on each guestroom
floor of the hotel.
Approximately 75% of the hotel's guestrooms (106 units) are non-smoking. This
type of amenity costs very little and requires no structural changes. We expect
that the number of rooms allocated for this purpose will be increased or reduced
depending on demand and guest response.
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Recreational Amenities
The subject property's recreational amenities include an outdoor pool with grill
and an exercise facility. Access to the pool is provided by a small public
hallway extending from the lobby, just north of the front desk. The pool deck is
scheduled to be refinished in 1997. Overall, the pool area appears to be in good
condition. The small public hallway features a small men's and women's bathroom.
These bathrooms are dated in appearance; 1997 capital improvements include a
re-coloring of the wall tiles, a new floor, and new mirrors.
The exercise room located on the fourth level contains two stationary bicycles,
two treadmills, and two Stairmasters. Extra features include bottled water, a
television, a courtesy phone, and a wall clock. All equipment is reportedly in
good working order. This room, open twenty-four hours, was originally a
guestroom before its conversion to its present use; the bathroom features a
scale and paper towel dispenser.
Back-of-the-House Space
Back-of-the-house space appears to be adequate for the operation of this
property. The main kitchen features a hot line, a separate pantry section, two
walk-in coolers, one small freezer, and a receiving area. Overall, the kitchen
appears to be in good working order. The main kitchen also features a dumb
waiter which transports food to the second floor holding kitchen. This
additional kitchen is located in the northeastern corner of the hotel, north of
the Scotchwood Room. Prior to the renovation, the Scotchwood Room and the
Ballroom were one large room; hence, the room was able to accommodate larger
banquets. Therefore, this second floor kitchen was once used as a banquet
kitchen. With the renovation and subsequent division of this larger room into
two smaller rooms, this kitchen is now primarily used as a holding kitchen.
The subject property features an in-house laundry facility which contains three
laundry machines and three dryers. Two of the laundry machines are manufactured
by Continental (85-pound capacity); these were purchased during the renovation.
The other is made by Milnor; its age was not readily known. The dryers are
manufactured by Huebsch, one of which was added since the renovation (120-pound
capacity). The ages of the older Milnor dryers were unavailable. The subject
property also features one ironer.
Vertical Transportation
Vertical transportation is provided by two elevators (2,500 pound capacity each)
and three stairwells. These elevators are utilized both for service staff and
guests which is one aspect of the building's functional obsolescence.
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The Armor elevator cabs were renovated last year and appear to be in good
condition. Scheduled 1997 upgrades to the cabs include the installation of
phones. There is one stairwell located at each end of the hotel tower.
Heating, Ventilation, and Air Conditioning
The subject property guestrooms are cooled by in-room through-the-wall heating
and cooling units that are in working order. Public areas are heated and cooled
by the subject property chillers and heated by hot-water coil units. The subject
property features one new boiler, and one water chiller (its age was
unavailable). The boiler reportedly handles the needed water heating capacity of
the subject property.
Based on information provided by Ashford Financial, all of the subject
property's operating systems are in sufficient working order to maintain the
operation of the hotel.
Fire Protection
The subject property is reportedly fully compliant with all fire standards. The
building is fully sprinklered in all guestrooms and public areas, and guestrooms
feature battery operated smoke alarms (hardwired in public areas). Guestroom
hallways and all public areas feature pull stations and fire extinguishers.
Security
The subject property employs a security guard to be on site during the evening
hours (11 PM to 7 AM). Doors feature a Tesa electronic locking system which
contributes to the security of the hotel. Given its location proximate to the
Parkway ( a convenient escape route), the subject property is at times a target
of crime. According to management, however, crime is not a significant issue and
the on-staff guard is sufficient to deter enough crime so that it does not
affect the competitive level of the property.
Asbestos
According to information provided by management representatives, there is no
asbestos present in the subject property's improvements; however, we have not
been provided with an asbestos report to confirm this assertion. The reader
should be advised that any costs associated with asbestos removal or containment
may have an unfavorable impact on the hotel's market value, and the estimate set
forth in this appraisal reflects our value conclusions prior to the deduction of
any such costs. We suggest that interested parties initiate an independent
analysis regarding current asbestos levels and the capital expenditures
necessary to remove any asbestos that is present.
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ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
The hotel's lobby, meeting space, guestroom bedroom areas, and guestroom
corridors are in excellent condition and have been maintained well since the
1995 renovation. Issues to be addressed in the near future include the pool and
pool public restrooms, and the guest bathrooms. For the purposes of this
appraisal, we have assumed that the subject property will be maintained in its
present condition throughout the assumed ten-year holding period. Specifically,
it is assumed that hotel management will employ standard preventive maintenance
measures, and that a reserve for replacement fund will be established which will
fund the cost of any future necessary capital expenditures.
ZONING
According to the Township of Clark zoning regulations and map, the subject
property is zoned as follows.
COH - Commercial Office, Multi-Story
This zoning provision allows general commercial uses including motor inns and
hotels, theaters, and multi-family housing specifically designed for and limited
to occupancy by senior citizens. Based on this information, the subject property
appears to conform to local zoning regulations. We assume that all necessary
permits and approvals have been secured (including an appropriate liquor
license), and that the subject property was constructed in accordance with local
zoning ordinances, building codes, and all other applicable regulations. Our
zoning analysis should be verified before any physical changes are made to the
hotel.
ASSESSED VALUE AND TAXES
Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and
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properties with higher and lower values will have proportionately larger and
smaller assessments. Depending on the taxing policy of the municipality,
property taxes can be based on the value of the real property or the value of
the personal property and the real property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
The historical assessed value of the subject property has not changed since
January 1, 1985 (this value is $10,121,378). According to the Clark Township Tax
Assessors Office, a reassessment is not expected in the short-term future.
Hence, for the purposes of our projections, we have assumed that the assessment
of the subject property is appropriate at its current level.
The assessment ratios and tax rates applicable to the subject property are
presented in the following table. These are also used to calculate the
historical tax burden of the subject property.
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Table 3-3 Historical Assessment Ratios, Tax Rates, and Tax Burdens Applicable
to the Subject Property
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Assessment Tax Rate Percent
Year Assessed Valuation Ratio (per $100) Total Tax Change
- --------------------------------------------------------------------------------
1985 10,121,378 100.00 % 2.20 $222,670 ---
1986 10,121,378 98.16 2.39 237,450 6.6 %
1987 10,121,378 86.63 2.47 216,573 (8.8)
1988 10,121,378 72.85 2.62 193,184 (10.8)
1989 10,121,378 63.10 3.07 196,068 1.5
1990 10,121,378 60.16 3.36 204,591 4.3
1991 10,121,378 58.05 3.41 200,353 (2.1)
1992 10,121,378 59.83 3.51 212,552 6.1
1993 10,121,378 59.92 3.84 232,886 9.6
1994 10,121,378 59.35 3.95 237,278 1.9
1995 10,121,378 58.85 4.11 244,809 3.2
1996 10,121,378 58.33 4.13 243,827 (0.4)
Percent Change 1991 - 1996: 0.1 % 3.9 % 4.0 %
Percent Change 1994 - 1996: (0.9) 2.3 1.4
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The above table illustrates that assessment ratio has decreased in recent years,
by 0.9% compounded annually between 1994 and 1996; however, the ratio increased
slightly by 0.1% compounded annually between 1991 and 1996. These trends
illustrate that the assessment ratio is stable and is proximate to 59%. The
above table also illustrates that the tax rate in this jurisdiction has
fluctuated in recent years; the rate has grown by 3.9% compounded annually
between 1991 and 1996, and by 2.3% compounded annually between 1994 and 1995.
For the purposes of this appraisal, we have assumed that the assessment ratio
will remain stable, and we have also assumed the tax rate will increase by 1% in
1997, by 2% in 1998, and then by inflation for the remaining projection period.
Applying these projected increases to the 1996 tax burden yields the following
forecast of property taxes for the subject property.
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Table 3-4 Forecast of Property Tax Expense (+000)
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1997 1998 1999 Stabilized
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Forecast Property Taxes $246 $251 $260 $269
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
As previously stated, the subject property is southeast of the Garden State
Parkway, proximate to exit 135. Given this superior accessibility, this
intersection area is developed with various commercial and industrial uses as
well as residential communities.
Directly east of the subject property (across Walnut Street) are several
buildings associated with Star Metal Products; further east of these buildings
is a residential area. North of the Star Metal Product buildings is the office
building 67 Walnut. Adjacent and to the north of the subject property is the
office building 60 Walnut. North of the 60 Walnut and 67 Walnut office buildings
is the overpass of the Garden State Parkway. Past this overpass is the Cali
Center, a large office complex, and the United States Gypsum Company (a gypsum
processing industrial plant). Two gas stations are also
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located proximate to the gypsum plant. North of the gypsum plant is the Hyatt
Clark Industries Company. This site is currently vacant and a golf course if
proposed for development on this site. An opening date for the course has not
yet been set and construction has not commenced.
South of the subject property is an area characterized by residences. Southeast
of the subject property is the Mother Seton Regional High School (across Valley
Road). Directly adjacent to the subject property and to the northwest is the
Clark Printing Company and the Union County Baptist Church. Northwest of these
developments is the Garden State Parkway and traffic circle discussed in the
accessibility section of this report.
Northwest of the Garden State Parkway is a neighborhood characterized by retail
uses that features a Bradlees, Marshalls, liquor store, bank, McDonalds, and
Burger King. This area also features a large vacant site; the construction of a
large Shoprite has begun which is due to open next year. The site was previously
improved with the Clarktown Inn, a motorlodge. This construction illustrates the
strength of the local economy and bodes well for the continued improvement of
the immediate neighborhood.
Conclusion
The neighborhood surrounding the Holiday Inn Select appears favorable for the
operation of a full-service lodging facility.
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HVS International, Mineola, New York Market Area Analysis 23
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The Holiday Inn Select is situated in the township of Clark, in the southern
portion of Union County, New Jersey. The area's major economic influences are
provided by the Newark Metropolitan Statistical Area (MSA); also included in
this area are Essex, Morris, Sussex, and Warren Counties.
Traditionally, New Jersey has been economically driven by the industrial,
manufacturing and transportation industries which are fueled by the readily
accessible deep water ports, airports and major highways linking the area to its
sources of raw materials. New Jersey's economy, marked by modest but steady
growth for the past two years, is in its 52nd month of a recovery that
economists and labor analysts expect to continue into next year. The fallout of
mergers and acquisitions in the telecommunication, pharmaceutical and banking
industries has been compensated by the creation of new jobs in financial and
business services, healthcare, and technology-related businesses.
The subject property's extended neighborhood is highly developed with
commercial, retail, industrial, transportation-related and residential uses.
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[GRAPHIC OMITTED]
AREA MAP
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New York - Northeastern New Jersey Region Economic Overview
The following summary is excerpted from Regional Economy - Review and Outlook
for the New York - New Jersey Metropolitan Region -April 1996, published by the
Port Authority of New York and New Jersey.
The regional recovery has proved to be resilient despite the negative effects of
higher interest rates, slower growth in the United States and leading
international economies, and continued restructuring in key regional industries
like banking, bio-medical and defense. Although growth slowed noticeably though
most of 1995, the NY-NJ region's gradual economic recovery continued for a third
year. Total jobs rose 62,100 in 1995, up 0.9 percent, following a 1.1 percent
increase in 1994. However, trends in total jobs mask the sweeping changes
underway in public and private sector employment throughout the region. During
1995, while government jobs declined 2.0%, private employment rose 1.7% in the
New York suburbs, 1.6% in Northern New Jersey, and 1.2% in New York City.
Importantly, the similar performance of the geographic subsectors of the region
reinforces strong regional economic integration that has become well established
since the onset of the 1989-1992 recession.
A slowing regional economy in 1995 occurred in conjunction with sluggish growth
in the United States through the year and persistent weakness in key
international markets, such as Japan and Mexico, which are significant partners
for trade and investment in the region. Regional gains were also dampened by the
cumulative effect of rising interest rates last year, which negatively affected
profits and bonuses on Wall Street, as well as new construction activity.
Regional consumers turned increasing cautious through the year, leading to a
disappointing performance in retail sales during the critical holiday season.
With many signals pointing to slower growth throughout the nation, long-term
interest rates began to ease significantly in the second half of 1995, setting
the state for a pick-up in growth later in 1996 and into 1997.
Despite lingering weakness in Japan and Mexico, the international sector has
been an important foundation for continued regional growth, as witnessed by the
record levels of international travel, tourism, and merchandise trade in 1995.
Furthermore, regional wages began to pick up to a 5% growth rate from 2.5% at
the close of 1994, according to the most recent data, and are expected to gain
with the improved profitability of the securities sector.
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The outlook is decidedly mixed over the short term as the significant
restructuring of leading banking, telecommunications, bio-medical, and
manufacturing corporations in the regional partially offsets expected jobs
growth. In spite of the headlines generated by these losses, overall gains will
continue in areas such as services, financial market activity, international
trade, tourism, and the multimedia and entertainment sectors. Importantly, these
sectors, which been the source for many of the 250,000 private jobs generated in
the region since the depths of the recession in late 1992, are well positioned
to take advantage of the improved growth expected in the United States and the
leading international economies in the next few years.
In addition to the Regional Economy - Review and Outlook for the New York - New
Jersey Metropolitan Region - April 1996, published by the Port Authority of New
York and New Jersey, additional information has been provided by the Bureau of
Labor Statistics, New York Department of Labor, Smith Travel Research, The New
Jersey Star Ledger, and Con Edison's Forecasting Newsletter (Third and Fourth
Quarters) for this analysis.
REGIONAL EMPLOYMENT
Within the New York-New Jersey region, employment continued to rise, as regional
jobs gained 62,100, (public and private jobs) or 0.9%, during 1995. This
performance represented a small decrease from the 1.1% gain in 1994. On a
month-to-month basis, modest increases in growth rates associated with mild
winter conditions in January and February of 1995 were realized. Employment
growth in the region was noticeably slower during the spring of 1995.
The following table illustrates the change in employment for the major sectors
in the Northern New Jersey region, illustrating 1985 to 1995 data. The following
information has been provided by the State of New Jersey Department of Labor.
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HVS International, Mineola, New York Market Area Analysis 26
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Table 4-1 Northern New Jersey Region Wage and Salary Employment by
Major Industry (+000)
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<TABLE>
<CAPTION>
Percent Percent Percent Percent Wholesale & Percent
Year Total Change Construction Change Manufacturing Change TCPU Change Retail Trade Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985 2,225.0 --- 82.9 --- 520.2 --- 172.2 --- 527.4 ---
1986 7,880.8 254.2 % 89.9 8.4 % 501.9 (3.5)% 176.8 2.7 % 540.4 2.5 %
1987 8,033.2 1.9 94.3 4.9 491.7 (2.0) 180.7 2.2 554.4 2.6
1988 8,473.8 5.5 99.8 5.8 479.6 (2.5) 178.2 (1.4) 564.0 1.7
1989 8,511.5 0.4 96.6 (3.2) 461.2 (3.8) 179.9 1.0 565.3 0.2
1990 8,384.1 (1.5) 87.2 (9.7) 427.7 (7.3) 176.9 (1.7) 546.6 (3.3)
1991 8,001.1 (4.6) 73.2 (16.1) 401.0 (6.2) 172.5 (2.5) 519.5 (5.0)
1992 7,829.0 (2.2) 64.2 (12.3) 379.7 (5.3) 171.8 (0.4) 507.2 (2.4)
1993 7,862.6 0.4 66.6 3.7 368.8 (2.9) 175.9 2.4 505.8 (0.3)
1994 7,941.6 1.0 69.4 4.2 363.0 (1.6) 182.2 3.6 514.1 1.6
1995 8,016.9 0.9 70.3 1.3 355.6 (2.0) 183.6 0.8 523.3 1.8
Annual Average Change:
1985 to 1995 13.7 % (1.6)% 10.9 % (3.7)% 0.6 % (0.1)%
1990 to 1995 (0.9) (4.2) 21.3 (3.6) 0.7 (0.9)
1994 to 1995 0.9 1.3 26.7 (2.0) 0.8 1.8
</TABLE>
Percent Services Percent Percent
Year FIRE Change & Misc. Change Government Change
- --------------------------------------------------------------------------------
1985 136.9 --- 484.2 --- 301.2 ---
1986 148.2 8.3 % 505.4 4.4 % 296.9 (1.4)%
1987 158.9 7.2 525.2 3.9 298.5 0.5
1988 165.1 3.9 544.5 3.7 302.0 1.2
1989 171.5 3.9 572.3 5.1 307.2 1.7
1990 166.8 (2.7) 580.4 1.4 309.9 0.9
1991 159.0 (4.7) 566.7 (2.4) 306.8 (1.0)
1992 158.8 (0.1) 574.3 1.3 307.7 0.3
1993 161.4 1.6 592.4 3.2 309.0 0.4
1994 162.9 0.9 609.9 3.0 310.1 0.4
1995 162.1 (0.5) 637.0 4.4 311.5 0.5
Annual Average Change:
1985 to 1995 1.7 % 2.8 % 0.3 %
1990 to 1995 (0.6) 1.9 0.1
1994 to 1995 (0.5) 4.4 0.5
Source: NYS & NJS Departments of Labor
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Since the regional economic recovery began inclusive of the greater New
Jersey-New York region, the eight counties of Northern New Jersey (including the
subject property's county) have paced well above the aggregate average; this
particular trend has labeled the area a "break out" economy. Northern New Jersey
added 31,800 jobs to its employment base which equated to a 1.4% growth rate.
The new jobs represented over one half the 1995 job growth in the NY-NJ region.
Even with that impressive accomplishment, the Northern New Jersey economy slowed
with each successive quarter in 1995.
Private sector employment expanded faster than total employment. The Northern
New Jersey private sector gained 30,200 jobs for a growth rate of 1.6%. This
performance was almost one-third of the private sector jobs added region wide.
The gains spread across four sectors: service, wholesale and retail trade, TCPU,
and construction. The job losses were concentrated in manufacturing and FIRE.
Growth continued to slow in the transportation, communication, public utilities
(TCPU) sector as continued layoffs at phone companies and energy utilities
offset gains in transportation employment. Manufacturing employment continued to
decline, losing 7,400 jobs - or 2.0% - in 1995. The region's wholesale and
retail trade sector continued to rebound strongly in 1995, gaining 9,200 jobs,
or 1.8%. According to the Departments of Labor for New York and New Jersey,
construction employment totals, which were severely affected by the recession,
continued to rise, with a gain of 9,000 - or 1.3% - in 1995. The slight increase
in public sector employment continued in 1995, with an increase of 0.5%.
Employment in the Northern New Jersey Region
In addition to reviewing employment trends for the New York-New Jersey region as
a whole, we have also reviewed data for the Northern New Jersey area. Employment
data for this review is based on information provided by the Port Authority of
New York and New Jersey and the New Jersey Star Ledger. These most recent
available employment statistics were through July of 1996.
Job gains in the eight-county Northeastern New Jersey area, consisting of
Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset and Union Counties,
drove the regional recovery. Following employment growth of 29,700, or 1.4%, in
1994, the increase in employment increased 2.0% in Northeastern New Jersey in
the first half of 1995. By midyear-1996, New
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Jersey had a net gain of 18,600 jobs and was on pace to match last year's gain
of 36,600 jobs (statewide).
The Counties of Hudson and Bergen led the overall employment gains in
Northeastern New Jersey. Services sector job growth was strong, at 3.5%, and
construction job growth, which benefited from the mild winter conditions, was
6.8%.
Job growth for the first half of 1995 increased 2.0%, outperforming 1994. The
rise in overall job growth is attributable to the wholesale-retail trade and
FIRE sectors, which had significant gains throughout 1994. Job reductions in the
telecommunications and energy components of TCPU detracted from the pace of
total job growth. Manufacturing jobs fell 1.5%, with the largest losses
occurring in the Counties of Bergen, Passaic, Middlesex, and Somerset.
Similar to 1994, some divergence in the rates of job growth took place among the
several labor markets that make up the eight-county Northeastern New Jersey
sector. Growth was strongest in the more recently developed areas of Somerset
and Middlesex Counties, along the more rapidly growing highway corridors in the
periphery of the region, and at the Hudson County waterfront.
Labor Force
According to figures provided by the New Jersey Star Ledger, unemployment rates
in the state of New Jersey declined during the first six months of 1996,
averaging 6.1%, compared to 6.7% for the first six months in 1995. The state has
regained 200,000 jobs or about 75% of the 262,000 jobs lost during the last
recession.
According to information provided by the Port Authority of New York and New
Jersey, unemployment rates also fell in the urbanized counties of Northern New
Jersey. In Hudson County, the rate of unemployment fell to 9.4% in the first
half of 1995, from 10.0% last year. Passaic County's unemployment rate stood at
8.9% - down from 10.1% at mid-1994. Essex County's rate was 7.9% in the first
six months of 1995, compared to 8.9% in 1994.
Regional unemployment rates in the suburban areas were at or below the national
average the first half of 1995. In the New York suburbs, joblessness eased
consistently throughout the first six months of the year, averaging 4.9%. The
suburban counties of Northern New Jersey averaged 5.3% - also
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all at or below the nation's average rate of unemployment. Somerset County
boasted the region's lowest jobless rate, at 4.0%.
Construction Contracts and Starts
The value of new construction contracts awarded during the year, reported by F.
W. Dodge, is an indicator of the planned construction activity and employment
demand over time, as work is completed on these projects.
During the first six months of 1995, total planned spending on new construction
awards in the New York-New Jersey region rose by 3.8%, compared to a 2.0%
increase in 1994. In inflation-adjusted dollars, actual regional construction
activities remained quite low, totaling $5.3 billion. This amount represented
the lowest level of construction spending since the $4.8 billion recorded in
1977.
In the Northern New Jersey area, total construction spending decreased by 2.6%
during the first half of 1995. Nationally, F. W. Dodge reported a 2.0% decrease
in total construction spending, compared to 1994. In Northern New Jersey, a 1.0%
increase in the first six months of 1995 was recorded in commercial/industrial
construction spending over 1994 levels. Residential construction spending in
Northeastern New Jersey also experienced considerable gains, increasing by 17.8%
in the first half of 1995. Infrastructure construction spending in the region
decreased by 6.0%, compared to a 12% increase in 1994. Gains were recorded in
all parts of the region except infrastructure construction. Nationally,
infrastructure spending increased by 1%, compared with 1994 levels.
Office Market
The New Jersey Star Ledger reports that gradual recovery in office market
conditions continued in much of the Northern and central New Jersey region
during the first half of 1996, with overall vacancy rates falling to their
lowest level since 1987. After three consecutive quarters of increased
occupancy, the overall vacancy rate for the two regions stands at 17.9%, down 2%
from a year ago. But Class A vacancy hit its lowest point in a decade, at 13.4%,
with several sub-markets reporting Class A vacancy below 10%. Approximately 81%
of the 1.5 million square feet of office space absorbed throughout the entire
region was in Class A space. Overall, space came off the market at a rate 14%
higher than in the first six months of 1995.
The Central New Jersey counties of Hunterdon, Mercer, Middlesex, Monmouth,
Somerset, and Union (the subject property's county) reported that the second
quarter 1996 ended with 1 million more square feet of space occupied than at the
beginning of the year. The Central New Jersey market
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had the highest rate of absorption of any market in the New York area. It also
realized the largest lease transaction during the second quarter, when Hoechst
Celanese, a chemical company, expanded by taking another 207,727 square feet of
space at 30 Independence Drive, Warren Township.
The following table illustrates a summary of the Woodbridge/Edison/ Metropark
Office Market for 1995. The data was compiled by JGT Associates and illustrates
that overall vacancy was 22.2%, while Class A office space vacancy was 15.4%.
================================================================================
Table 4-2 Woodbridge/Edison/Metropark Office Market (1995)
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Class A Class B Class C Overall
- ------------------------------------------------------------------------------
Total Space 2,661,944 2,502,967 1,108,970 6,273,881
Available Space 409,296 717,402 268,809 1,395,507
Vacancy Rate 15.4% 28.7% 24.2% 22.2%
Source: JGT Associates
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Figure 4-1 Woodbridge/Edison/Metropark Office Market (1995)
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[THE TABLE ABOVE WAS DEPICTED AS A BAR GRAPH IN THE PRINTED MATERIAL]
[GRAPHIC OMITTED]
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Residential Market
Rising interest rates in 1994 meant higher mortgages rates which, in turn,
depressed regional housing markets in the first six months of 1995. The largest
drop in sales was registered in the fourth quarter of 1994 with the peak of
30-year mortgage rates at 9.1%, according to the National
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Association of Realtors. For the first six months of 1995, total sales in select
residential locations of the region - including Northern New Jersey, Westchester
and Nassau Counties, and the western portion of Suffolk County - were still more
than 10% lower than the comparable period a year ago. However, the rate of
decline has been easing. Residential mortgage rates had moved downward to just
over 7.5% by June, 1995.
International Activity
According to the New Jersey Star Ledger, international trade continued to become
a more important part of New Jersey's economy in 1995, with exports of $18.3
billion, up $1.5 billion from 1994 and $3.9 billion from 1993. Exports grew to
7.1% of the state's gross domestic product, an increase of 0.9% from 1994. Total
jobs related to international trade in New Jersey now number roughly 850,000,
according to the Bureau of Labor Statistics.
According to the New York and New Jersey Port Authority, international
investment activity in the region has quickened. Leading foreign economies with
ties to the region have begun to recover. In addition, the low value of the
dollar has made investment in U.S. assets a bargain. According to information
from the Port Authority of New York and New Jersey, office leasing activity by
foreign tenants totaled 1.2 million square feet in the first half of 1995,
compared to 1.9 million square feet leased in all of 1994. Firms from
Switzerland and the U.K. represented more than half the leasing activity in
1995. German, Japanese, and Canadian firms have also signed leases for
significant amounts of office space in the region.
International investors also purchased office buildings in the region. Purchases
amounted to 1.3 million square feet of space, led by investors from Russia and
Israel.
Office buildings are not the only real estate asset that foreign investors
purchased. Investors from 17 nations own 42 hotels, which comprise 29% of the
total transient room inventory. Investors from Japan, Hong Kong, and the U.K.
made more than half of this total investment.
Major Business and Industry
The relatively low land cost (when compared to Manhattan), quality of living,
and favorable accessibility make the Newark and northern New Jersey region a
popular location for major corporations to establish operations and corporate
headquarters. These offices, as well as other regional installations, are the
major source for lodging demand in the market of the subject property. This
discussion includes a sample of some of these corporate headquarters in the
general vicinity of the subject property.
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Companies with corporate headquarters in New Jersey and north of Newark (in the
Paramus and Woodcliff Lake area) include the Federal Paper Board, A & P, Toys R
Us, TW Services, Hertz, Ingersoll-Rand, and Becton Dickinson. The Interstate 287
southern corridor (including the cities of Parsippany through Basking Ridge)
features many companies with headquarters including BASF, Armco, Warner-Lambert,
Allied Signal, AT&T, and Schering-Plough. Companies with headquarters in the
Wayne and Fairfield area (approximately half-way between the I-287 corridor to
the southwest and the Paramus area to the northeast) include American Cyanamid,
GAF, Union Camp, Grand Union, Noritsu, and Ricoh. Lastly, company headquarters
south of Newark in the general area encompassing Edison to the south through
Clark to the north include Merk, Hanson Industries, Engelhard, Johnson and
Johnson, and Supermarkets General.
Economic and Demographic Data
We have evaluated various economic and demographic statistics to determine
trends in lodging demand. Much of this evaluation has been discussed thus far in
this section of the report. However, we have also included a discussion of the
area's population, retail sales, and personal income below. The source of data
used in this section of analysis is the Complete Economic and Demographic Data
Source published by Woods & Poole Economics, Inc., a well-regarded forecasting
service based in Washington, DC. Using a data base containing more than 300
variables for each county in the nation, Woods & Poole employs a sophisticated
regional model to forecast economic and demographic trends. Historical
statistics are based on census data and information published by the Bureau of
Economic Analysis. Projections are formulated by Woods and Poole. All dollar
amounts have been adjusted for inflation, and thus growth or decline represents
real change in constant dollars.
Population
According to Woods & Poole Economics, Inc., the statewide population increased
at an average annual compounded rate of 0.5% between 1980 and 1995; an identical
growth rate was registered from 1990 to 1995. These figures fall below the
national gains of 1.0% and 1.1% for these respective periods. While population
declined for Union County and the Newark, NJ MSA on an annual compounded basis
by 0.1% between 1980 and 1995, population has expanded on an annual compounded
basis for these two areas by 0.1% and 0.2%, respectively, between 1990 and 1995.
Projections indicate that population increases from 1995 through the year 2000
will closely mirror recent trends, and fall below national gains. Union County
is projected to experience a decline in population with an average
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annual compounded decline of 0.2% during this period, and the MSA is anticipated
to achieve slightly higher increases of 0.1% annually. Forecasts for the state
as a whole are similar to those of the MSA, and indicate an average annual
compounded population increase of 0.4% between 1995 and 2000. The United States
population is anticipated to expand by 0.9% annually through the end of the
decade.
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial hotel demand; this observation also holds true for
the meeting and convention segment if a majority of the meetings are
business-oriented.
Retail Sales
Retail sales levels reflect both population trends and the propensity to spend
money on retail goods. There is no direct correlation between retail sales and
hotel demand; however, retail sales trends tend to gauge the economic health and
vitality of the market. Retail sales growth should cause local businesses to
prosper and make it more likely for new firms to enter the market.
Information from Woods & Poole Economics, Inc. reveals that between 1980 and
1995, retail sales in Union County rose at an inflation-adjusted average annual
compounded rate of 0.5%; the Newark, NJ MSA registered a moderately higher
growth rate during this period of 0.9%. Retail sales levels for the state
slightly surpassed this mark, with an increase of 1.6% annually, and the
national growth rate of 1.9% annually was 1.0% higher than that registered by
the MSA.
From 1990 to 1995, retail sales growth recovered in all of the areas surveyed
except for the state, which illustrates the effect of national trends on the MSA
and County. Average annual compounded growth rates expanded to 0.7% annually in
Union County, 1.2% in the Newark, NJ MSA, and declined to 1.5% in New Jersey.
The national retail sales expanded by 2.5%, annually, between 1990 and 1995.
Countywide retail sales are projected to slow to an average annual compounded
decline of 0.2% between 1995 and 2000, which illustrates the expected
stabilization of the regional economy. The MSA and the state are expected to
maintain higher growth rates of 0.1% and 0.4% annually, respectively, falling
short of the anticipated national gain of 0.9% per year.
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Personal Income
According to the procedures outlined in the National Income and Product
Accounts, personal income is calculated by totaling earned income (wages,
salaries, other labor income, and proprietor's income), non-earned income, and
residence adjustments and subtracting personal contributions to social
insurance. Trends in personal income reflect the spending ability of local
residents.
Woods & Poole Economics, Inc. reports that personal income rose at average
annual compounded rates of 1.5% in Union County and 2.0% in the Newark, NJ MSA
between 1980 and 1995. New Jersey maintained similarly high increases of 2.4%
annually. The 2.3% average annual compounded increase in the United States was
largely similar to those achieved in the subject property's market area.
Once again, the recession and related events caused slower personal income
growth in all areas between 1990 and 1995. During this period, average annual
compounded growth rates were 0.9% in Union County, while the state and the
Newark, NJ MSA achieved growth rates of 1.0%, each respectively, compounded
annually. Between 1990 and 1995, the nation maintained personal income growth of
1.9% annually.
Personal income growth in Union County is projected at an average annual
compounded rate of 0.9% between 1995 and 2000; this anticipated growth suggests
a stabilized economic climate through the remainder of the decade. Increases in
the MSA is projected at 1.4% (higher than the short-term historical level) and a
growth rate of 2.0% for the state (lower than the short-term historical level)
illustrate the projected strength for the greater Newark metropolitan area.
Personal income growth in the United States is anticipated to occur at an
average annual compounded rate of 2.3% from 1995 through the year 2000.
Highway Traffic
The subject property occupies a prominent location adjacent to the Garden State
Parkway. The quantity of highway traffic passing through a market area is a
relevant factor that has a direct impact on transient commercial and leisure
demand and an indirect effect on meeting demand.
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Table 4-3 Traffic Counts
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Garden State Percent
Year Parkway(1) Change
--------------------------------------------------------
1992 174,400 --
1993 184,800 6.0 %
1994 183,600 (0.6)
1995 186,400 1.5
Avg. Annual Comp. Percent Change, 1992 - 1995 2.2 %
(1) At the exit numbered 136 (subject property is at exit 135)
Source: Data Development, New Jersey Department of Transportation
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Between 1992 and 1993, traffic volume increased by 6.0% and then declined by
0.6% in 1994. Traffic volume stabilized in 1995 with a growth rate of 1.5%. This
stabilizing traffic volume may be attributed to the healthy economy of the
surrounding area, which should have a positive impact on the demand for
transient accommodations.
Airport Traffic
Airport passenger counts are important indicators of transient lodging demand.
Depending on the type and location of a particular airfield, a sizable
percentage of arriving passengers may have need for hotel and motel
accommodations. Trends showing changes in passenger counts also reflect local
business activity and the overall economic health of an area.
New York is one of the most important transportation centers in the United
States, and the subject property's proximity to New York City positions it as a
viable lodging alternative to visitors to New York City. There are three major
commercial airports servicing the New York Metropolitan area including: John F.
Kennedy (JFK) International Airport, LaGuardia Airport and Newark International
Airport. Combined, these three airports serviced over 78 million passengers in
1995. Over the past five years, the region has exhibited positive growth in
airport passenger traffic, reflecting an average annual increase of 3.7%.
New York City is a major destination for international business and tourism
travel. International passenger traffic accounted for nearly 30 percent of total
passenger volume into the city in 1995. International traffic has reflected
strong growth over the last several years.
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HVS International, Mineola, New York Market Area Analysis 36
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Development activities at both Kennedy and Newark Airports are expected to boost
airport traffic at both airports. These plans are targeted to make both airports
more accessible to the public and/or expand existing facilities. The JFK
Redevelopment Plan consists of expansion to the existing facilities at Kennedy
Airport. A new terminal is being constructed at the site of the former Eastern
Air Lines facility, in addition to expansion of the existing terminals. Another
major planned development is the construction of a people mover. This would
allow for connection of the airport to mass transit systems such as the Long
Island Railroad and New York City mass transit. Development plans at Newark
International Airport include the construction of a monorail. The monorail is
intended to provide easier transportation between points throughout the airport.
The following tables illustrate the historical passenger volume handled by the
three New York area international airports.
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HVS International, Mineola, New York Market Area Analysis 37
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Table 4-4 Growth at the Three New York Area Airports (Total Arrivals and
Departures)
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Percent Percent Percent
Year JFK Change LaGuardia Change Newark Change
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1968 19,573,628 --- 10,481,999 --- 6,716,584 ---
1969 19,507,694 (0.3)% 11,736,383 12.0 % 7,130,537 6.2 %
1970 19,096,705 (2.1) 11,845,141 0.9 6,460,489 (9.4)
1971 19,310,714 1.1 12,796,002 8.0 6,105,054 (5.5)
1972 20,725,700 7.3 14,234,735 11.2 6,752,395 10.6
1973 31,389,159 51.5 14,027,360 (1.5) 6,835,203 1.2
1974 20,216,436 (35.6) 13,703,028 (2.3) 6,451,857 (5.6)
1975 19,475,761 (3.7) 13,185,753 (3.8) 6,265,797 (2.9)
1976 21,032,973 8.0 14,088,797 6.8 6,752,726 7.8
1977 22,545,497 7.2 15,087,530 7.1 7,303,604 8.2
1978 24,860,753 10.3 17,094,972 13.3 8,469,465 16.0
1979 26,976,675 8.5 18,391,035 7.6 9,296,942 9.8
1980 26,796,066 (0.7) 17,467,962 (5.0) 9,223,260 (0.8)
1981 25,752,719 (3.9) 18,146,191 3.9 10,181,865 10.4
1982 26,452,508 2.7 18,516,891 2.0 11,731,062 15.2
1983 27,904,474 5.5 18,813,397 1.6 17,411,253 48.4
1984 29,934,779 7.3 20,302,511 7.9 23,654,163 35.9
1985 28,945,000 (3.3) 20,542,000 1.2 28,577,000 20.8
1986 27,224,000 (5.9) 22,189,000 8.0 29,433,000 3.0
1987 30,192,000 10.9 24,226,000 9.2 23,475,000 (20.2)
1988 31,166,000 3.2 24,159,000 (0.3) 22,496,000 (4.2)
1989 30,323,000 (2.7) 23,158,000 (4.1) 20,928,000 (7.0)
1990 29,794,000 (1.7) 22,795,000 (1.6) 22,255,000 6.3
1991 26,229,068 (12.0) 19,654,344 (13.8) 22,276,396 0.1
1992 27,767,073 5.9 19,656,145 0.0 24,285,164 9.0
1993 26,796,843 (3.5) 19,804,566 0.8 25,809,413 6.3
1994 28,809,322 7.5 20,730,467 4.7 28,020,482 8.6
1995 30,829,781 7.0 20,599,394 (0.6) 26,626,231 (5.0)
Average Annual Compounded Growth
1968 - 1995 1.7 % 2.5 % 5.2 %
1980 - 1995 0.9 1.1 7.3
1990 - 1995 0.7 (2.0) 3.7
Source: Port Authority of New York and New Jersey - Aviation Department
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Tourist Attractions
Although commercial activity is an important component of the area economy, the
greater New York area is also a major tourism destination. The subject property
will often benefit from tourism related directly to New York City; tour groups
will often utilize greater-Newark area guestroom
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HVS International, Mineola, New York Market Area Analysis 38
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supply due to the cheaper room rates (when compared to New York City) that are
available.
Leisure travel in the subject property's market area is also affected by events
occurring at the Meadowlands Sports Complex. The complex was constructed in 1976
on a 750-acre site for approximately $450 million. The project was entirely
financed by the sale of bonds issued by the New Jersey Sports and Exposition
Authority, at no expense to the taxpayers. Surplus operating revenues from the
complex are turned over to the State of New Jersey General Fund, to which the
complex has contributed more than $60 million to date. The three major
facilities of the complex are Giants Stadium, Brendan Byrne Arena and
Meadowlands Racetrack. The following table illustrates the total attendance
within the Meadowlands Sports Complex. The significant increase in attendees at
Giants Stadium in 1994 represents the World Cup Soccer tournament that was held
that year. Because this is not an annual event, the large average annual
compounded growth at Giants Stadium is not indicative of future trends.
================================================================================
Table 4-5 Meadowlands Sports Complex Annual Attendance
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Brendan Meadowlands Total
Year Giants Stadium Byrne Arena Racetrack Attendance
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1985 2,200,000 2,100,000 2,800,000 7,100,000
1986 1,750,000 2,000,000 2,400,000 6,150,000
1987 1,700,000 2,200,000 2,600,000 6,500,000
1988 2,700,000 2,400,000 2,400,000 7,500,000
1989 2,100,000 2,300,000 2,200,000 6,600,000
1990 2,200,000 2,400,000 2,000,000 6,600,000
1991 2,300,000 2,000,000 2,000,000 6,300,000
1992 2,200,000 1,900,000 2,500,000 6,600,000
1993 2,000,000 1,900,000 2,000,000 5,900,000
1994 3,200,000 2,500,000 1,850,000 7,550,000
1995 1,600,000 2,300,000 1,600,000 5,500,000
Average Annual Compounded Growth
- --------------------------------
1985 - 1995 -3.1 % 0.9 % -5.4 % -2.5
1990 - 1995 -6.2 -0.8 -4.4 -3.6
Source: New Jersey Sports & Exposition Authority
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HVS International, Mineola, New York Market Area Analysis 39
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Woods and Poole Data
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 40
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Table 4-6 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Union County 1980-1995 504.4 495.4 (0.1)%
Newark, NJ MSA 1980-1995 1,962.7 1,935.5 (0.1)
State of New Jersey 1980-1995 7,377.0 7,938.8 0.5
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Union County 1990-1995 493.6 495.4 0.1
Newark, NJ MSA 1990-1995 1,915.9 1,935.5 0.2
State of New Jersey 1990-1995 7,740.1 7,938.8 0.5
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Union County 1995-2000 495.4 490.8 (0.2)
Newark, NJ MSA 1995-2000 1,935.5 1,943.2 0.1
State of New Jersey 1995-2000 7,938.8 8,107.5 0.4
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Union County 1980-1995 3,058.2 3,301.2 0.5
Newark, NJ MSA 1980-1995 11,175.0 12,779.9 0.9
State of New Jersey 1980-1995 45,469.7 57,963.4 1.6
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Union County 1990-1995 3,188.7 3,301.2 0.7
Newark, NJ MSA 1990-1995 12,045.4 12,779.9 1.2
State of New Jersey 1990-1995 53,923.1 57,963.4 1.5
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Union County 1995-2000 3,301.2 3,267.3 (0.2)
Newark, NJ MSA 1995-2000 12,779.9 12,827.5 0.1
State of New Jersey 1995-2000 57,963.4 59,157.0 0.4
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Union County 1980-1995 6,063.3 6,663.9 0.6
Newark, NJ MSA 1980-1995 5,693.5 6,602.8 1.0
State of New Jersey 1980-1995 6,163.7 7,301.3 1.1
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Union County 1990-1995 6,460.1 6,663.9 0.6
Newark, NJ MSA 1990-1995 6,287.1 6,602.8 1.0
State of New Jersey 1990-1995 6,966.8 7,301.3 0.9
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 41
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================================================================================
Table 4-6 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Union County 1995-2000 6,663.9 6,656.7 (0.0)
Newark, NJ MSA 1995-2000 6,602.8 6,601.3 (0.0)
State of New Jersey 1995-2000 7,301.3 7,296.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and
Drinking Place Sales (+000,000)
Union County 1980-1995 265.6 279.2 0.3
Newark, NJ MSA 1980-1995 965.0 1,240.2 1.7
State of New Jersey 1980-1995 3,991.7 5,226.8 1.8
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and
Drinking Place Sales (+000,000)
Union County 1990-1995 270.7 279.2 0.6
Newark, NJ MSA 1990-1995 1,132.5 1,240.2 1.8
State of New Jersey 1990-1995 4,781.7 5,226.8 1.8
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking
Place Sales (+000,000)
Union County 1995-2000 279.2 284.0 0.3
Newark, NJ MSA 1995-2000 1,240.2 1,277.3 0.6
State of New Jersey 1995-2000 5,226.8 5,482.5 1.0
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and
Drinking Place Sales Per Capita
Union County 1980-1995 526.6 563.6 0.5
Newark, NJ MSA 1980-1995 491.6 640.8 1.8
State of New Jersey 1980-1995 541.1 658.4 1.3
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and
Drinking Place Sales Per Capita
Union County 1990-1995 548.3 563.6 0.6
Newark, NJ MSA 1990-1995 591.1 640.8 1.6
State of New Jersey 1990-1995 617.8 658.4 1.3
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking
Place Sales Per Capita
Union County 1995-2000 563.6 578.7 0.5
Newark, NJ MSA 1995-2000 640.8 657.3 0.5
State of New Jersey 1995-2000 658.4 676.2 0.5
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal
Income (+000,000)
Union County 1980-1995 9,190.9 11,496.9 1.5
Newark, NJ MSA 1980-1995 33,086.9 44,463.4 2.0
State of New Jersey 1980-1995 120,336.5 171,425.6 2.4
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 42
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Table 4-6 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal
Income (+000,000)
Union County 1990-1995 11,015.8 11,496.9 0.9
Newark, NJ MSA 1990-1995 42,408.4 44,463.4 1.0
State of New Jersey 1990-1995 162,895.3 171,425.6 1.0
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Union County 1995-2000 11,496.9 12,028.9 0.9
Newark, NJ MSA 1995-2000 44,463.4 47,610.8 1.4
State of New Jersey 1995-2000 171,425.6 188,925.7 2.0
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Union County 1980-1995 18,222.0 23,208.0 1.6
Newark, NJ MSA 1980-1995 16,857.0 22,972.0 2.1
State of New Jersey 1980-1995 16,312.0 21,593.0 1.9
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal
Income per Capita
Union County 1990-1995 22,318.0 23,208.0 0.8
Newark, NJ MSA 1990-1995 22,135.0 22,972.0 0.7
State of New Jersey 1990-1995 21,046.0 21,593.0 0.5
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Union County 1995-2000 23,208.0 24,507.0 1.1
Newark, NJ MSA 1995-2000 22,972.0 24,501.0 1.3
State of New Jersey 1995-2000 21,593.0 23,303.0 1.5
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment
- Union County (+000)
Farm 1980-1995 0.3 0.1 (5.2)
Agriculture Services, Other 1980-1995 1.0 1.4 2.4
Mining 1980-1995 0.3 0.1 (8.5)
Construction 1980-1995 14.0 13.4 (0.3)
Manufacturing 1980-1995 84.9 48.4 (3.7)
Trans., Comm. & Public Utils. 1980-1995 22.5 22.1 (0.1)
Total Trade 1980-1995 62.4 54.5 (0.9)
Wholesale Trade 1980-1995 27.9 20.0 (2.2)
Retail Trade 1980-1995 34.6 34.5 (0.0)
Finance, Insurance, & Real Estate 1980-1995 20.5 22.8 0.7
Services 1980-1995 64.2 89.2 2.2
Total Government 1980-1995 31.0 29.9 (0.2)
Federal Civilian Govt. 1980-1995 2.7 2.6 (0.2)
Federal Military Govt. 1980-1995 1.7 1.3 (1.6)
State & Local Govt. 1980-1995 26.6 26.0 (0.2)
TOTAL 1980-1995 301.2 282.0 (0.4)
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 43
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Table 4-6 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment
- Union County (+000)
Farm 1990-1995 0.1 0.1 (2.4)
Agriculture Services, Other 1990-1995 1.1 1.4 5.7
Mining 1990-1995 0.2 0.1 (17.6)
Construction 1990-1995 13.2 13.4 0.3
Manufacturing 1990-1995 58.2 48.4 (3.6)
Trans., Comm. & Public Utils. 1990-1995 22.0 22.1 0.2
Total Trade 1990-1995 60.2 54.5 (2.0)
Wholesale Trade 1990-1995 23.0 20.0 (2.8)
Retail Trade 1990-1995 37.1 34.5 (1.5)
Finance, Insurance, & Real Estate 1990-1995 25.6 22.8 (2.4)
Services 1990-1995 87.1 89.2 0.5
Total Government 1990-1995 29.4 29.9 0.4
Federal Civilian Govt. 1990-1995 2.7 2.6 (1.2)
Federal Military Govt. 1990-1995 1.5 1.3 (2.3)
State & Local Govt. 1990-1995 25.2 26.0 0.7
TOTAL 1990-1995 297.1 282.0 (1.0)
Projected Employment
- Union County (+000)
Farm 1995-2000 0.1 0.1 (0.8)
Agriculture Services, Other 1995-2000 1.4 1.3 (1.0)
Mining 1995-2000 0.1 0.1 0.5
Construction 1995-2000 13.4 12.7 (1.1)
Manufacturing 1995-2000 48.4 44.2 (1.8)
Trans., Comm. & Public Utils. 1995-2000 22.1 22.0 (0.1)
Total Trade 1995-2000 54.5 50.8 (1.4)
Wholesale Trade 1995-2000 20.0 18.7 (1.3)
Retail Trade 1995-2000 34.5 32.1 (1.4)
Finance, Insurance, & Real Estate 1995-2000 22.8 23.2 0.4
Services 1995-2000 89.2 90.7 0.3
Total Government 1995-2000 29.9 29.7 (0.2)
Federal Civilian Govt. 1995-2000 2.6 2.5 (0.9)
Federal Military Govt. 1995-2000 1.3 1.3 0.2
State & Local Govt. 1995-2000 26.0 25.9 (0.1)
TOTAL 1995-2000 282.0 274.9 (0.5)
</TABLE>
Source: Woods and Poole Economics, Inc.
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Subsequent sections of this economic study and appraisal will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect visitation. This analysis will provide a basis for
forecasting changes in room night demand in the subject property's area.
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HVS International, Mineola, New York Overview of External Forces 44
Affecting the U.S. Lodging Industry
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================================================================================
5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 45
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
<PAGE>
HVS International, Mineola, New York Overview of External Forces 46
Affecting the U.S. Lodging Industry
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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HVS International, Mineola, New York Overview of External Forces 47
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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HVS International, Mineola, New York Overview of External Forces 48
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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HVS International, Mineola, New York Overview of External Forces 49
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $ 91,000 $ 85,000 $ 79,000 $ 80,000 $ 83,000
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Overview of External Forces 50
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 51
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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================================================================================
Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- --------------------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 4.8 2.6 64.7
1995 4.8 2.8 65.5
1996 5.0 3.0 66.0
1997 5.5 3.5 67.0
1998 6.0 4.0 68.0
1999 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates
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HVS International, Mineola, New York Overview of External Forces 53
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that during periods of prosperity, room rates are a good hedge against
inflation; this was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
Hospitality Valuation Services constantly monitors hotel markets in order to
collect information on sales of lodging facilities. This comprehensive database
is known as the Hospitality Market Data Exchange (HMDE). The HMDE includes more
than 90% of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
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HVS International, Mineola, New York Overview of External Forces 54
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forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the average
sales price per room peaked at $75,000. This was more than twice the 1981
average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Air Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by Hospitality Valuation Services. This index tracks
changes in hotel values in 23 major markets and the nation as a whole. It is
developed through an income approach, using market area data provided by Smith
Travel Research and operational and capitalization rate information from
Hospitality Valuation Services, and is indexed to the 1986 U.S.A. value
(1.0000). The following table sets forth the HVI from 1986 to 1995.
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HVS International, Mineola, New York Overview of External Forces 55
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================================================================================
Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: Hospitality Valuation Services
- --------------------------------------------------------------------------------
The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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HVS International, Mineola, New York Overview of External Forces 56
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================================================================================
Table 5-4 Percent Change in the Hotel Valuation Index
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Percent Change
---------------------
'86-'87 '87-'88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: Hospitality Valuation Services
- --------------------------------------------------------------------------------
On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is
<PAGE>
HVS International, Mineola, New York Overview of External Forces 57
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underway, and most hotels have experienced a dramatic rise in profitability.
Conversely, the hotel industry remains cyclical, and there are long-term trends
and risk factors that could have an unfavorable impact on the operating results
and investment potential of lodging facilities. The following list summarizes
the positive and negative factors that are likely to influence the U.S. lodging
industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators
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HVS International, Mineola, New York Overview of External Forces 58
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had during the recent recession was their inability to achieve average
rate gains. Starting in 1994, gains in hotel room rates returned to levels
in excess of inflation, foreshadowing enhanced profitability. In real
dollars, hotel room rates are expected to return to 1988 levels by 1998.
This is a good indication that hotel values will return to record levels
in the next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
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HVS International, Mineola, New York Overview of External Forces 59
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The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results must take into
account at least a portion of any upside created from improved performance,
particularly if the improvement can be readily achieved through management
efficiencies. Capitalization rates based on historical operating income have
fallen during the past several years. Hotel buyers in today's market must be
aggressive in all of their acquisition assumptions. As a result, hotel values in
some parts of the country are approaching the levels registered during the
mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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HVS International, Mineola, New York Lodging Market Supply and Demand 60
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================================================================================
6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 61
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================================================================================
Table 6-1 Historical Room Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 1,225 1,225 1,225 1,225 1,225 1,225 1,225
Annual Guestroom Supply 447,125 447,125 447,125 447,125 447,125 447,125 447,125
Percent Change --- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 277,218 284,372 279,453 278,112 300,915 310,305 302,257
Percent Change --- 2.6% (1.7)% (0.5)% 8.2% 3.1% (2.6)%
Occupancy 62.0% 63.6% 62.5% 62.2% 67.3% 69.4% 67.6%
Percent Change --- 2.6% (1.7)% (0.5)% 8.2% 3.1% (2.6)%
Average Rate $67.89 $65.41 $65.57 $66.77 $67.05 $76.32 $70.08
Percent Change --- (3.7)% 0.2% 1.8% 0.4% 13.8% (8.2)%
RevPAR $42.09 $41.60 $40.98 $41.53 $45.12 $52.97 $47.37
Percent Change --- (1.2)% (1.5)% 1.3% 8.7% 17.4% (10.6)%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Year-to-Date, August
-------------------- Average Annual
Compounded Growth
1995 1996 1989 - 1995
- -------------------------------------------------------------------
Number of Rooms 1,225 1,225
Annual Guestroom Supply 297,675 297,675
Percent Change --- 0.0% 0.0%
Room Night Demand 197,656 209,861
Percent Change --- 6.2% 1.5%
Occupancy 66.4% 70.5%
Percent Change --- 6.2% 1.5%
Average Rate $75.78 $82.42
Percent Change --- 8.8% 0.5%
RevPAR $50.32 $58.11
Percent Change --- 15.5% 2.0%
Source: Smith Travel Research
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Lodging Market Supply and Demand 62
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
The preceding table indicates that the number of primarily competitive
guestrooms included in the Clark-Woodbridge, New Jersey area survey remained
constant at 1,225 from 1989 through 1995. Demand declined by 1.7% in 1991 and
0.5% in 1992; these downturns were the result of the recession which affected
the nation during this period exacerbated, in 1991, by the Persian Gulf War
which caused a downturn in travel throughout the U.S.. The impact of the
recession on the subject market area was compounded by the dynamics of the
regional hotel market and particularly the market in New York City. During the
recession of the early 1990s, New York City's hotels suffered from a lack of
demand, and decreased their rates in order to attract a wider array of business
and thus sustain reasonable occupancy levels. As a result, tour groups and other
area leisure demand, which had previously opted for the lower rates outside the
CBD, were able to attain low enough rates within the city and thus used New York
City hotels. With the recent upswing in the economy, both occupancy levels and
average room rates in New York City have rebounded considerably, and many of
these guests have again been displaced out of the city by higher rated business.
Furthermore, demand in Manhattan is now strong enough to generate overflow to
all of the suburban area markets. The subject property's lodging market is
benefiting from this situation, as the hotels in northern New Jersey offer a
reasonable alternative to the hotels in the city.
Demand recovered in 1993, with an 8.2% increase, as the economy began to
rebound. In 1994, the increase in room night demand was moderate at a level of
3.1%; in 1994 roundly 32,000 more room nights were accommodated in the market
than in 1992. It is important to note that 1994 represents an exceptional year
for the greater New Jersey market; in addition to the strengthening economy, a
number of New York City citywide events were held, such as the World Cup Soccer
matches at Giants Stadium and the Gay Games, which generated a large number of
overflow demand for the subject property's market. As a result of these events,
demand decreased in 1995 by 2.6% to reflect a more typical room night demand
level. As the economy in New Jersey continues to improve and the improved
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HVS International, Mineola, New York Lodging Market Supply and Demand 63
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room product at the subject property has allowed the accommodation more demand
in the competitive set, year-to-date trends through August illustrate a growth
rate of 6.2% in room demand. Demand grew at an average annual compounded rate of
1.5% between 1989 and 1995. Because supply remained stable, changes in occupancy
mirrored the shifts in demand.
The weak demand experienced in 1991, 1992, and 1995 did not allow the hotel
supply to increase average rates at levels above or in tandem with inflationary
levels. Except for 1994 (which was an exceptional year for reasons listed
above), which illustrated 13.8% average rate growth, the competitive hotels
maintained an average annual rate growth of 0.5% during the historical period.
The weakest year was in 1995 (with a decline of 8.2%), a result of a market
adjustment following the atypical year in hotel demand and average rate growth
seen in 1994. Year-to-date trends for 1996 illustrate true economic
strengthening, with an 8.8% increase in average rate over the similar period in
1995. RevPAR rose at an average annual compounded rate of 2.0% between 1989 and
1995, with the strongest increase of 17.4% experienced in 1994. The weakest
RevPAR change was in 1995 (at 10.6%) which illustrates the market correction
after the strong 1994 performance. The increase of 15.5% registered for
year-to-date 1996 suggests improvement in overall market conditions.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in Clark, New
Jersey is generated primarily by the following three market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
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Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 estimated year-end distribution of accommodated
hotel room night demand as follows.
================================================================================
Table 6-2 1996 Estimated Year-end Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 131,000 51% 21,000 50%
Meeting and Group 88,000 34 8,000 19
Leisure 40,000 15 13,000 31
------- --- ------ ---
Total 259,000 100% 42,000 100%
- --------------------------------------------------------------------------------
Commercial demand predominates in the local market, accounting for approximately
51% of the estimated 1996 room night demand. Meeting and group demand followed,
with a 34% share. Leisure rooms contributed the remaining 15% of room night
demand. The subject property's segmentation differed from that of the
competitive market to some degree. Approximately 50% of the Holiday Inn Select's
1996 estimated year-end occupancy is attributable to the commercial segment;
leisure rooms accounted for 31% and the meeting and group segment contributed
the remaining 19%.
Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual business people who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
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Because of the improved room product of the subject property, the Holiday Inn -
Clark is favorably positioned to benefit from the improving New Jersey economic
outlook. As New York City hotel demand continues to improve, the area will also
benefit from increased demand overflow. Additionally, the room products of the
Sheraton and Hilton are tired, and area corporations and groups are reportedly
anxious to try something new.
Area corporate demand is generated by a variety of corporations with offices and
corporate headquarters generally situated within a 10 mile radius of the subject
property. Some of these installations include the following: Merck
Pharmaceuticals, Hanson Industries, Engelhard, Johnson and Johnson, and
Supermarkets General. A number of small industrial plants, high-rise office
buildings, and warehouses which generate commercial demand are also located in
the subject property's immediate area.
Based on our analysis of the Union County economy, together with a review of
national economic trends, we estimate that commercial demand will increase by
4.0% for the first projection year, by 3.5% the following year, by 3.0% the next
year, and at a conservative level of 2.0% per annum throughout the remainder of
our projection period.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
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Area meeting demand is largely generated by local corporations; meetings
typically involve training or company planning. Meeting demand is also generated
by the New Jersey Convention and Expo Center, located near the Crowne Plaza in
the Raritan Center (a secondary competitor of the subject property). Given the
subject property's recent renovation, it is expected that the subject property
will be assigned as a overflow hotel for the Center. Because of its improved
overall product inclusive of the meeting space, the subject property should be
able to capture close to its fair share of the smaller corporate meetings
market.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus growth
in this segment tends to lag slightly behind increases in commercial demand. We
believe that growth in the meeting and group segment will occur at the rate of
3.0% in 1997, at 2.5% in 1998, at 2.0% in 1999, and at 1.0% per annum throughout
the remaining projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations.
The greater Newark area offers a variety of local attractions including the
Meadowlands Sports Complex which was discussed previously in this
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report. Although the subject property houses leisure demand related to these
local attractions, the majority of leisure demand is generated by tourists
visiting New York City. As mentioned previously, with the economy strengthening,
New York City hotels are charging increasingly higher room rates (together with
already present higher lodging taxes); this trend gives hotels situated outside
of Manhattan a competitive sales advantage. These hotels, including the subject
property and its competitors, offer reasonable room rates in comparison to room
rates offered in Manhattan; the resulting room prices are very attractive to
tour groups and other area leisure demand. Leisure demand should therefore
remain strong in the short-term given the current upswing in the economic cycle.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections. Based upon our review of the local area and national
trends, we estimate that leisure demand should increase at a rate of 4% in 1997,
and gradually decline to a 1% growth rate in 2000 and throughout the remaining
projection period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
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================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rate
-----------------------------------------
1997 1998 1999 2000 2001 2002
- -------------------------------------------------------------------------------
Commercial 4.0% 3.5% 3.0% 2.0% 2.0% 2.0%
Meeting and Group 3.0 2.5 2.0 1.0 1.0 1.0
Leisure 4.0 3.0 2.0 1.0 1.0 1.0
Annual Average Growth 3.7% 3.1% 5.1% 1.5% 1.5% 1.5%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand. Please note that the average annual growth rate of
5.1% in 1999 reflects the opening of an assumed proposed hotel. This assumption
is discussed in greater detail later in this section of the report. With the
opening of this hotel, a greater amount of market demand can be accommodated
which currently cannot be, due to limited hotel room supply during peak demand
nights (typically Tuesday and Wednesday nights in this particular market).
Therefore, the growth rate reflects this assumed change in the market.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The New Jersey suburban area is served
by a wide array of hotels and motels. The subject property is situated in the
Woodbridge market area; additional concentrations of lodging facilities are
located in the Secaucus/Meadowlands area, in the vicinity of Newark Airport,
near the major concentrations of office space in the area, and along the
highways which serve as major arteries through the region.
We have identified two properties that are considered primarily competitive with
the Holiday Inn Select. Including the subject property, these primary
competitors total 644 rooms. Two additional lodging facilities are judged to be
only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The room count of each secondary competitor has been weighted to reflect the
degree to which it competes with the Holiday Inn Select; the aggregate weighted
room count of the secondary competitors is 355.
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Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
penetration factors; penetration is the ratio between a specific hotel's
operating results and the corresponding data for the market. If the penetration
factor is greater than 100%, the property is performing better than the market
as a whole; conversely, if the penetration is less than 100%, the hotel is
performing at a level below the marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
Meeting Meeting ----------------------- --------------------------
Year Number Space Space/Room Meeting Average
Property/Location Opened of Rooms (Sq. Ft.) (Sq. Ft.) Comm. & Group Leisure Occupancy Rate Rev PAR
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
36 Valley Road 1973 191 7,493 39 50% 20% 30% 61.0% $55.00 $33.55
Woodbridge Hilton
120 Wood Avenue South 1984 200 16,811 84 60 30 10 77.0 82.00 63.14
Woodbridge Sheraton
515 Route 1 South 1986 253 18,500 73 50 40 10 82.0 86.00 70.52
- --------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 644 14,268 65 53% 32% 15% 74.2% $77.15 $57.26
Secondary Competition 355 45% 38% 17% 59.0% $71.35 $42.10
Totals/Averages 999 51% 34% 15% 68.7% $75.39 $51.78
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Estimated 1996
-------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate Rev PAR Penetration Penetration
- --------------------------------------------------------------------------------
Subject Property
36 Valley Road 60.0% $76.00 $45.60 84.5% 79.3%
Woodbridge Hilton
120 Wood Avenue South 79.0 89.00 70.31 111.3 122.3
Woodbridge Sheraton
515 Route 1 South 84.0 88.00 73.92 118.4 128.6
- --------------------------------------------------------------------------------
Sub-Totals and Averages 75.3% $85.49 $64.40 106.1% 112.0%
Secondary Competition 63.0% $71.28 $44.90 88.8% 78.1%
Totals/Averages 71.0% $81.00 $57.49 100.0% 100.0%
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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HVS International, Mineola, New York Lodging Market Supply and Demand 71
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Our survey of the primarily competitive market shows a representation of
nationally-recognized, franchised lodging chains. The hotels range in size from
191 to 253 rooms and in age from 10 to 23 years. The market demand has a strong
corporate orientation, which results in commercial representing the majority of
the demand in the market. In addition, several properties enjoy considerable
meeting and group business. As a result of its proximity to the New York City
area, this market is able to capture some leisure business as well.
For estimated year-end 1996, the primary competitors achieved an overall
occupancy of 75.3% at an average rate of $85.49, yielding RevPAR of $64.40. The
Woodbridge Sheraton is forecast to maintain the highest occupancy in 1996, at
84%, which equates to an occupancy penetration of 118.4%. This strong
performance is due to this hotel's quantity of meeting space (the most in the
market at 18,500 square feet), which allows the property to maximize its
occupancy given its secondary corporate location. The Woodbridge Hilton follows
with an occupancy of 79% and an occupancy penetration rate of 111.3%.
In both 1995 and 1996, the subject property has achieved the lowest occupancy
and average rate among the primary competitors. This poor performance, which is
effectively measured by the occupancy and yield penetration rates of 84.5% and
79.3%, respectively, is a result of the hotel's historically poor image in the
local market. In large part, this image is attributable to the inferior
condition of the physical facilities prior to the completion of the recent
renovation.
The completion of the recent renovation, together with an effective marketing
effort, should enable the subject property to achieve an improved competitive
position within the market area. However, with 7,493 total square feet and its
largest room just over 2,000 square feet, the property meeting space inventory
is low by market standards. This will hinder the property's ability to compete
in the meeting and group segment; the competitive properties illustrated in the
previous table feature over twice the available space of the subject property.
Furthermore, the subject property has a tertiary location in respect to local
demand generators when compared to the primary competition. Therefore, its
location and meeting capacity are expected to hinder its ability to reach a 100%
RevPAR penetration level in the future.
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Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Woodbridge Hilton
The Hilton is a 10-story, full-service, first-class lodging facility which
opened in 1984. The property is managed by the Hemisphere Management Company
under a license agreement with Hilton Hotels. The Hilton features 200
guestrooms, 3 restaurants (Spats for American food, Romulus for Northern Italian
cuisine, and Le Cafe Metro for casual fare), 2 cocktail lounges, and 16,811
square feet of meeting space in 14 meeting rooms. The meeting and banquet space
includes the Metropolitan Ballroom (3,600 square feet) which can accommodate up
to 400 for a reception and 300 for a banquet. Additional facilities include an
indoor swimming pool, a health club with hot tub, business center, and gift
shop. Guestrooms feature hair dryers, telephones with voice mail, work stations
with personal computer jacks, on-command movies, and express check-out.
The high average rate achieved at the Hilton is evidence of its superior
position in the market; the property has the premier location in the area,
within the Metro Park corporate complex located south of the subject property.
The Hilton also features a superior level of construction and array of
facilities and amenities than the subject property, although the product is
nevertheless in need of a renovation. These factors allow the property to
attract considerable patronage primarily from the transient and commercial and
the meeting and group segments. The Hilton currently derives approximately 60%
of its occupancy from the commercial segment, 30% from the meeting and group
segment, 10% from the leisure segment. The hotel enjoys the second highest
occupancy and yield penetration in the market; 1996 estimated year-end occupancy
penetration is 111.3%, while yield is projected to be 122.3%.
Woodbridge Sheraton
The Sheraton is a multi-story, full-service, first-class lodging facility which
opened in 1986. The property is owned by Woodbridge Place Associates and managed
by Inn of America under a Sheraton franchise affiliation. In addition to the
Sheraton's 253 guestrooms, the hotel features three restaurants (Prestos for
casual fare, the American Grill Steakhouse and Pub for American cuisine, and
Allen's for Italian fine dining), one cocktail lounge, and approximately 18,500
square feet of meeting space in 15 meeting rooms of varying configurations. The
meeting and banquet space includes the Grand Ballroom (6,800 square feet) which
can accommodate up to 900 for a reception and 600 for a banquet. Additional
facilities include a business center, an indoor swimming pool, a Jacuzzi, a
health club, a gift shop, and a
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HVS International, Mineola, New York Lodging Market Supply and Demand 73
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florist. Guestrooms feature coffee makers, two telephones with dataport computer
access, hairdryers, On Command video, irons and ironing boards; two floors of
Club Level Rooms feature bathrobes and spring water.
This property is the meeting and group leader in the market, primarily as a
function of its meeting space capacity. Also, its high quality physical plant
and proximity to the Metro Center allow the property to penetrate the market at
a level superior to the subject property. The Sheraton currently derives
approximately 50% of its occupancy from the commercial segment, 40% from the
meeting and group segment, and 10% from the leisure segment. The hotel enjoys
the highest occupancy and yield penetration in the market; 1996 estimated
year-end occupancy penetration is 118.4%, while yield is projected to be 128.6%.
Secondary Competitors
Secondary competitors of the subject property comprise two full-service hotels:
the Holiday Inn Springfield and the Crowne Plaza Edison. The Holiday Inn
Springfield is located along the Route 22 corridor northwest of the subject
property. The Crowne Plaza is located south of the subject property in the
Raritan Center in Edison, New Jersey. Due to their distance from the subject
property and differences in market segmentation, these properties are considered
75% competitive with the primary competitors.
The Holiday Inn Springfield is a full-service property, located along the Route
22 corridor. This property features 199 rooms and roundly 6,000 square feet of
meeting space. The property is in the process of undergoing a major renovation
which includes all case and soft goods including new carpet throughout. The
property is owned and managed by the Holly Hill Corporation and operates under a
Holiday Inn franchise. The property's demand is commercial in nature;
approximately 75% of its demand is derived from this segment. Of this 75% of
demand, 30% is construction related from development along the Route 22
corridor. The remaining 25% of overall demand is 20% leisure and 5% meeting and
group. The Holiday Inn is expecting to increase occupancy by 5% this year for a
projected year-end occupancy of 59% in 1996, while average rate remains stable
at roundly $64. Increases in average rate were constrained due to the low-rated
construction business accommodated by the property.
The Crowne Plaza - Edison is also full-service property, located in the heart of
the Raritan Center Industrial Park. This property features 274 rooms and roundly
3,900 square feet of meeting space. The property underwent a renovation in 1995
which included all case and soft goods. Guestroom
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wallpaper is scheduled for replacement in 1997. The property is owned by a
Prudential and HEI joint venture and is managed by HEI; the property operates
under a Crown Plaza franchise. Due to the hotel's location in an industrial park
(with little commercial segment hotel demand generated from its tenants) and its
proximate location to the New Jersey Convention and Expo Center, the property's
demand is meeting and group in nature. Approximately 60% of its demand is
derived from this segment, while the remaining 40% of demand comprises 25%
commercial and 15% leisure. Management expects year-end occupancy to be
approximately 66% (4% over 1995 occupancy) and average rate to remain stable at
roundly $76. Increases in average rate were not experienced in 1996 due to an
increased accommodation of lower-rated tour and travel business during the
typically weaker demand days of the week.
The following table illustrates the operating statistics of the two secondary
competitors.
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Table 6-5 Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
----------------------- ---------------------------------
Number of Percentage Weighted Mtg. & Average
Property Rooms Competitive Rm. Count Comm. Conv. Leisure Occupancy Rate Rev PAR
- ---------------------------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Holiday Inn - Springfield 199 75% 149.25 75% 5% 20% 54% $64.00 $34.56
Crowne Plaza - Edison 274 75 205.5 25 60 15 62 76.00 47.12
- ---------------------------------------------------------------------------------------- ---------------------------------
Totals/Averages 473 354.75 45% 38% 17% 59% $71.35 $42.10
- ---------------------------------------------------------------------------------------- ---------------------------------
</TABLE>
Estimated 1996
-------------------------------
Average
Property Occupancy Rate Rev PAR
- -----------------------------------------------------------
Holiday Inn - Springfield 59% $64.00 $37.76
Crowne Plaza - Edison 66 76.00 50.16
- -----------------------------------------------------------
Totals/Averages 63% $71.28 $44.90
- -----------------------------------------------------------
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Proposed Competitors
Based on our fieldwork in the market and our discussions with local hotel
operators, developers, and government officials, there appear to be no
properties proposed or under construction that are likely to compete with the
Holiday Inn - Clark. However, it should be noted that the competitive market
registers a healthy occupancy of roundly 71% for estimated year-end 1996. Our
experience indicates that once markets surpass occupancies of 70%, there is
often some demand that cannot be accommodated by the existing hotels. Moreover,
investors and developers rapidly become interested in such strong markets,
particularly when the area is characterized by a degree of economic growth, thus
increasing the likelihood of new construction. In light of these factors and in
recognition of the cyclical nature of the lodging industry, we assume that a
125-room, limited-service hotel (such as a Courtyard, Wingate Inn or
Ameri-Suites) will enter the local lodging supply in January of 1999.
It is also important to note that many limited-service hotels are outperforming
their full-service counterparts, and as a result of the lower cost of
operations, they often achieve higher yields. The selection of the January, 1999
opening date takes into account the relatively short time frame required to
construct a limited-service hotel. As the national economy improves and hotel
financing becomes more readily available, the development process can be further
hastened.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market has shown signs of recovery from 1992 onwards, corresponding to
the economic recovery nationwide. According to Smith Travel Research, these
growth patterns have continued through August of 1996. While supply has remained
constant over recent years, growth in demand has driven occupancy upwards,
allowing the hotels in the market to follow with average rate increases.
Based on our review of the local area, three market segments were defined within
the subject property's lodging market. Growth rates for each market segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period.
We have identified two properties that are considered competitive with the
subject hotel. The subject property is under-performing in the market and is not
attaining its fair share in terms of occupancy, average rate, and
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RevPAR. The completion of the recent renovations is expected to enable the
property to achieve an improved competitive position, although the property's
tertiary location and limited meeting space will likely limit the hotel's
success, particularly in the meeting and group segment of the market.
<PAGE>
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7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section.
As noted earlier, the Holiday Inn - Clark was sold in August of 1995. As a
result of the recent change in ownership and management, many of the historical
records are not available. We were provided with the operating history for the
last four months of 1995 and the first eight months of 1996, but we are unable
to comment on the hotel's performance prior to that time.
During the first eight months of 1996, the subject property achieved an
occupancy of 52.7%, and an average rate of $75.94. When compared to trends
illustrated by the market (as compiled by Smith Travel Research), these
operating statistics equated to an occupancy penetration of 74.8% and an average
rate penetration of 91.0%. This equated to a yield penetration of 68%.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
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The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
================================================================================
Table 7-1 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 131,000 51% 21,000 50%
Meeting and Group 88,000 34 8,000 19
Leisure 40,000 15 13,000 31
------- --- ------ ---
Total 259,000 100% 42,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand.
Unaccommodated Demand
Unaccommodated demand refers to individuals who are unable to secure
accommodations in the market because all of the local hotels are filled. These
travelers must defer their trips, settle for less desirable accommodations, or
stay in properties located outside the market area. Because this demand did not
yield occupied room nights, it is not included in the estimate of historical
accommodated room night demand.
Currently, the subject property and its competitors generally fill during the
mid-week (Monday through Wednesday nights). This trend suggests unaccommodated
demand during these days of the week. Furthermore, as mentioned previously, it
should be noted that the competitive market is expected to register a healthy
occupancy of roundly 71.0% by year-end 1996. Our experience indicates that once
markets surpass occupancies of 70%, there is often some demand that cannot be
accommodated by the existing hotels. In this analysis, we estimate that
approximately 5.0% of commercial demand is unaccommodated in this market.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 80
Average Rate
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Table 7-2 1996 Accommodated and Unaccommodated Demand
- --------------------------------------------------------------------------------
Accommodated
Room Night Unaccommodated Unaccommodated
Market Segment Demand Demand Percentage Room Night Demand
- --------------------------------------------------------------------------------
Commercial 131,000 5.0% 6,540
Meeting and Group 88,000 0.0 0
Leisure 40,000 0.0 0
------- -----
Total 259,000 6,540
- --------------------------------------------------------------------------------
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
The following table shows the projected annual change in accommodated and usable
room night demand in the subject property's competitive market. The
unaccommodated demand will be able to be accommodated when the hypothetical
proposed property enters the market in 1999.
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Average Rate
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Table 7-3 Total Usable Room Night Demand
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate ----- 4.0% 3.5% 3.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 130,798 136,030 140,791 145,015 147,915 150,873 153,890 156,968
Usable Latent ----- 0 0 7,251 7,396 7,544 7,695 7,849
Meeting and Group
Growth Rate ----- 3.0% 2.5% 2.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 88,012 90,652 92,918 94,776 95,724 96,681 97,648 98,624
Usable Latent ----- 0 0 0 0 0 0 0
Leisure
Growth Rate ----- 4.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 39,931 41,528 42,774 43,629 44,065 44,506 44,951 45,401
Usable Latent ----- 0 0 0 0 0 0 0
Airline
Growth Rate ----- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Accommodated Demand 0 0 0 0 0 0 0 0
Usable Latent ----- 0 0 0 0 0 0 0
Totals
Commercial 130,798 136,030 140,791 152,266 155,311 158,417 161,585 164,817
Meeting and Group 88,012 90,652 92,918 94,776 95,724 96,681 97,648 98,624
Leisure 39,931 41,528 42,774 43,629 44,065 44,506 44,951 45,401
Airline 0 0 0 0 0 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
TOTAL DEMAND 258,741 268,210 276,483 290,671 295,100 299,604 304,184 308,842
Annual Forecasted Growth 3.7% 3.1% 5.1% 1.5% 1.5% 1.5% 1.5%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 82
Average Rate
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Guestroom Supply
In 1996, the competitive properties provided a weighted total of 999 guestrooms.
Based on our research and discussions with local planning officials, there are
no new hotels proposed or under construction in the area. However, as a result
of the market's relatively high occupancy, we assume that a 125-room,
limited-service hotel will open on January 1, 1999. This new property is
projected to add 45,625 rooms to the guestroom supply in 1999. The following
table shows the projected competitive supply of available rooms and available
room nights. To calculate the annual number of available room nights, the number
of available rooms is multiplied by 365.
================================================================================
Table 7-4 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------------------------
Historical 258,741 364,544 71%
1997 268,210 364,544 74
1998 276,483 364,544 76
1999 290,671 410,169 71
2000 295,100 410,169 72
2001 299,604 410,169 73
2002 304,184 410,169 74
2003 308,842 410,169 75
- --------------------------------------------------------------------------------
Overall
Competitive
Occupancy
In developing our forecasts, we have attempted to mirror long-term cyclical
patterns in the lodging industry. The previous table illustrates that the
overall competitive occupancy is expected to reach 76% by 1998. Following the
assumed opening of the 125-room, limited-service hotel in January of 1999, this
level is expected to decline to 71% in 1999 and grow to 72% in 2000. The overall
competitive occupancy is projected to recover after 2000, reaching a level of
75% in 2003.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate
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each property's position in the market based on its ability to compete with
other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market range from 103 to 173. The Woodbridge Hilton is the most competitive
property in the commercial market in 1996, with an index of 173, followed by the
Woodbridge Sheraton (at 153). The subject property's commercial segment index of
110 is higher than the aggregate index of the secondary competitors (at 103).
As a result of the recent renovation and the continued repositioning of the
subject property, we expect the subject property to penetrate the commercial
market more effectively. To reflect the more focused management strategy and
improved facilities, the subject property's commercial segment competitive index
is projected to increase to 130 in 1997, 140 in 1998, and 145 in 1999 and remain
at this level in subsequent years. This stabilized level is lower than that of
the Woodbridge Hilton and Sheraton; these properties are expected to remain the
leaders in this particular segment (until the opening of the proposed hotel) due
to their respective locations in or near the Metro Center and their superior
product quality.
The new limited-service hotel is expected to attain a stabilized commercial
segment index of 200 in 2001, which is the highest in the market. This
commercial market strength is attributed to two major factors: the newness of
the hotel will allow the hotel to offer the highest quality product in the
market, and the proposed hotel's assumed lack of meeting space will result in a
strengthened commercial market orientation. The following table shows the
projected commercial segment competitive indexes of the area's hotels.
================================================================================
Table 7-5 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 110 130 140 145 145 145
Woodbridge Hilton 173 173 173 173 173 173
Woodbridge Sheraton 153 153 153 153 153 153
Secondary 103 103 103 103 103 103
Proposed Hotel --- --- --- 190 195 200
- --------------------------------------------------------------------------------
Meeting and Group Segment
As a result of their relatively large inventory of function space (at 16,811
square feet and 18,500 square feet, respectively) the Woodbridge Hilton and the
Woodbridge Sheraton are the most competitive properties in this
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segment. When comparing both the Sheraton and the Hilton, the Sheraton has the
most meeting space in the market and has a secondary commercial location (when
compared to the Hilton); therefore, the Sheraton is more competitive in this
market than the Hilton. Again as a result of the renovation that took place in
1995, the subject property's meeting and group competitive index is expected to
increase to 60 in 1997, 65 in 1998, and 70 in 1999. Because the subject property
lacks the amount of meeting space offered by its primary competitors (the
subject property also lacks the accompanying space functionality), the subject
property will not maintain a strong competitive position in this segment.
The proposed hotel is expected to achieve a stabilized index of 50 in this
segment, which is below the subject property; because the proposed property is
limited-service in nature, it is not expected to be very competitive in this
segment. No other changes are anticipated.
================================================================================
Table 7-6 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 44 60 65 70 70 70
Woodbridge Hilton 87 87 87 87 87 87
Woodbridge Sheraton 123 123 123 123 123 123
Secondary 88 88 88 88 88 88
Proposed Hotel --- --- --- 40 45 50
- --------------------------------------------------------------------------------
Leisure Segment
We anticipate the subject property's leisure segment competitive index to
decline to 60 in 1997, and to 55 in 1998, as leisure demand is displaced due to
a greater amount of accommodated commercial and meeting and group demand at the
subject. The proposed hotel is expected to reach a stabilized index of 50 in
this segment, which would position this hotel just below the competitive level
of the subject property in the leisure segment. This leisure segment index is
considered appropriate given the limited-service nature of the proposed hotel;
the lack of meeting space inherent in most limited-service hotel designs
typically leads to more marketing efforts towards the leisure traveler and less
efforts towards meeting and group traveler. No other changes are expected in
this segment. The following table illustrates the competitive indexes in the
leisure segment.
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Average Rate
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Table 7-7 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Subject Property 66 60 55 55 55 55
Woodbridge Hilton 29 29 29 29 29 29
Woodbridge Sheraton 31 31 31 31 31 31
Secondary 39 39 39 39 39 39
Proposed Hotel --- --- --- 40 45 50
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
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Table 7-8 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------------------------------------------------
Commercial
Demand 136,030 140,791 152,266 155,311 158,417
Market Share 0.1844 0.1958 0.1717 0.1710 0.1704
Capture 25,079 27,563 26,145 26,565 26,992
Meeting and Group
Demand 90,652 92,918 94,776 95,724 96,681
Market Share 0.1257 0.1347 0.1363 0.1354 0.1346
Capture 11,392 12,518 12,916 12,963 13,010
Leisure
Demand 41,528 42,774 43,629 44,065 44,506
Market Share 0.2943 0.2766 0.2444 0.2409 0.2375
Capture 12,222 11,830 10,663 10,615 10,570
------- ------- ------- ------- -------
Total Capture 48,693 51,911 49,724 50,143 50,572
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 191 x 365) produces the
projected occupancy percentage.
================================================================================
Table 7-9 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------------------------------------------------
Total Room Nights
Captured/Year 48,693 51,911 49,724 50,143 50,572
Available Room Nights 69,715 69,715 69,715 69,715 69,715
Occupancy 69.85% 74.46% 71.32% 71.93% 72.54%
Rounded 70% 74% 71% 72% 73%
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
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Table 7-10 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
------------------------------------
1997 70%
1998 74
1999 71
Stabilized 72
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 73% occupancy in 2001, we have chosen to use a stabilized level of 72%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Competitive Positioning
The Holiday Inn Select's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 88
Average Rate
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Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the 1996 average rate and RevPAR of the subject
property and its competitors.
================================================================================
Table 7-11 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
- --------------------------------------------------------------------------------
Subject Property $76.00 $45.60
Woodbridge Hilton 89.00 70.31
Woodbridge Sheraton 88.00 73.92
------ ------
Average $85.49 $64.40
- --------------------------------------------------------------------------------
The Woodbridge Hilton maintains the highest average rate in 1996 (projected at
$89 for 1996 year-end), closely followed by the Woodbridge Sheraton (at $88).
The subject property trails with a projected 1996 year-end rate of $76. This
discounted rate is largely due to the historically poor positioning of the
hotel. While the subject property has made great strides in average rate growth
since the renovation, management has had to employ some rate discounting in
order to become newly re-established in the local commercial market. As the
visibility of the current hotel product improves in 1997, the hotel should be
able to maintain average rate growth slightly in excess of the market during the
short-term.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
<PAGE>
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o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Our forecast of the subject property's average rate recognizes the recent
renovation, which has enhanced the hotel's ability to compete with other local
lodging facilities. We have also taken into account the re-positioning of the
hotel's marketing efforts. Marketwide average rates rose by 13.8% in 1994,
declined by 8.2% in 1995 (this adjustment was to reflect a more realistic
average rate level after extraordinary growth 1994), and recovered with an 8.8%
growth rate for year-to-date 1996 (according to Smith Travel Research). In
consideration of these trends, as well as the improving market image of the
property and market re-positioning, we believe it is reasonable to expect the
Holiday Inn Select's average rate to increase by 7.0% in 1997. In the second
projection year, while demand remains strong and supply remains constant, we
expect an increase of 5.0% in average rate. From the third projection year
onward, average rate gains are expected to stabilize at the underlying inflation
rate of 3.5% annually. Based on these considerations, the following table shows
our projection of average rate increases.
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HVS International, Mineola, New York Projection of Occupancy and 90
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Table 7-12 Average Rate Forecast
- --------------------------------------------------------------------------------
Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
- -------------------------------------------------------------------------------
Positioned Base --- --- --- $76.00
1997 74% 4% to 6% 7.0% 81.34
1998 76 4 to 6 5.0 85.40
1999 71 3 to 4 3.5 88.39
Stabilized 72 3 to 4 3.5 91.48
- --------------------------------------------------------------------------------
The following average rates will be used to project the subject property's rooms
revenue.
================================================================================
Table 7-13 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
-------------------------------------------------------------------
1997 70% $81.34
1998 74 $85.40
1999 71 $88.39
Stabilized 72 $91.48
- --------------------------------------------------------------------------------
<PAGE>
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8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be as a transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 93
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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HVS International, Mineola, New York Approaches to Value 94
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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================================================================================
10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
4. Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
5. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Holiday Inn Select is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The following table presents the Holiday Inn Select's
unaudited income and expense statement from January through August, 1996. As a
result of a recent change in the hotel's ownership and management, prior
statements are not available. Where applicable, we have reorganized the
statements in accordance with the Uniform System of Accounts for Hotels.
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Table 10-1 Historical Operating Performance
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Partial Year Ending August: 1996
Total Rooms: 191
Occupied Rooms: 21,356
Complimentary Rooms: 871
Days Open: 212
Occupancy: 52.7% Amount per Amount per
Average Rate: $75.94 Percentage Available Occupied
(+000) of Revenue Room Room
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REVENUE
Rooms $1,622 71.5% $8,491 $75.94
Food 385 16.9 2,014 18.01
Beverage 160 7.0 835 7.47
Telephone 73 3.2 382 3.42
Net Other Income 31 1.3 160 17.22
Total 2,269 99.9 11,882 106.27
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DEPARTMENTAL EXPENSES
Rooms 368 22.7 1,926 17.22
Food & Beverage 575 105.6 3,009 26.91
Telephone 40 55.5 212 1.90
Total 983 43.3 5,147 46.03
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DEPARTMENTAL INCOME 1,286 56.6 6,735 60.24
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OPERATING EXPENSES
Administrative & General 311 13.7 1,628 14.56
Management Fee 63 2.8 330 2.96
Marketing 193 8.5 1,010 9.04
Franchise Fees 52 2.3 270 2.42
Property Oper. & Maint. 185 8.1 967 8.65
Energy 165 7.3 864 7.73
Total 969 42.7 5,071 45.35
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HOUSE PROFIT 318 13.9 1,664 14.89
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FIXED EXPENSES
Property Taxes 176 7.8 921 8.24
Insurance 27 1.2 139 1.24
Reserve for Replacement 84 3.7 441 3.94
Total 287 12.7 1,501 13.42
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NET INCOME $31 1.2 163 $1.47
================================================================================
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Several changes are expected by management that will improve the operating
efficiency of the hotel; hence, this partial year statement does not adequately
represent the operating potential of the hotel. Our adjustments are
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based on comparable operating statements as well as the 1997 operating budget
for the subject property.
The most significant revenue adjustments include the expected improvements in
the food and beverage department. We expect the banquet department to increase
its sales with improved marketability and an establishment in the market.
Furthermore, we expect the restaurant and bar to increase revenues to be more in
line with comparable operations. Increases reflected in net other income stem
largely from the operating budget for the subject property.
We expect departmental expenses in the food and beverage department to be
brought in line with industry averages and comparable operations. We have made a
considerable downward adjustment to account for this expected efficiency. Added
efficiency will also result from increased volume in restaurant, bar, and
banquet activity.
Significant adjustments in the administrative and general, marketing, property
operations and maintenance, and energy operating expense categories were made.
Again, these were made based on comparable operations, current franchise and
marketing agreements, and the 1997 operating budget of the subject property.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a
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percentage of departmental and total revenue, amounts per available room, and
amounts per occupied room. The income and expense ratios reflect an occupancy
level of 72.0%. The base-year profit and loss statement will be used to
determine the relationship between the fixed and variable components.
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Table 10-3 Base-Year Statement of Income and Expense
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Forecasted Year Ending: 1996
Number of Rooms: 191
Occupancy: 72.0%
Average Rate: $75.94 Percent of Amount per Amount per
Occupied Rooms: 50,195 Total Available Occupied
(+000) Revenue Room Room
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Revenue:
Rooms $3,812 59.9% $19,956 $75.94
Food 1,807 28.4 9,461 36.00
Beverage 452 7.1 2,365 9.00
Telephone 176 2.8 920 3.50
Net Other Income 114 1.8 599 2.28
Total Revenue $6,360 100.0 $33,301 $126.72
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Expenses:
Rooms* $915 24.0% $4,790 $18.23
Food & Beverage* 1,852 82.0 9,697 36.90
Telephone* 97 55.0 506 1.93
Administrative & General 668 10.5 3,497 13.31
Management Fee 191 3.0 999 3.80
Marketing 350 5.5 1,832 6.97
Franchise Fees 191 3.0 998 3.80
Property Oper. & Maint. 210 3.3 1,100 4.19
Energy 277 4.4 1,450 5.52
Property Taxes 244 3.8 1,277 4.86
Insurance 67 1.1 350 1.33
Reserve for Replacement 254 4.0 1,332 5.07
Total Expenses $5,315 83.6% $27,826 $105.88
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Net Income $1,046 16.4% $5,475 $20.83
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
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Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-4 Inflation Estimates
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Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
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Averages 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
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The preceding table shows inflation forecasts averaging 3.0% through November,
1996 and 2.9% through May, 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5%.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
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Increase From
Year Previous Year
----------------------------------------------------------
1997 ---
1998 5.0%
1999 3.5
2000 3.5
Thereafter 3.5
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The remaining exception to this assumption is the property tax increases during
the first two years of projections. As summarized earlier in this report, these
increases are forecast to be 1% in 1997, 2% in 1998, and 3.5% thereafter.
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
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Table 10-6 Projected Occupancy and Average Rate
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1997 1998 1999 Stabilized
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Forecast Occupancy Percentage 70.0% 74.0% 71.0% 72.0%
Forecast Average Rate $81.34 $85.40 $88.39 $91.48
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Rooms revenue is calculated as follows.
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Table 10-7 Forecast of Rooms Revenue
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Number of Rooms
Calendar Years Projected Average Number Days in Revenue
Ending: Occupancy Room Rate of Units in Year (+000)
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1997 70.0 X $81.34 X 191 X 365 = $3,969
1998 74.0 X 85.40 X 191 X 365 = 4,406
1999 71.0 X 88.39 X 191 X 365 = 4,375
Stabilized 72.0 X 91.48 X 191 X 365 = 4,592
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Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue.
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Although food revenue varies directly with changes in occupancy, the small
portion generated by banquet sales and outside capture is relatively fixed.
Food revenue was projected based on this relationship between the fixed and
variable components. The following table shows the projected food revenue and
several units of comparison that can be used to check the reasonableness of the
forecast.
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Table 10-8 Forecast of Food Revenue
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1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Food Revenue (+000) $ 1,831 $ 1,976 $ 1,983 $ 2,074
Percent of Total Revenue 28.0% 27.5% 27.6% 27.6%
Per Available Room $ 9,589 $ 10,347 $ 10,381 $ 10,858
Per Occupied Room $ 37.52 $ 38.30 $ 40.06 $ 41.32
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage Revenue
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges.
Based on an analysis of comparable lodging facilities, beverage revenue is
estimated to average approximately 25% of food revenue. Thus, beverage revenue
is projected by multiplying the projected food revenue by 25%. The following
table illustrates the forecast of beverage revenue.
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Table 10-9 Forecast of Beverage Revenue
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1997 1998 1999 Stabilized
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Total Beverage Revenue (+000) $ 458 $ 494 $ 496 $ 519
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Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable
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telephone departments. State-of-the-art equipment is capable of least-cost
routing, automatic price billing, and posting telephone charges to guest folios.
Hotels can select among various long-distance services, and can also work with
any one of a number of Alternative Operator Services (AOS). These systems route
and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-10 Forecast of Telephone Revenue
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1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Revenue (+000) $ 177 $ 193 $ 192 $ 202
Percent of Total Revenue 2.7% 2.7% 2.7% 2.7%
Amount Per Available Room $ 928 $ 1,010 $ 1,007 $ 1,056
Amount Per Occupied Room $ 3.63 $ 3.74 $ 3.88 $ 4.02
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Net Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
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o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-11 Forecast of Net Other Income
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Net Other Income (+000) $ 117 $ 124 $ 126 $ 131
Percent of Total Revenue 1.8% 1.7% 1.8% 1.7%
Amount Per Available Room $ 615 $ 647 $ 661 $ 687
Amount Per Occupied Room $ 2.40 $ 2.40 $ 2.55 $ 2.61
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
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Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-12 Forecast of Rooms Expense
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1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Rooms Expense (+000) $ 936 $ 991 $ 1,009 $ 1,050
Percent of Rooms Revenue 23.6% 22.5% 23.1% 22.9%
Amount per Available Room $ 4,903 $ 5,188 $ 5,281 $ 5,497
Amount per Occupied Room $ 19.18 $ 19.21 $ 20.38 $ 20.92
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. After considering the fixed and variable components, we
forecast the subject property's food and beverage expense as follows.
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Table 10-13 Forecast of Food and Beverage Expense
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1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total F&B Expense (+000) $ 1,899 $ 2,003 $ 2,044 $ 2,126
Percent of Food and Beverage Revenue 83.0% 81.1% 82.5% 82.0%
Amount per Available Room $ 9,943 $10,486 $10,703 $11,130
Amount per Occupied Room $ 38.91 $ 38.83 $ 41.29 $ 42.35
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-14 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Expense (+000) $ 99 $ 105 $ 107 $ 111
Percent of Telephone Revenue 55.9% 54.2% 55.5% 54.9%
Amount per Available Room $ 518 $ 547 $ 558 $ 581
Amount per Occupied Room $ 2.03 $ 2.04 $ 2.16 $ 2.21
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
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HVS International, Mineola, New York Income Capitalization Approach 112
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In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
================================================================================
Table 10-15 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Administrative
& General Exp. (+000) $ 690 $ 727 $ 744 $ 773
Percentage of Total Revenue 10.5% 10.1% 10.4% 10.3%
Amount per Available Room $ 3,613 $ 3,806 $ 3,895 $ 4,047
Amount per Occupied Room $ 14.15 $ 14.10 $ 15.04 $ 15.41
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
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HVS International, Mineola, New York Income Capitalization Approach 113
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Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Clark Employers Corporation; the
management contract allows for a sum equal to 3% of gross revenues to be paid as
a management fee. Based on our review of the current market for management
contracts, we are of the opinion that this fee is consistent with prevailing
market terms. Applying this management fee structure to the projection of total
revenue yields the following forecast of the subject property's management fee.
================================================================================
Table 10-16 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Management Fee Expense (+000) $ 197 $ 216 $ 215 $ 226
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 114
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Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a fixed
and variable component model.
================================================================================
Table 10-17 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Marketing Expense (+000) $ 362 $ 381 $ 390 $ 405
Percentage of Total Revenue 5.5% 5.3% 5.4% 5.4%
Amount per Available Room $ 1,893 $ 1,995 $ 2,041 $ 2,121
Amount per Occupied Room $ 7.41 $ 7.39 $ 7.88 $ 8.07
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Holiday Inns Franchising for the
use of the company's name, trade marks, and service marks. The following table
illustrates the projection of the subject property's franchise fee.
================================================================================
Table 10-18 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Franchise Fees Expense (+000) $ 198 $ 220 $ 219 $ 230
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 115
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that operates with a lower-than-normal maintenance budget is likely to
accumulate a considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-19 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Property Oper.
& Maint. Exp. (+000) $ 217 $ 229 $ 234 $ 243
Percentage of Total Revenue 3.3% 3.2% 3.3% 3.2%
Amount per Available Room $ 1,137 $ 1,198 $ 1,226 $ 1,274
Amount per Occupied Room $ 4.45 $ 4.44 $ 4.73 $ 4.85
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 116
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Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-20 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Total Energy Expense $ 287 $ 298 $ 308 $ 319
Percentage of Total Revenue 4.4% 4.1% 4.3% 4.2%
Amount per Available Room $ 1,500 $ 1,562 $ 1,611 $ 1,669
Amount per Occupied Room $ 5.87 $ 5.78 $ 6.21 $ 6.35
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-21 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Forecast Property Taxes (+000) $ 246 $ 251 $ 260 $ 269
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 117
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Based on historical levels, we project the subject property's insurance expense
to be approximately $69,000 in 1997 (the first projection period). In subsequent
years, this amount is assumed to increase in tandem with inflation. The
following table outlines our projection of insurance expense.
================================================================================
Table 10-22 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Forecast Insurance Expense (+000) $ 69 $ 72 $ 74 $ 77
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-23 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized
- --------------------------------------------------------------------------------
Reserve for Replacement
Expense (+000) $ 262 $ 288 $ 287 $ 301
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 118
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Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning in 1997, and are
expressed in inflated dollars for each year.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 119
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================================================================================
Table 10-24 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Holiday Inn Select, Clark, New
Jersey (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
-------------------------------
Calendar Years: 1996 1997 1998
Number of Rooms: 191 191 191
Occupancy: 52.7% 70.0% 74.0%
Average Rate: $75.94 $81.34 $85.40
Days Open: 212 365 365
Occupied Rooms: 21,356 %Gross PAR POR 48,801 %Gross PAR POR 51,589 %Gross PAR POR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,622 71.5% $8,491 $75.94 $3,969 60.6% $20,780 $81.33 $4,406 61.2% $23,068 $85.41
Food 385 16.9 2,014 18.01 1,831 27.9 9,586 37.52 1,976 27.5 10,346 38.30
Beverage 160 7.0 835 7.47 458 7.0 2,398 9.39 494 6.9 2,586 9.58
Telephone 73 3.2 382 3.42 177 2.7 927 3.63 193 2.7 1,010 3.74
Net Other Income 31 1.3 160 1.43 117 1.8 613 2.40 124 1.7 649 2.40
Total Revenues 2,269 99.9 11,882 106.27 6,552 100.0 34,304 134.26 7,193 100.0 37,660 139.43
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 368 22.7 1,926 17.22 936 23.6 4,901 19.18 991 22.5 5,188 19.21
Food & Beverage 575 105.6 3,009 26.91 1,899 83.0 9,942 38.91 2,003 81.1 10,487 38.83
Telephone 40 55.5 212 1.90 99 55.9 518 2.03 105 54.4 550 2.04
Total Dept. Expenses 983 43.3 5,147 46.03 2,934 44.8 15,361 60.12 3,099 43.1 16,225 60.07
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,286 56.6 6,735 60.24 3,618 55.2 18,942 74.14 4,094 56.9 21,435 79.36
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 311 13.7 1,628 14.56 690 10.5 3,613 14.14 727 10.1 3,806 14.09
Management Fee 63 2.8 330 2.96 197 3.0 1,031 4.04 216 3.0 1,131 4.19
Marketing 193 8.5 1,010 9.04 362 5.5 1,895 7.42 381 5.3 1,995 7.39
Franchise Fees 52 2.3 270 2.42 198 3.0 1,037 4.06 220 3.1 1,152 4.26
Property Oper. & Maint. 185 8.1 967 8.65 217 3.3 1,136 4.45 229 3.2 1,199 4.44
Energy 165 7.3 864 7.73 287 4.4 1,503 5.88 298 4.1 1,560 5.78
Total Operating Expenses 969 42.7 5,071 45.35 1,951 29.7 10,215 39.98 2,071 28.8 10,843 40.14
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 318 13.9 1,664 14.88 1,667 25.5 8,728 34.16 2,023 28.1 10,592 39.21
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 176 7.8 921 8.24 246 3.8 1,288 5.04 251 3.5 1,314 4.87
Insurance 27 1.2 139 1.24 69 1.1 361 1.41 72 1.0 377 1.40
Reserve for Replacement 84 3.7 441 3.94 262 4.0 1,372 5.37 288 4.0 1,508 5.58
Total 287 12.7 1,501 13.42 577 8.9 3,021 11.82 611 8.5 3,199 11.84
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $31 1.2 163 $1.46 $1,090 16.6 $5,707 $22.34 $1,412 19.6 $7,393 $27.37
====================================================================================================================================
Food/Rooms 23.7% 46.1% 44.8%
Beverage/Food 41.5% 25.0% 25.0%
Telephone/Rooms 4.5% 4.5% 4.4%
Other Income/Rooms 1.9% 2.9% 2.8%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Calendar Years: 1999 Stabilized
Number of Rooms: 191 191
Occupancy: 71.0% 72.0%
Average Rate: $88.39 $91.48
Days Open: 365 365
Occupied Rooms: 49,498 %Gross PAR POR 50,195 %Gross PAR POR
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $4,375 61.0% $22,906 $88.39 $4,592 61.1% $24,042 $91.48
Food 1,983 27.6 10,382 40.06 2,074 27.6 10,859 41.32
Beverage 496 6.9 2,597 10.02 519 6.9 2,717 10.34
Telephone 192 2.7 1,005 3.88 202 2.7 1,058 4.02
Net Other Income 126 1.8 660 2.55 131 1.7 686 2.61
Total Revenues 7,172 100.0 37,550 144.90 7,518 100.0 39,361 149.78
- ---------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 1,009 23.1 5,283 20.38 1,050 22.9 5,497 20.92
Food & Beverage 2,044 82.5 10,702 41.29 2,126 82.0 11,131 42.35
Telephone 107 55.7 560 2.16 111 55.0 581 2.21
Total Dept. Expenses 3,160 44.1 16,545 63.84 3,287 43.7 17,209 65.48
- ---------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 4,012 55.9 21,005 81.05 4,231 56.3 22,152 84.29
- ---------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 744 10.4 3,895 15.03 773 10.3 4,047 15.40
Management Fee 215 3.0 1,126 4.34 226 3.0 1,183 4.50
Marketing 390 5.4 2,042 7.88 405 5.4 2,120 8.07
Franchise Fees 219 3.1 1,147 4.42 230 3.1 1,204 4.58
Property Oper. & Maint. 234 3.3 1,225 4.73 243 3.2 1,272 4.84
Energy 308 4.3 1,613 6.22 319 4.2 1,670 6.36
Total Operating Expenses 2,110 29.5 11,047 42.63 2,196 29.2 11,497 43.75
- ---------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,902 26.4 9,958 38.43 2,035 27.1 10,654 40.54
- ---------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 260 3.6 1,361 5.25 269 3.6 1,408 5.36
Insurance 74 1.0 387 1.50 77 1.0 403 1.53
Reserve for Replacement 287 4.0 1,503 5.80 301 4.0 1,576 6.00
Total 621 8.6 3,251 12.55 647 8.6 3,387 12.89
- ---------------------------------------------------------------------------------------------------
NET INCOME $1,281 17.8 $6,707 $25.88 $1,388 18.5 $7,267 $27.65
===================================================================================================
Food/Rooms 45.3% 45.2%
Beverage/Food 25.0% 25.0%
Telephone/Rooms 4.4% 4.4%
Other Income/Rooms 2.9% 2.9%
- ---------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 120
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================================================================================
Table 10-25 Ten-Year Forecast of Income and Expense, Holiday Inn Select,
Clark, New Jersey (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years Ending: 1997 1998 1999 2000 2001
--------------- --------------- --------------- --------------- ---------------
Number of Rooms: 191 191 191 191 191
Occupied Rooms: 48,801 51,589 49,498 50,195 50,195
Occupancy: 70.0% % of 74.0% % of 71.0% % of 72.0% % of 72.0% % of
Average Rate: $81.34 Gross $85.40 Gross $88.39 Gross $91.48 Gross $94.69 Gross
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,969 60.6% $4,406 61.2% $4,375 61.0% $4,592 61.1% $4,753 61.1%
Food 1,831 27.9 1,976 27.5 1,983 27.6 2,074 27.6 2,146 27.6
Beverage 458 7.0 494 6.9 496 6.9 519 6.9 537 6.9
Telephone 177 2.7 193 2.7 192 2.7 202 2.7 209 2.7
Net Other Income 117 1.8 124 1.7 126 1.8 131 1.7 136 1.7
Total 6,552 100.0 7,193 100.0 7,172 100.0 7,518 100.0 7,781 100.0
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
DEPARTMENTAL EXPENSES
Rooms 936 23.6 991 22.5 1,009 23.1 1,050 22.9 1,087 22.9
Food & Beverage 1,899 83.0 2,003 81.1 2,044 82.5 2,126 82.0 2,200 82.0
Telephone 99 55.9 105 54.4 107 55.7 111 55.0 115 55.0
Total 2,934 44.8 3,099 43.1 3,160 44.1 3,287 43.7 3,402 43.7
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
DEPARTMENTAL INCOME 3,618 55.2 4,094 56.9 4,012 55.9 4,231 56.3 4,379 56.3
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
OPERATING EXPENSES
Administrative & General 690 10.5 727 10.1 744 10.4 773 10.3 800 10.3
Management Fee 197 3.0 216 3.0 215 3.0 226 3.0 233 3.0
Marketing 362 5.5 381 5.3 390 5.4 405 5.4 419 5.4
Franchise Fees 198 3.0 220 3.1 219 3.1 230 3.1 238 3.1
Property Oper. & Maint 217 3.3 229 3.2 234 3.3 243 3.2 252 3.2
Energy 287 4.4 298 4.1 308 4.3 319 4.2 330 4.2
Total 1,951 29.7 2,071 28.8 2,110 29.5 2,196 29.2 2,272 29.2
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
HOUSE PROFIT 1,667 25.5 2,023 28.1 1,902 26.4 2,035 27.1 2,107 27.1
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
FIXED EXPENSES
Property Taxes 246 3.8 251 3.5 260 3.6 269 3.6 279 3.6
Insurance 69 1.1 72 1.0 74 1.0 77 1.0 79 1.0
Reserve for Replacement 262 4.0 288 4.0 287 4.0 301 4.0 311 4.0
Total 577 8.9 611 8.5 621 8.6 647 8.6 669 8.6
- --------------------------- --------------- --------------- ---------------- ---------------- ---------------
NET INCOME $1,090 16.6% $1,412 19.6% $1,281 17.8% $1,388 18.5% $1,438 18.5%
=========================== =============== =============== ================ ================ ===============
<CAPTION>
Calendar Years Ending: 2002 2003 2004 2005 2006
--------------- ---------------- ---------------- ---------------- ----------------
Number of Rooms: 191 191 191 191 191
Occupied Rooms: 50,195 50,195 50,195 50,195 50,195
Occupancy: 72.0% % of 72.0% % of 72.0% % of 72.0% % of 72.0% % of
Average Rate: $98.00 Gross $101.43 Gross $104.98 Gross $108.65 Gross $112.46 Gross
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $4,919 61.0% $5,091 61.1% $5,269 61.0% $5,454 61.1% $5,645 61.1%
Food 2,221 27.6 2,299 27.6 2,380 27.6 2,463 27.6 2,549 27.6
Beverage 555 6.9 575 6.9 595 6.9 616 6.9 637 6.9
Telephone 216 2.7 224 2.7 231 2.7 239 2.7 248 2.7
Net Other Income 141 1.8 145 1.7 151 1.8 156 1.7 161 1.7
Total 8,052 100.0 8,334 100.0 8,626 100.0 8,928 100.0 9,240 100.0
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
DEPARTMENTAL EXPENSES
Rooms 1,125 22.9 1,164 22.9 1,205 22.9 1,247 22.9 1,291 22.9
Food & Beverage 2,277 82.0 2,357 82.0 2,439 82.0 2,525 82.0 2,613 82.0
Telephone 119 55.1 123 54.9 127 55.0 132 55.2 136 54.8
Total 3,521 43.7 3,644 43.7 3,771 43.7 3,904 43.7 4,040 43.7
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
DEPARTMENTAL INCOME 4,531 56.3 4,690 56.3 4,855 56.3 5,024 56.3 5,200 56.3
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
OPERATING EXPENSES
Administrative & General 828 10.3 857 10.3 887 10.3 918 10.3 951 10.3
Management Fee 242 3.0 250 3.0 259 3.0 268 3.0 277 3.0
Marketing 434 5.4 449 5.4 465 5.4 481 5.4 498 5.4
Franchise Fees 246 3.1 255 3.1 263 3.0 273 3.1 282 3.1
Property Oper. & Maint 261 3.2 270 3.2 279 3.2 289 3.2 299 3.2
Energy 341 4.2 353 4.2 366 4.2 379 4.2 392 4.2
Total 2,352 29.2 2,434 29.2 2,519 29.1 2,608 29.2 2,699 29.2
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
HOUSE PROFIT 2,179 27.1 2,256 27.1 2,336 27.2 2,416 27.1 2,501 27.1
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIXED EXPENSES
Property Taxes 288 3.6 298 3.6 309 3.6 320 3.6 331 3.6
Insurance 82 1.0 85 1.0 88 1.0 91 1.0 94 1.0
Reserve for Replacement 322 4.0 333 4.0 345 4.0 357 4.0 370 4.0
Total 692 8.6 716 8.6 742 8.6 768 8.6 795 8.6
- --------------------------- --------------- ---------------- ---------------- ---------------- ----------------
NET INCOME $1,487 18.5% $1,540 18.5% $1,594 18.6% $1,648 18.5% $1,706 18.5%
=========================== =============== ================ ================ ================ ================
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 121
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HVS
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International
=============
The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-26 Average Mortgage Interest Rates and Average A Corporate Bond Yields
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Average A
Average Corporate
Period Interest Rate Bond Yield
----------------------------------------------------------------------
1st Quarter 1996 7.79% 7.37%
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996 as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of
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65% to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-27 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property
Hotel City and State Rooms Sale Sales Price Rate Yield
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $ 23,000,000 11.0% 14.6%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-28 Equity Yield Requirements
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Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
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Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70 x 0.11186 = 7.82990
Equity 30 x 0.12000 = 3.60000
--------
Overall Capitalization Rate 11.42990
Because this overall rate will be used to capitalize net income ten years from
the date of value, an downward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
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Table 10-29 Summary of Valuation Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest)
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and the equity investor (equity yield). The equation and the calculations
associated with this simultaneous valuation formula are set forth in the Addenda
to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $11,100,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22%, then $11,100,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $ 7,769,000
Equity Component (30%) 3,330,000
-----------
Total $11,099,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $ 7,769,000
Mortgage Constant 0.111856
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Annual Debt Service $ 869,007
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-30 Forecast of Net Income to Equity
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Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
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1997 $1,090,000 - $ 869,000 = $ 221,000
1998 1,412,000 - 869,000 = 543,000
1999 1,281,000 - 869,000 = 412,000
2000 1,388,000 - 869,000 = 519,000
2001 1,438,000 - 869,000 = 569,000
2002 1,487,000 - 869,000 = 618,000
2003 1,540,000 - 869,000 = 671,000
2004 1,594,000 - 869,000 = 725,000
2005 1,648,000 - 869,000 = 779,000
2006 1,706,000 - 869,000 = 837,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($1,766,000 / 0.110 ) $16,055,000
Less:
Brokerage and Legal Fees 482,000
Mortgage Balance 5,597,000
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Net Sale Proceeds to Equity $ 9,976,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-31 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
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Total Property $11,099,000 14.6%
Mortgage 7,769,000 9.4
Equity 3,330,000 22.0
Note: Whereas the mortgage constant and value are calculated on the basis of
monthly mortgage payments, the mortgage yield in this proof assumes single
annual payments. As a result, the proof's derived yield may be slightly
less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $11,100,000 value is correct based on the assumptions
used in this approach.
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Table 10-32 Total Property Yield
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Net Income before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.6% Cash Flow
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1997 $ 1,090,000 x 0.872579 = $ 951,000
1998 1,412,000 x 0.761395 = 1,075,000
1999 1,281,000 x 0.664377 = 851,000
2000 1,388,000 x 0.579722 = 805,000
2001 1,438,000 x 0.505853 = 727,000
2002 1,487,000 x 0.441397 = 656,000
2003 1,540,000 x 0.385154 = 593,000
2004 1,594,000 x 0.336077 = 536,000
2005 1,648,000 x 0.293254 = 483,000
2006 17,279,000 * x 0.255887 = 4,421,000
-----------
Total Property Value $11,098,000
* 10th year net income of $1,706,000 plus sales proceeds of $15,573,000
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Table 10-33 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $ 869,000 x 0.914267 = $ 794,000
1998 869,000 x 0.835885 = 726,000
1999 869,000 x 0.764223 = 664,000
2000 869,000 x 0.698704 = 607,000
2001 869,000 x 0.638802 = 555,000
2002 869,000 x 0.584036 = 508,000
2003 869,000 x 0.533965 = 464,000
2004 869,000 x 0.488187 = 424,000
2005 869,000 x 0.446334 = 388,000
2006 6,466,000 * x 0.408068 = 2,639,000
----------
Value Of Mortgage Component $7,769,000
* 10th year debt service of $869,000
plus outstanding mortgage balance of $5,597,000
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Table 10-34 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.0% Cash Flow
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1997 $ 221,000 x 0.819664 = $ 181,000
1998 543,000 x 0.671849 = 365,000
1999 412,000 x 0.550691 = 227,000
2000 519,000 x 0.451381 = 234,000
2001 569,000 x 0.369981 = 211,000
2002 618,000 x 0.303260 = 187,000
2003 671,000 x 0.248572 = 167,000
2004 725,000 x 0.203745 = 148,000
2005 779,000 x 0.167003 = 130,000
2006 10,813,000 * x 0.136886 = 1,480,000
----------
Value of Equity Component $3,330,000
* 10th year net income to equity of $837,000 plus sales proceeds of $9,976,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.6%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 14% to 16%, it is our opinion that a 15% discount factor would be
appropriate for the Holiday Inn Select. The following table illustrates the
discounted cash flow analysis using a 15% discount factor.
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Table 10-35 Discounted Cash Flow Analysis
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Discount
Calendar Net Factor Discounted
Year Income @ 15.0% Cash Flow
--------------------------------------------------------------
1997 $ 1,090,000 0.86957 $ 947,826
1998 1,412,000 0.75614 1,067,675
1999 1,281,000 0.65752 842,278
2000 1,388,000 0.57175 793,594
2001 1,438,000 0.49718 714,940
2002 1,487,000 0.43233 642,871
2003 1,540,000 0.37594 578,943
2004 1,594,000 0.32690 521,081
2005 1,648,000 0.28426 468,464
2006 17,278,909 * 0.24718 4,271,082
Estimated Market Value: $10,848,755
(Say): $10,800,000
Reversion Analysis
------------------
11th Year's Net Income $ 1,766,000
Capitalization Rate 11.0%
Total Sales Proceeds $16,054,545
Less: Broker & Legal @ 3.0% 481,636
* 10th year net income of $1,706,000 plus sales proceeds of $15,572,909
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors...This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $11,100,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
<PAGE>
HVS International, Mineola, New York Sales Comparison Approach 136
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Sale #1:
--------
Property: Marriott Forestal Village
Location: 201 Village Boulevard
Princeton, NJ
Date of Sale: September, 1996
Sales Price: $19,600,000
Grantor: Gale and Wentworth
Grantee: Starwood Lodging Trust
Year Opened: 1989
Number of Rooms: 294
Price per Room: $66,667
Confirmed By: Starwood Lodging Trust
Comments: This property is located in Princeton's
Forrestal Village, near the New Jersey
Turnpike and Routes 1 and 295. The
improvements include two restaurants, two
lounges, a swimming pool, a health club,
and meeting facilities. This sale
represented an all-cash transaction.
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HVS International, Mineola, New York Sales Comparison Approach 137
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Sale #2:
--------
Property: Radisson Somerset
Location: 200 Atrium Drive
Somerset, NJ
Date of Sale: January, 1996
Sales Price: $18,000,000
Grantor: SA Associates
Grantee: Thayer Lodging
Year Opened: 1983
Number of Rooms: 361
Price per Room: $49,861
Confirmed By: John Hamilton, Doubletree
Comments: This hotel was scheduled to be converted
to a Doubletree. The property is adjacent
to the Garden State Exhibition Center,
which generates a significant portion of
the hotel's demand. A $3 million
renovation was planned to include the
development of a conference center style
facility on the second floor of the
property. The management contract was
terminated but all fees were paid for by
the buyer. This sale represented an
all-cash, fee simple transaction.
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HVS International, Mineola, New York Sales Comparison Approach 138
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Sale #3:
--------
Property: Somerset Marriott
Location: 110 Davidson Avenue
Somerset, NJ
Date of Sale: August, 1995
Sales Price: $25,000,000
Grantor: Metric Realty Investors
Grantee: Equistar
Year Opened: 1978
Number of Rooms: 435
Price per Room: $57,471
Confirmed By: Equistar
Comments: The improvements include a swimming pool
and 12,000 square feet of meeting space.
Renovations of $3 million were
anticipated at the time of the sale to
upgrade guestrooms and public space. The
property was switched from a Marriott
corporate managed property to a
franchise. However, there were no
reported management contract termination
fees associated with the sale. This sale
represented an all-cash, fee simple
transaction.
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HVS International, Mineola, New York Sales Comparison Approach 139
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Sale #4:
--------
Property: Comfort Inn
Location: 7625 Imperial Way
Fogelsville, PA
Date of Sale: March 23, 1995
Sales Price: $7,000,000
Grantor: Solow Hotel Corporation
Grantee: Innkeepers USA, L.P.
Year Opened: 1990
Number of Rooms: 127
Price per Room: $55,118
Confirmed By: Pratt, White, & Whitney - Real Estate
Appraisers and Consultants
Comments: In addition to guestrooms, improvements
include a lounge and conference room.
Sale #5:
--------
Property: Stouffer's Park Ridge Hotel
Location: 480 North Gulph Road
King of Prussia, PA
Date of Sale: August 10, 1995
Sales Price: $16,500,000
Grantor: Citicorp
Grantee: HEI Hotels
Year Opened: 1973
Number of Rooms: 265
Price per Room: $62,264
Confirmed By: HEI
Comments: This property underwent a $4 million
renovation prior to the sale. Because of
the renovation, management changes, and
operating concept changes, the historical
operating data is not considered germane.
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HVS International, Mineola, New York Sales Comparison Approach 140
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In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in 1995. The details of this
transaction are summarized as follows:
Subject Property:
-----------------
Property: Ramada Hotel (now the Holiday Inn Select)
Location: 36 Valley Road
Clark, NJ
Date of Sale: August 24, 1995
Sales Price: $3,750,000
Grantor: RTC Mortgage Trust
Grantee: Clark New Jersey Hotel Limited
Partnership - an entity controlled by
Ashford Financial Corporation
Year Opened: 1973
Number of Rooms: 191
Price per Room: +/-$18,848
Confirmed By: Ashford Financial Corporation
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The seller had acquired this
hotel through foreclosure and, in keeping with the brief of the RTC, was
strongly motivated to dispose of the property quickly. Ashford purchased the
property for all cash, using only equity funds. Based on our understanding of
the terms of this transaction, we believe this transaction represents a
distressed sale and was reflective of market value.
The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecast to continue this positive trend. As previously discussed, the market
for hotel investments has also improved significantly, due to changes in lender
and investor attitudes. Finally, the property itself has undergone a significant
renovation, with a total of $3,200,000 spent on upgrading the facilities and
amenities. For these reasons, we are of the opinion that the August, 1995 sale
involving the subject property is not a reliable indicator of the current value
of the hotel.
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HVS International, Mineola, New York Sales Comparison Approach 141
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Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $49,900 to $66,700 per room, or $9,500,000
- - $12,700,000 for the 191-unit subject property. The income capitalization
approach indicates a value of $11,100,000, which falls within this range.
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HVS International, Mineola, New York Cost Approach 142
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
<PAGE>
HVS International, Mineola, New York Cost Approach 143
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1973, and will be approximately 24 years
old as of the date of this appraisal. After the recent renovation, the subject
property has considerably improved its room and public space product. However,
the property still suffers from considerable functional obsolescence, the
majority of which exists in the meeting space (discussed earlier in this
report). In summary, because the meeting space is held within the hotel tower on
the second floor, the largest space can only accommodate limited-size groups.
This restricts the hotel's ability to compete in this segment of the Saddle
Brook-Woodbridge meeting and group market.
The depressed hotel market conditions that prevailed in the late 1980s and the
early 1990s have also led to a degree of external obsolescence. In our opinion,
it is impossible to identify and quantify the impact of these factors on the
property's value with any accuracy, so we will only estimate the replacement
cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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HVS International, Mineola, New York Cost Approach 144
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================================================================================
Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- - ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Cost Approach 145
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
- --------------------------------------------------------------------------------
Cost No. of
Hotel Cost per Room Rooms Total Cost
--------------------------------------------------------------------------
Building $50,000 191 $ 9,550,000
FF&E 15,000 191 2,865,000
Pre-Opening 3,500 191 668,500
Operating Capital 2,700 191 515,700
--------------------------------------------------------------------------
Total $71,200 $13,599,200
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
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HVS International, Mineola, New York Cost Approach 146
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Holiday Inn Select appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 4.0% and 5.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.5% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1996 dollars) $ 4,141,721
Rental Percentage 0.045
-----------
Economic Ground Rent $ 186,377
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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HVS International, Mineola, New York Cost Approach 147
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Economic Ground Rent $186,377 $1,863,774
------------------------ = ------------ =
Capitalization Rate 0.10
Estimated Land Value (Say) $1,860,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 14% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
- --------------------------------------------------------------------------------
Cost of the Improvements and FF&E $13,599,200
Land Value 1,860,000
-----------
Total Replacement Cost $15,459,200
Total Replacement Cost (Say) $15,500,000
- --------------------------------------------------------------------------------
If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Holiday Inn Select. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 148
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
-------- ----------------
Income Capitalization $11,100,000
Sales Comparison $9,500,000 - $12,700,000
Cost (Replacement Cost) $15,500,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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HVS International, Mineola, New York Reconciliation of Value Indications 149
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate a value range of
$49,861 to $66,667 per available room. The income capitalization approach
indicates a per-room value of approximately $58,000. This information suggests
that a slight downward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. In the case of the subject property, the replacement cost was higher
than the value indicated by the income capitalization approach; therefore, this
would limit to a certain extent the downward adjustment indicated by the sales
comparison approach.
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HVS International, Mineola, New York Reconciliation of Value Indications 150
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Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market value
of the fee simple interest in the Holiday Inn Select - Clark, as of January 1,
1997, is:
$10,700,000
TEN MILLION SEVEN HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $56,000 per room, which is well supported
by market sales and roundly 3.7% lower than the value indicated by the income
capitalization approach. The estimate of value assumes either the availability
of third-party financing or the willingness and capability of the seller to take
back purchase-money financing so that a buyer can obtain the level of debt set
forth in the Income Capitalization Approach section of this appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and
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HVS International, Mineola, New York Reconciliation of Value Indications 151
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similar items. Our inspection of the Holiday Inn Select indicates that the
personal property and fixtures are in superior condition
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $15,000 per available room. Assuming an average
useful life of ten years and an effective age of one year (the subject property
was renovated earlier this year), the value of the furniture, fixtures, and
equipment currently in place is approximately $13,500 per room, or a total of
$2,578,000.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 152
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and 153
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 154
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 155
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Rodney G. Clough personally inspected the property described in this
report; that Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 156
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Rodney G. Clough
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Rodney G. Clough
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
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Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
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Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property's Lobby
[GRAPHIC OMITTED]
View of the Subject Property's standard guestroom
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Subject Property standard Bathroom
[GRAPHIC OMITTED]
Subject Property Ballroom
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Subject Property's Hunter's Grill Restaurant
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Woodbridge Hilton
[GRAPHIC OMITTED]
Woodbridge Sheraton
<PAGE>
Title No. 61151
DESCRIPTION
ALL that certain tract, lot and parcel of land lying and being in the Township
of Clark, County of Union and State of New Jersey, being more particularly
described as follows:
BEGINNING at a point being the intersection of the westerly line of Walnut
Avenue, as widened, with the southerly right of way line of Bloodgood Branch of
the Lehigh Valley Railroad and running; thence
1. South 04 degrees 57 minutes O5 seconds east along said widened westerly
line of Walnut Avenue 323.95 feet to a point of curvature; thence
2. Southerly and westerly on a curve to the right having a radius of 75.00
feet, an arc distance of 145.13 feet, to a point of tangency, in the
northerly line of Valley Road, as widened; thence
3. North 74 degrees 04 minutes 40 seconds west along said line of Valley
Road, 439.03 feet to a point in the easterly line of Lot 02 Block 154 on
the Clark Township tax map; thence
4. North 17 degrees 27 minutes 00 seconds east along said easterly line
131.93 feet; thence
5. North 36 degrees 45 minutes 30 seconds west along the northeasterly line
of said Lot 02 Block 154, 45.37 feet to a point in the southeasterly line
of Lot 1 Block 154 on said tax map; thence
6. North 41 degrees 38 minutes 00 seconds east along said southeasterly line
of Lot 01, 9.12 feet to the northeast corner of Lot 0l Block 154 on said
tax map; thence
7. North 68 degrees 06 minutes 30 seconds west along the northerly line of
said Lot 01, Block 154, 17.16 feet to the most easterly corner of Lot 08,
Block 154 on said tax map; thence
8. North 36 degrees 45 minutes 30 seconds west along the northeasterly line
of said Lot 08 Block 154, 78.31 feet to a point in the southerly line of
the Garden State Parkway; thence
9. North 49 degrees 55 minutes 00 seconds east along the same 276.02 feet to
a point in the southerly right of way line of Bloodgood Branch of Lehigh
Valley Railroad; thence
continued ........
For conveyancing only, if intended to be conveyed: Together with all rights,
title and interest of, in and to any streets and roads abutting the above
described premises, to the center line thereof.
<PAGE>
Title No. 61151
DESCRIPTION
(continued - page two)
10. Southeasterly, along said Railroad line, on a curve to the left having a
radius of 1,179.28 feet an arc distance of 351.05 feet to the point of
BEGINNING.
NOT FOR POLICY
Said premises are known as 36 Valley Road, Clark, New Jersey designated as Block
154 Lots 3, 6 and 7 on the tax Map of the Township of Clark.
For conveyancing only, if intended to be conveyed: Together with all rights,
title and interest of, in and to any streets and roads abutting the above
described premises, to the center line thereof.
<PAGE>
HVS International, Mineola, New York Addendum
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Synopsis of Holiday Inn License Agreement
Date: August 25, 1994
Licensor: Holiday Inns Franchising, Inc.
Licensee: Clark New Jersey Hotel Limited Partnership - an entity
controlled by Ashford Financial Corporation
Premises: 36 Valley Road, Clark, New Jersey
Term: 15 years
Renewal: No renewal rights conveyed
Fees: Royalty: 5% of gross room revenues
Marketing Fees: 1.5% of gross room revenues
Reservation Contribution: 1.0% of gross room revenues
Monthly Holidex fee of $5.97 for each guestroom at the
hotel
Licensor Services: Reservation services, training, marketing and
operations consulting, maintenance of standards
Licensee Obligations: Various operational requirements, upgrades
Termination: Upon default
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Synopsis of Hotel Management Agreement
Date: August 24, 1995
Owner: Clark New Jersey Hotel Limited Partnership - an entity
controlled by Ashford Financial Corporation
Manager: Remington Clark Employers Corporation
Premises: 36 Valley Road, Clark, New Jersey
Term: 15 years
Renewal: 2 five-year extensions
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: Under various conditions of default
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily. This process can be expressed in two algebraic equations
that set forth the mathematical relationships between the known and unknown
variables using the following symbols.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/S(n) = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11/R(r)),
are calculated by application of the following formula.
b(NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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HVS International, Mineola, New York Simultaneous Valuation Formula
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 - M) V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
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HVS International, Mineola, New York Simultaneous Valuation Formula
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1: Summary of Known Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
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The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
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Table 2: Present Worth of $1 Factor at the Equity Yield Rate
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Calendar Year Present Worth of $1
Ending Factor @22.0%
---------------------------------------------------------------
1997 0.819664
1998 0.671849
1999 0.550691
2000 0.451381
2001 0.369981
2002 0.303260
2003 0.248572
2004 0.203745
2005 0.167003
2006 0.136886
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 x 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following.
( 1,090,000 - 0.078299 V ) x 0.819672 +
( 1,412,000 - 0.078299 V ) x 0.671862 +
( 1,281,000 - 0.078299 V ) x 0.550707 +
( 1,388,000 - 0.078299 V ) x 0.451399 +
( 1,438,000 - 0.078299 V ) x 0.369999 +
( 1,487,000 - 0.078299 V ) x 0.303278 +
( 1,540,000 - 0.078299 V ) x 0.248589 +
( 1,594,000 - 0.078299 V ) x 0.203761 +
( 1,648,000 - 0.078299 V ) x 0.167017 +
( 1,706,000 - 0.078299 V ) x 0.136899 +
((( 1,766,000 / 0.110 ) - ( 0.03 x ( 1,766,000 / 0.110 )) -
(( 1 - 0.279638 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
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Like terms are combined as follows.
$7,505,483 - 0.376214 V = (1 - 0.70) V
$7,505,483 = 0.67621 V
V = $ 7,505,483 / 0.67621
V = $11,099,279
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $11,100,000
<PAGE>
HVS International, Mineola, New York Qualifications of Rodney G. Clough
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INTERNATIONAL
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Rodney G. Clough
Employment
1995 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports
and Investment Counseling)
1994 THE MIRAGE HOTEL AND CASINO
Las Vegas, Nevada
Summer, 1993 HYATT REGENCY DENVER DOWNTOWN
Denver, Colorado
1991 THE STATLER HOTEL AND JW MARRIOTT
EXECUTIVE EDUCATION CENTER
Ithaca, New York
1988 UNIVERSITY OF COLORADO CATERING
Boulder, Colorado
Education BS - School of Hotel Administration, Cornell University
(Managing Director, HEC 69)
Professional Cornell Society of Hotelmen
Affiliations
Examples of Bay County Conference Center Keenan & Hewitt
Corporate and Planning Authority Mountain Spa Development
Institutional Capitol Hotel Group OCWEN Financial Corporation
Clients Served City of Portsmouth ITT Sheraton
Fairmont Hotel Management Co. Samoth, Inc.
Grand Heritage Hotels Sumitomo Bank Ltd.
<PAGE>
HVS International, Mineola, New York Qualifications of Rodney G. Clough
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HVS
INTERNATIONAL
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================================================================================
Examples of Hotels Florida
Appraised or Evaluated - Floridan Hotel, Tampa
- Proposed Sheraton, Tampa
- Grenelefe Golf and Tennis Resort, Haines City
Illinois
- The Fairmont, Chicago
- Days Inn, Chicago
Kansas
- Broadview Hotel, Wichita
Massachusetts
- Copley Plaza Hotel, Boston
Michigan
- Proposed Conference Center, Bay City
Nevada
- Proposed Mountain Spa Resort, Las Vegas
New York
- Hotel Gregory, Brooklyn
- LaGuardia Ramada, East Elmhurst
- Staten Island Hotel, Staten Island
South Carolina
- Proposed Inn, Charleston
Texas
- Proposed Sheraton, San Antonio
- Holiday Inn Riverwalk North, San Antonio
- Crossroads Inn, San Antonio
Virginia
- Doubletree Hotel, Crystal City
- Proposed Downtown Hotel, Portsmouth
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
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INTERNATIONAL
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================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
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INTERNATIONAL
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================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
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INTERNATIONAL
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================================================================================
Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
- -------------
INTERNATIONAL
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================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
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INTERNATIONAL
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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HVS
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INTERNATIONAL
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================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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INTERNATIONAL
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================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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INTERNATIONAL
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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INTERNATIONAL
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================================================================================
Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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================================================================================
Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
<PAGE>
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Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
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=============
HVS
- -------------
International
=============
================================================================================
Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
<PAGE>
Hospitality Valuation Services Mineola, New York
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Ramada Plaza Hotel
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Woburn, Massachusetts
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
January 2, 1997
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Ramada Plaza Hotel
Woburn, Massachusetts
Ref. #9610283
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Middlesex area.
Our report was prepared in accordance with, and is subject to, the requirements
of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and
the Uniform Standards of Professional Practice (USPAP), as provided by the
Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple interest in
the subject property described in this report, as of January 1, 1997, is:
$6,000,000
SIX MILLION DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Robert Wong
Robert Wong
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary ......................................... 1
2. Nature of the Assignment .................................. 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ............................ 7
4. Market Area Analysis ...................................... 24
5. Overview of External Forces Affecting the
U.S. Lodging Industry ..................................... 37
6. Lodging Market Supply and Demand Analysis ................. 53
7. Projection of Occupancy and Average Rate .................. 72
8. Highest and Best Use ...................................... 86
9. Approaches to Value ....................................... 88
10. Income Capitalization Approach ............................ 91
11. Sales Comparison Approach ................................. 130
12. Cost Approach ............................................. 138
13. Reconciliation of Value Indications ....................... 144
14. Statement of Assumptions and Limiting Conditions .......... 148
15. Certification ............................................. 151
Addenda
Photographs of the Subject Property
Photographs of the Competition
Legal Description
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Addenda (continued)
Synopsis of Franchise and License Agreements
Synopsis of Hotel Management Agreement
Explanation of the Simultaneous Valuation Formula
Qualifications
Robert Wong
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Ramada Plaza Hotel
Location: 15 Middlesex Canal Park Road
Woburn, Massachusetts 01801
Date of Inspection: October 17, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
Area: +/-7.497 acres, or +/-326,555 square feet
Zoning: B-I Interstate Business
Assessor's Parcel Number: 14-69190-54576-00
Improvements Description
Age: Constructed in 1972
Property Type: Full-service
Guestrooms: 196
Number of Stories: One and four stories
Food and Beverage Facilities: Cafe Fennel and Juliet's
Meeting Space: Six rooms, +/-5,330 square feet
Parking: 402 surface parking spaces
Summary of Value Parameters
Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six months to one year
Number of Years to Stabilize: Four
Stabilized Year: 2000
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 12%
Brokerage and Legal Fees: 3%
Holding Period: 10 years
Calculated Discount Rate: 14.52%
Estimates of Value
Income Capitalization Approach: $5,970,000
Sales Comparison Approach: $4,800,000 - $7,500,000
Cost Approach (Replacement Cost): $12,600,000
Market Value Conclusion: $6,000,000
Market Value Conclusion per Room: $30,600
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-326,555-square-foot (+/-7.497-acre) parcel improved with a 196-room,
full-service lodging facility known as the Ramada Plaza Hotel, which opened in
1972. In addition to guestrooms, the subject property contains a restaurant,
lounge, 5,330 square feet of meeting and banquet space, an indoor swimming pool,
exercise room, and other facilities typically found in a full-service transient
lodging facility. The hotel is located at the southwest quadrant of the
intersection formed by Main Street (Route 38) and Interstate 95 (Route 128).
Municipal jurisdictions governing the property include the City of Woburn,
County of Middlesex, and the Commonwealth of Massachusetts. The hotel's civic
address is 15 Middlesex Canal Park Road, Woburn, Massachusetts, 01801.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Woburn
area for the purpose of estimating the market value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently and knowledgeably,
and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
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HVS International, Mineola, New York Nature of the Assignment 4
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3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities and analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) Although Ashford
Financial Corporation currently holds only the leasehold interest in the
property, the company plans to exercise a buyout option in the ground lease,
which allows it to acquire ownership of the land. According to Ashford Financial
Corporation, the buyout will occur prior to the January 1, 1997 date of value of
this appraisal. The subject property is appraised as a going concern (i.e., an
open and operating facility).
Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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HVS International, Mineola, New York Nature of the Assignment 5
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Estate Appraisers and the Appraisal Institute, entitled The Valuation of Hotels
and Motels,(1) Hotels, Motels and Restaurants: Valuations and Market Studies,(2)
The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations,(3) and Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
According to records maintained at the City of Woburn Tax Assessor's Office and
information provided by Ashford Financial Corporation, the subject property's
land is owned by Mystic Development Corporation, formerly known as Mystic
Disposal Corporation. The leasehold interest in the property was acquired by
Ramada Assured Income Associates, L.P., which is an investment partnership
created and controlled by Lehman Brothers, in 1987 for a sales price of
$7,537,000 from the Ramada Hotel Operating Company, which built the hotel in
1972.
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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In October, 1994, Ashford Financial Corporation acquired the leasehold interest
of the subject property as part of a package of six hotels from Ramada Assured
Income Associates, L.P. The total price for the portfolio was $20,250,000, and
the allocated price for subject property was $2,750,000. At the time of the
sale, Ashford Financial Corporation also entered into an agreement for the
assignment and assumption of the ground lease between Ramada Assured Income
Associates, L.P. and Mystic Development Corporation. The current ownership
entity of the leasehold interest is Woburn Massachusetts Hotel II Limited
Partnership, which is controlled by Ashford Financial Corporation.
The subject property is operated under a franchise agreement with Ramada; this
agreement expires on October 2, 2009. The hotel is also subject to a management
agreement with Remington Hospitality, Inc.; an abstract of this contract is
presented in the Addenda to this report.
For the purposes of this appraisal, we have assumed the fee simple ownership of
the subject property by Ashford Financial Corporation and the operation of the
property by Remington Hospitality, Inc. as a Ramada Plaza Hotel.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six months
to one year to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Robert Wong and Anne Lloyd Jones on
October 17, 1996.
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HVS International, Mineola, New York Description of the Land, Improvements 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located on the southwest quadrant of the intersection formed
by Main Street (Route 38) and Interstate 95 (Route 128), in the northern section
of the City of Woburn. Municipal jurisdictions governing the property include
the City of Woburn, the County of Middlesex, and the State of Massachusetts.
According to a August 25, 1994 survey prepared by Des Lauriers and Associates,
Inc., the subject parcel measures approximately +/-326,555 square feet, or
+/-7.497 acres. The subject site is generally rectangular in shape and features
approximately 437 feet of frontage along Middlesex Canal Park Road. The subject
parcel is bounded by Interstate 95 to the north, Middlesex Canal to the east, an
improved parcel to the west, and Middlesex Canal Park Road to the south. Primary
vehicular access to the property is provided by Middlesex Canal Park Road.
The topography of the parcel is generally flat. In conclusion, size and
topography of the subject parcel appear well-suited for hotel use. The site is
fully developed, with no excess land available for expansion.
Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purpose of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would affect its use or marketability.
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HVS International, Mineola, New York Description of the Land, Improvements 8
Zoning, Taxes, and Neighborhood
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Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is readily accessible to a variety of local, county, state, and interstate
highways.
The Ramada Plaza Hotel is strategically located in proximity to the intersection
of two of Massachusetts' major roadways: Interstate 95, which is known locally
as Route 128, and Interstate 93.
Interstate 95 (I-95) - a transnational highway connecting the City of Miami,
Florida in the south to the Maine-Canadian border to the north - also serves as
an important north/south artery serving the area. The subject property is
located approximately three-quarters of a mile southeast of the intersection of
Interstates 93 and 95. In the vicinity of the City of Woburn, I-95 extends in an
east/west direction. This highway has become a major commercial corridor, with
high-technology businesses proliferating along this route over the last decade.
State Route 128, which runs conjointly with I-95 in the greater Boston area,
serves a significant amount of interstate, inter-regional, and commutational
motorists. From the City of Woburn, State Route 128 extends in a northeasterly
direction to Gloucester at the far northeastern portion of the commonwealth.
Southward from the City of Woburn, State Route 128 (I-95) serves as an inner
beltway, partially encircling the western side of the City of Boston before
terminating near Dedham, where I-95 continues southward through Providence,
Rhode Island and along the eastern coast of the United States to Florida.
Interstate 93, which abuts the subject property, is a six-lane, limited-access,
divided highway that originates south of Boston and stretches north, eventually
connecting with Interstate 91 in northern Vermont, along the New
Hampshire-Vermont border. Interstate 93 is the primary north/south route
connecting Boston to points north; during the summertime this roadway is popular
with leisure travelers journeying between the Boston metropolitan area and New
Hampshire.
Overall, by virtue of its location along Interstate 95 and its close proximity
to Interstate 93, regional access to the Ramada Plaza Hotel is considered to be
highly favorable.
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Zoning, Taxes, and Neighborhood
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Local Access and Visibility
Primary access to the subject property is provided by Middlesex Canal Park Road,
which is a service road extending off of Main Street in a westerly direction.
Main Street, which is also known as Route 38, is Woburn's major north-south
roadway and extends from northern Boston, through Downtown Woburn, and to
Interstate 495, which lies approximately eleven miles north of Woburn. Motorists
traveling Interstate 95 exit at the I-95/Main Street interchange, circle around
the interchange rotary to the southern Main Street exit, proceed south on Main
Street, and turn right onto Middlesex Canal Park Road.
While the subject property is somewhat visible from northbound I-95, it is not
from the southbound lanes. The subject property is also not visible from Main
Street. However, a proprietary sign located at the intersection of Main Street
and Middlesex Canal Park Road facilitates local access to the hotel and
minimizes any adverse effects resulting from the subject property's poor
visibility from main roadways. Once motorists are on Middlesex Canal Park Road,
the hotel is visible. Overall, the subject site is considered desirable for
hotel use.
Airport Access
Logan International Airport is located approximately 17 miles southeast of the
subject site. Access to the subject property is provided by Interstates 93 and
95. Motorists travel on northbound I-93, and then southbound on I-95, before
following the same instructions as set forth previously.
Access to Local Demand Generators
The Ramada Plaza Hotel is situated in close proximity to the area's primary
generators of lodging demand. The following table outlines some of these major
demand generators and their distance from the subject site.
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Table 3-1 Local Demand Generators
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Approximate Distance Approximate Driving
Demand Generator from Subject Site (in Miles) Time (in Minutes)
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Lahey Clinic 2 5
Cummings Business Park 2 5
Unicorn Business Park 3 8
Woburn Commerce Center 2 5
Hanscom Air Force Base 5 10
Marshalls 7 15
W.R. Grace 5 10
Downtown Boston 15 20
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Zoning, Taxes, and Neighborhood
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The subject site is proximate to the area's demand generators and is well-suited
for its use as a transient lodging facility.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water City of Woburn
Electricity Boston Edison Co.
Telephone NYNEX (local service)
MCI (long distance service)
Sewer City of Woburn
Gas Boston Gas Co.
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Flood Zone
Possible locational hazards include flood potential. According to the Federal
Emergency Management Agency (FEMA) Community Panel Number 250229 0003 B, dated
July 2, 1980, the subject property is located within Flood Zone C, an area of
minimal flooding.
Seismicity
Information pertaining to the seismicity of the subject site was not provided to
the appraisers. We have assumed that the subject site is not situated in an area
of seismic danger.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented in the Addenda to this
report.
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Zoning, Taxes, and Neighborhood
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Conclusion
The subject parcel appears well-suited as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The subject site consists of flat topography.
o A well-developed network of area and interstate highways exists in close
proximity to the subject property.
o All necessary utilities are available to the subject property.
o The subject site is in close proximity to area demand generators.
Disadvantages
o Visibility of the subject property from main roadways is poor.
o Logan International Airport is located 15 miles away from the subject
property, making airport access only fair.
The advantages noted above are important locational characteristics. Although
visibility of the subject property and airport access are poor, the advantages
outweigh the disadvantages, and we believe that the site is well-suited for
hotel use.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by Ashford Financial
Corporation.
Ramada Plaza Hotel is a full-service lodging facility containing 196 rentable
units, +/-5,330 of meeting and banquet space, a restaurant and lounge, an indoor
swimming pool, an exercise room, a game room, and appropriate back-of-the-house
facilities. The one- and four-story property opened in 1972, and is
approximately 25 years old as of the date of this appraisal. The hotel was
acquired by Ashford Financial Corporation in October, 1994. At the time of this
acquisition, the hotel was in extremely poor condition.
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HVS International, Mineola, New York Description of the Land, Improvements 12
Zoning, Taxes, and Neighborhood
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Subsequent to the acquisition, the subject property was extensively renovated in
1995 at an estimated cost of $1.4 million. In scope, this renovation included
the exterior of the building, public areas and the guestrooms. The hotel is now
judged to be in relatively good condition, and management representatives report
that all building systems are in good working order. The hotel is operated under
a license agreement with Ramada and reportedly meets the standards for lodging
facilities of that brand.
Based on our inspection and information provided by Ashford Financial
Corporation, the following table summarizes the facilities available at the
subject property.
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Zoning, Taxes, and Neighborhood
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Table 3-3 Facilities Summary
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Year Built 1972
Number of Buildings One
Entrance Porte Cochere
Guestrooms
King Beds 72 Units
Double/Doubles 122
Suites 2
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Total 196 Units
Corridors Double-loaded, interior
Food and Beverage Outlets
Cafe Fennel 100 Seats
Juliet's 120
Meeting and Banquet Rooms
Grand Ballroom 3,168 Square Feet
Hospitality 134 456
Boardroom 210 425.5
Boardroom 410 425.5
Boardroom 310 427.5
Executive Boardroom 427.5
Pool Area NA
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Total 5,330 Square Feet
Recreational & Other Amenities Indoor Swimming Pool
Exercise Room
Game Room
Parking Spaces 402
Elevators Four
Life Safety Systems Hardwired Smoke Detectors
Laundry
Washers One 55-pound, LPSO
One 75-pound, Tristar
Dryers Three 75-pound, Drymaster
Construction Details
Foundation Poured Concrete Slab on Grade;
Frost Walls; Pilings
Framing Steel; Poured-in-Place Concrete;
Concrete Block
Exterior Walls Brick on Concrete Block
Roof Steel Trusses with Concrete Deck;
Asphalt Covering
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Property Exterior
The hotel structure is situated near the center of the subject parcel. Paved
parking areas accommodating 402 vehicles are located around the periphery of the
hotel structure. Vehicular access to the subject site is provided by two
driveways, each situated on the southern corners of the site along Middlesex
Canal Park Road. After entering the site, guests proceed to the
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Zoning, Taxes, and Neighborhood
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hotel's main entrance, which is located on the southern side of the hotel; the
main entrance features a porte cochere. Service traffic can gain access to the
loading dock, which is located on the western side of the building, by entering
the site at the southwestern driveway and proceeding north to the dock.
Based on our inspection, the subject property's exterior appears to be in good
condition and appropriate for hotel use. The parking areas and landscaping are
well-maintained, and vehicular flow on the subject site is convenient.
Construction and Design
The Ramada Plaza Hotel features two wings. The one-story commercial wing located
on the western side of the hotel structure houses the hotel's restaurant,
lounge, ballroom, swimming pool, kitchen, and some back-of-the-house space.
Situated east of the commercial wing is the L-shaped, four-story guestroom
tower, which contains the hotel's lobby, guestrooms, meeting rooms,
administrative offices, exercise room, game room, and additional
back-of-the-house space. A courtyard with two concrete patio areas, a volleyball
court, and several small lawn areas is located between the two hotel wings.
Combining the two wings, the hotel structure's footprint measures approximately
48,213 square feet.
The subject property's foundation and floor structure features poured concrete
slab on grade, frost walls, and reinforced concrete pilings. The structure's
framing consists of steel columns, poured-in-place concrete, and load-bearing
concrete block; the exterior walls are constructed of brick on concrete block.
The roofs feature precast concrete slabs supported by steel trusses and covered
with asphalt. Management reports that leaks in the guestroom tower roof have
been addressed, and that the roof over the pool area is in need of flashing
work. In sum, the building structure is reported to be in good condition, and
our inspection revealed no visible signs of damage.
Lobby
Situated on the first floor in the southwestern corner of the guestroom tower
and immediately north of the main entrance, the hotel's main lobby acts as the
focal point of the hotel and provides access to other areas of the property. The
lobby features an open, airy, two-story high ceiling which enables the second
floor corridor to overlook the lobby area. As guests enter the lobby from the
main entrance, the front desk is located in front of them, along the northern
wall of the lobby. A marble walkway extends from the entrance to the front desk,
and a carpeted seating area furnished
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with traditional-style furniture is situated on each side of the walkway.
Located in the northeast corner of the lobby is the corridor leading to the
guestrooms; the corridor leading to the commercial wing is situated in the
northwest corner. The lobby's walls are finished with wall vinyl, and the
ceiling consists of square, acoustical tiles surrounding a large, rectangular,
brass lighting matrix. Decorative accents include framed artwork, artificial
floral arrangements, and a large mirror on the eastern and western walls.
Management reports that the lobby was renovated in 1995. The renovations
included new carpeting, refinishing of the marble flooring, new wall vinyl,
replacement of the furniture, and upgrades to the lighting and artwork. As a
result, the lobby is currently in good condition.
Food and Beverage Outlets
Cafe Fennel is the subject property's full-service restaurant. Located in the
southern end of the commercial wing, the restaurant seats 100 and serves
breakfast, lunch and dinner seven days a week. The restaurant, which also
features a salad bar, is directly accessible to the main kitchen. Renovations to
the restaurant in 1995 included new carpeting and wall vinyl, re-upholstering of
the furniture, and upgrades to various decorative treatments. In 1996, carpeting
was replaced in the entry and foyer area, and new artwork and accessories were
purchased.
Located adjacent to Cafe Fennel is the subject property's lounge, Juliet's. The
lounge seats 120; is equipped with a dance floor, mini-stage, six hanging
televisions, two video games, and a popcorn maker; and is open from noon to
midnight everyday. As part of the hotel's extensive renovations in 1995, the
lounge received new carpeting, re-upholstering of its bar stools and chairs, and
repainting of the walls.
Both the restaurant and lounge can be accessed from the lobby via a corridor or
from dedicated exterior entrances located on the southern side of the commercial
wing. As a result of the renovations, the restaurant and lounge are in good
condition.
Meeting and Banquet Space
The subject property's function space is located in both the commercial and
guestroom wings. The 3168-square-foot Grand Ballroom is located in the northern
end of the commercial wing. The ballroom can be partitioned into four meeting
rooms and features direct access to the hotel's kitchen. In 1995, the ballroom's
carpeting and wallcovering were replaced, new banquet chairs were purchased, and
the wall partitions were repaired. The lighting in the ballroom was replaced in
1996.
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The hotel also contains five meeting and conference rooms in the southwestern
end of the guestroom tower. The Hospitality 134 Room and the Executive Boardroom
115 are located on the first floor, while Boardrooms 210, 310, and 410 are
stacked in floors two through four. All of the meeting rooms received new
carpeting and bathroom floors in 1995; replacement of wall vinyl is slated for
1996 or 1997. Our inspection indicated the meeting rooms to be in fair
condition, although the planned refinishing of the walls should improve the
appearance of the rooms.
Should demand dictate, the pool deck and outdoor courtyard area can be used for
social functions and events. These supplementary banquet spaces are equipped
with patio furniture and are conducive for dinner and cocktail parties.
Guestrooms
The subject property features 196 guestrooms: 122 with two double beds, 72 with
king-size beds, and 2 suites. In addition, management reports that approximately
100 rooms are non-smoking, and $9,260 has been budgeted to convert several
guestrooms into handicapped-accessible rooms. We expect that the number of rooms
allocated for these two purposes will be increased or reduced depending on ADA
regulations, demand and guest response. Guestrooms in the subject property's
tower are double-loaded and are of the standard configuration, which consists of
one room with a bathroom situated to the left or right of the doorway entrance.
Guestrooms are typically furnished with the following items.
o One king or two double beds
o Armoire with remote-controlled, color television
o Desk with chair
o Nightstand with alarm clock/radio and touch-tone telephone
o Floor lamp, table lamps, and wall-mounted lamps
o Lounge chair and Ottoman
o Coffee maker
o Closet with luggage rack
o Assorted artwork
o Wall-mounted mirror
o Wall-to-wall carpeting
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o Vinyl wallcovering
o Popcorn ceiling
o Cloth drapery
Additionally, each guestroom contains a vanity immediately outside the bathroom,
and eight of the guestrooms feature refrigerators and microwave ovens. The guest
bathrooms feature a vanity countertop with a sink, a commode and a combination
shower-and-tub unit. Each bathroom is also equipped with a wall-mounted hair
dryer. Finishes include tiled floors, vinyl-and-tile wallcovering, and popcorn
ceilings.
Although the guestrooms were completely renovated in 1995, including the
replacement of all soft and hard goods as well as some case goods, additional
upgrades are planned for 1996. Capital plans call for the refinishing of
guestroom walls, the replacement of artwork, the painting of guestroom doors,
and the installation of make-up mirrors in the bathrooms.
At the time of our inspection, the subject property's guestrooms appeared to be
in relatively good condition; however, some of the furniture - such as the desk,
armoire, and nightstand - appears dated and may need replacement in the near
future.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with carpeted floors, vinyl
wallcovering, and acoustical-tiled ceilings. The carpeting and lighting in the
corridors were replaced in 1995; future plans call for the refinishing of the
walls on floors one and four in 1996, floor three in 1997, and possibly floor
two in 1998. Additionally, because the current lighting is inadequate, the
capital budget for 1996 includes the installation of additional sconces. Each
floor contains a housekeeping storage closet as well as ice and vending
machines.
Recreational Amenities
The Ramada Plaza Hotel's recreational amenities include an indoor, heated
swimming pool, an exercise room, and a game room. The swimming pool is located
in the eastern portion of the commercial wing, while the exercise room and game
room are located on the first floor of the southern portion of the guestroom
tower. The pool lining was repainted in 1996, and the renovations in 1995
included resurfacing the pool deck and purchasing new poolside furniture. The
exercise room received new carpeting and exercise equipment in 1995. All of the
subject property's recreational facilities are in good condition.
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Back-of-the-House Space
The subject property's back-of-the-house facilities are located in both of the
commercial and guestroom wings. The hotel's kitchen is conveniently situated
between the restaurant and ballroom, thus facilitating the efficient flow of
service traffic. Administrative offices are located on the first and second
floors of the southwestern corner of the guestroom wing in close proximity to
the front desk. The hotel's laundry facility is situated on the first floor of
the northwestern corner of the guestroom tower, and is conveniently close to one
of the elevators. Stacked above the laundry room are housekeeping storage rooms
on each floor. The employee cafeteria, engineering office, and boiler room are
stacked from the second through the fourth floor, respectively, in the southern
portion of the guestroom tower. Based on information provided by Ashford
Financial Corporation, the subject property's operating systems are in good
working order.
Vertical Transportation
Vertical transportation in the subject property's guestroom tower is provided by
four hydraulic elevators with capacities of 2,200 pounds. One elevator core
containing two elevators is situated in the southern end of the guestroom wing,
one is located in the mid-section of the wing, and the other is situated at the
northern end. The property does not contain an elevator designated solely for
service traffic. Supplementary vertical transportation is provided by four
stairwells, which are conveniently located in the guestroom tower.
Heating, Ventilation, and Air Conditioning
The subject property's heating, ventilation, and air conditioning (HVAC) are
provided by individual, through-the-wall, electrical units for the guestrooms
and centralized, gas- and electrical-powered HVAC units for the public areas.
The guestroom HVAC units were newly installed in 1994. The property's management
indicate that all HVAC equipment is in good working condition.
Fire Protection
The Ramada Plaza Hotel's guestrooms and public areas are equipped with hardwired
smoke detectors as well as heat detectors. The hotel's guestrooms, however, are
not serviced by a sprinkler system. Given that the guestroom tower is
four-stories tall, the lack of a sprinkler system is highly disadvantageous and
poses a life safety risk to the hotel's guests.
Security
The subject property utilizes electronic door locks. Security is further
enhanced by restricted access through peripheral entrances to the hotel. Only
guests and service staff with electronically-coded key cards can gain access to
the hotel through exterior entrances located away from the lobby area. The
hotel's front desk is fully staffed 24-hours per day.
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Asbestos
According to information provided by management representatives, there is no
asbestos present in the subject property's improvements; however, we have not
been provided with an asbestos report to confirm this assertion. The reader
should be advised that any costs associated with asbestos removal or containment
may have an unfavorable impact on the hotel's market value, and the estimate set
forth in this appraisal reflects our value conclusions prior to the deduction of
any such costs. We suggest that interested parties initiate an independent
analysis regarding current asbestos levels and the capital expenditures
necessary to remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
For the purposes of this appraisal, we have assumed that the subject property
will be maintained in its present condition throughout the assumed ten year
holding period. Specifically, it is assumed that hotel management will employ
standard preventive maintenance measures, and that a reserve for replacement
fund will be established which will fund the cost of any future necessary
capital expenditures.
ZONING
According to the City of Woburn zoning regulations and map (dated April 19,
1985), the subject property is zoned as follows.
BI - Interstate Business
Conforming uses under this zoning designation include mobile homes, public
schools, child care centers, small retail establishments, restaurants, business
and professional offices, and retail and service uses in connection with a hotel
or motel. Hotels and motels require a special use permit under the BI zoning
classification. In the case of the subject property, a special use permit was
obtained; hence, the subject property appears to conform to local zoning
regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning
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ordinances, building codes, and all other applicable regulations. Our zoning
analysis should be verified before any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property taxes can be based on the
value of the real property or the value of the personal property and the real
property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
The taxing jurisdiction governing the subject property assesses real and
personal property. The assessed value ratio is reported to be approximately 100%
of market value. A review of the assessed values of six comparable hotels
located in the Woburn taxing jurisdiction reveals the following information.
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Table 3-4 Assessed Value of Comparable Hotels
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Total Assessment Assessment per Room
Number ------------------------- ---------------------
Hotel of Rooms Land Improvements Land Improvements
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Subject Property 196 $1,816,000 $5,959,000 $9,265 $30,403
Howard Johnson 100 $1,703,000 $1,747,000 $17,030 $17,470
Crowne Plaza Hotel 345 $1,797,000 $15,192,000 $5,209 $44,035
Courtyard by Marriott 120 1,072,000 5,589,000 8,933 46,575
Red Roof Inn 159 2,845,000 2,836,000 17,893 17,836
Comfort Inn 100 852,000 2,562,000 8,520 25,620
Suisse Chalet 129 887,000 2,156,000 6,876 16,713
Source: City of Woburn Assessor's Office
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As indicated in the preceding table, the subject property's land value per room
ranked third behind that of the Red Roof Inn and the Howard Johnson. The subject
property's improvements value per room ranked third
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behind that of the Courtyard by Marriott and the Crowne Plaza Hotel. Based on
its location and the condition and level of its facilities, the assessed land
and improvement values for the Ramada Plaza Hotel appear reasonable.
The subject property's personal property assessment totals $594,300. Based on a
total real and personal property assessment of $8,369,300 and a tax rate of
$23.09 per $1,000 of assessment, the subject property's 1995/96 tax burden is
calculated as follows.
$8,369,000 X $0.02309 = $193,240
The following table illustrates the historical changes in the real and personal
property tax rates for the subject property's governing jurisdiction.
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Table 3-5 Tax Rates Applicable to the Subject Property
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Tax Rate per $1,000 Percent Change from
Year of Assessment Previous Year
-----------------------------------------------------
1991/92 $17.74
1992/93 19.39 9.3%
1993/94 20.16 4.0
1994/95 21.38 6.1
1995/96 23.09 8.0
Annual Compounded Rate 6.8%
Source: City of Woburn Assessor's Office
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Historically, the applicable tax rates have increased at an annual compounded
rate of 6.8%. For the purpose of this appraisal, and in recognition of the
potential for increases in the subject property's assessed value, we have
forecasted the subjected property's tax burden to increase at an annual rate of
6.0% for the first three projection years. From 2000 and beyond, property taxes
are projected to increase at the underlying rate of inflation of 3.5%.
Applying the projected increases to the 1995/96 tax burden yields the following
forecast of property taxes for the subject property.
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Table 3-6 Forecast of Property Tax Expense
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1997 1998 1999 Stabilized 2001
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Forecast Property Taxes (+000) $210 $222 $230 $238 $247
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood surrounding the subject property lies within the Interstate 95
(Route 128) commercial corridor and is characterized by a mix of commercial and
residential development. A number of medium-sized office parks and retail
shopping centers, which were primarily developed within the past 15 years, are
situated along this corridor. Many of the companies located in this corridor are
high technology companies, research and development firms, and defense
contractors. The areas situated further north or south of Interstate 95 consists
mostly of single-family housing and apartment complexes.
The principal commercial developments in the area are located in the vicinity of
the I-93/I-95 interchange, and are directly accessible from the subject
property. Some of the companies located at this intersection are EDS, Alpha
Industries, Inc., and Environmental Products and Services, Inc. Located less
than two miles east of the subject property is Cummings Park, which is a large
business park tenanted by a number of companies including Elliott Corporation,
Theta Systems, the Access Group, and the Professional Development Group. Another
major business park - Unicorn Park - is located less than three miles southeast
of the property and consists of a variety of small financial, insurance, and
real estate firms. In addition to the office parks located in Woburn, the areas
along Interstate 95 in the City of Burlington have experienced major commercial
development in the past ten years.
In the immediate vicinity of the subject property, Baldwin Park, which comprises
approximately 110,300 square feet of office space, is situated on the northeast
quadrant of the intersection of Main Street and Interstate 95. A retail strip
mall is located on the northwest quadrant of the same
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intersection, and immediately east of the shopping center is a newly developed
office park. The southeast quadrant of the intersection is comprised of Forest
Park and residential housing. Situated in the southwest quadrant is the subject
property, Showcase Cinema (which lies immediately west of the subject property),
Gateway Children's Learning Center to the east of the subject property, and
several residential homes along Main Street. The area to the south of the
subject property across Middlesex Canal Park Road is characterized by woodlands
sparsely developed with residential homes.
Conclusion
The neighborhood surrounding the Ramada Plaza Hotel appears well-suited for the
operation of a transient lodging facility. The subject property benefits from
its close proximity to office parks and businesses located near the I-95/I-93
interchange as well as along the I-95 commercial corridor extending from
Burlington through Woburn. Additionally, a number of shopping centers and
restaurants are situated in the area and support the operation of a transient
lodging facility.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The market area encompassing the subject property can broadly be defined as the
Boston-Worcester-Lawrence-Lowell-Brockton Metropolitan Statistical Area (MSA).
The Boston MSA, the largest in the commonwealth, with roughly 64% of the total
population, is comprised of Suffolk, Essex, Middlesex, Norfolk, Plymouth, and
Worcester Counties.
More specifically, the subject property's market area can be described as
northern suburban Boston and the State Route 128 (I-95) corridor. For the
purpose of generally defining the geographical/economic boundaries within the
area, three major market areas exist within the greater Boston metropolitan
area: the Route 128 corridor, the Route 495 corridor, and the inner urban
market. The subject property is located in close proximity to the intersection
of Route 128 and Interstate 93.
Woburn's economy is closely tied to the trends occurring both in the central
Boston area and along Route 128's high-technology area. For this reason, the
market area analysis will include relevant data for both the City of Boston and
suburban Boston. In most cases, the Boston metropolitan area is the market for
which pertinent information on the economic and demographic trends that will
affect the subject property is available.
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AREA MAP
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In the early to middle 1980s, the Massachusetts area underwent a period of
strong economic growth, often referred to as the "Massachusetts Miracle." This
period of economic success can be attributed to a boom in industrial and
high-technology manufacturing as well as to an increase in tourism and a sharing
in the rapid expansion of the national financial service industry. In the early
1990s, however, downturns in the computer and high-technology fields had a
negative impact on the area's economy. The area's economic problems were further
exacerbated by the difficulties on Wall Street and in the region's depository
institutions. As a result of the recent revival of the nation's economy as a
whole, however, Woburn's economy - as demonstrated by Smith Travel Research
statistics and the commercial developments planned for the City of Woburn - is
pulling out of its economic difficulties.
According to the Planning Department of the City of Woburn, an extensive
development project is scheduled to begin construction in 1998 or 1999, with
completion projected for the year 2001. The project is planned on a site roughly
five miles northwest of the subject property, on Commerce Way. According to city
officials, $10 million in state funds have been allocated for the project, and
170 acres of land have been zoned for business parks on the site. Moreover,
restaurants, a commuter rail stop, and a commuter parking garage are planned for
the site. The Logan Airport Bus Terminal and the train station providing access
to Boston will be relocated there as well. Plans are also being reviewed to
build an exit ramp from Interstate 93 that would lead directly into the proposed
development. Presently, the proposed site is a superfund site which is scheduled
for clean-up in 1997.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
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Population
Between 1980 and 1995, Middlesex County registered an average annual compounded
population growth of 0.2%, which was lower than the rates registered by the MSA,
the commonwealth, and the nation, which achieved rates of 0.5%, 0.4%, and 1.0%,
respectively. Between 1990 and 1995, population growth in the county, the MSA,
and the commonwealth slowed to 0.1%, 0.2%, and 0.1%, respectively, despite
increased population growth in the nation (1.1%). The slowed population growth
in Massachusetts can be attributed to the economic recession that gripped the
commonwealth in the early 1990s. Projections for the period 1995 to 2000 call
for a relatively slow rate of population growth for Middlesex County and
increased rates of growth for the MSA, the commonwealth, and the nation.
Population in Middlesex County is expected to increase by an average annual
compounded rate of 0.1%, while the MSA, commonwealth, and nation are anticipated
to increase by 0.4%, 0.3%, and 0.9%, respectively.
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial hotel demand; this observation also holds true for
the meeting and convention segment if a majority of the meetings are
business-oriented.
Retail Sales
Retail sales in Middlesex County increased at a real average annual compounded
rate of 1.1% between 1980 and 1995, a level that was lower than the gains
registered by the MSA, at 1.6%, the commonwealth, at 1.4%, and the nation, at
1.9%. Between 1990 and 1995, the county, MSA and commonwealth experienced slower
retail sales growth as a result of the regional recession. During this period,
Middlesex County registered retail sales growth of 0.3%, while the Boston MSA
and Massachusetts experienced growth of 0.6% and 0.5%, respectively. Although
retail sales growth declined in these three areas, the nation achieved a higher
rate of growth of 2.5%.
Retail sales in all four areas of evaluation are projected to increase at lower
rates between 1995 and 2000. Retail sales in Middlesex County are projected to
increase at an average annual compounded rate of 0.1%, and the MSA,
commonwealth, and nation are expected to show average annual growth in retail
sales of 0.4%, 0.2%, and 0.9%. Overall, retail sales trends indicate slowing
economic growth in the subject property's market area as well as in the nation
as a whole.
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Personal Income
Between 1980 and 1995, total personal income in Middlesex County increased at an
average annual compounded rate of 2.7%, after adjustment for inflation. Growth
in personal income in Middlesex outpaced those of the MSA, commonwealth, and
nation, which experienced growth of 2.5%, 2.3%, and 2.3%, respectively. Although
slower growth was achieved between 1990 and 1995, projections call for improved
personal income growth in the next five years. Middlesex County is anticipated
to achieve real gains of 1.6% annually between 1995 and 2000. During the same
period, personal income in the MSA, the commonwealth, and the nation is
projected to increase at rates of 1.8%, 1.6%, and 2.3%, respectively. Overall,
the projected growth in total personal income is a favorable economic indicator
for businesses in Middlesex County.
In terms of per capita personal income, projections for Middlesex County
indicate a higher level than those anticipated for the Boston MSA, Massachusetts
and the United States. This relationship suggests that Middlesex County
residents will have more money available to spend on retail goods and services
than do typical Americans. This increased spending ability contributes to a
favorable environment for local commercial establishments, and restaurants in
particular. It should be noted, however, that personal income does not take into
account cost-of-living factors; as a result, it is possible for local residents
to have higher income levels without enjoying greater affluence if the cost of
necessities is greater than it is in other parts of the nation.
Work Force Characteristics
The greatest long-term historical employment growth in Middlesex County occurred
in the services and agricultural services sectors, which achieved growth rates
of 3.6% and 3.4%, respectively between 1980 and 1995. Between 1990 and 1995,
most of the sectors in the county experienced declines, with the exception of
services, agricultural services, and transportation, communications and
utilities sectors. The greatest drops occurred in the federal military,
manufacturing, and mining sectors. Overall employment decreased between 1990 and
1995 at an average annual compounded rate of 0.4% in Middlesex County.
Employment is expected to rebound slightly between 1995 and 2000, with total
employment forecasted to increase annually at 0.3%. The strongest gains in
employment are projected to occur in the mining and services sectors, which are
forecasted to increase at rates of 3.0% and 0.9%, respectively. These moderate
employment gains reflect stabilization of the local economy
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following the dramatic expansion in the 1980s and the recession that
characterized the early 1990s.
A favorable characteristic is the diversification of the MSA economy, with
services, trade, manufacturing, and government as the largest employment sectors
in 1995. Because the local economy is not tied to the prosperity of any single
sector, the impact of business cycles is somewhat cushioned. Furthermore, the
downturn in high-technology industries that occurred in the early 1990s resulted
in a diminished dependence on this industrial sector; nevertheless, the
high-technology firms in the region remain a dominant influence on the area's
economy.
The major employers in Woburn represent a cross-section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in retail
distribution. The following table outlines some of the major employers in
Woburn.
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Table 4-1 Major Employers
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Number of
Firm Product Employees
---------------------------------------------------------
Marshalls Retail 600
W.R. Grace Retail 500
General Foods Food 200
Cummings Properties Commercial Real Estate 100
Source: Executive Office of Communities & Development
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Office Space
The City of Woburn is an industrial town containing a number of industrial parks
that are owned by both the public and private sectors. According to the Planning
Department of the City of Woburn, the 1995 vacancy rate for business parks in
the city is estimated at below 7%, an improvement over vacancy levels in recent
years that is attributable to the economic revival and the lack of new
construction. With the planned development on Commerce Way, city officials
anticipate significant growth in the future.
Highway Traffic
The subject property occupies a prominent location, proximate to the
intersection of Interstates 93 and 95. Access to the property is provided by
Interstate 95, via the Route 38 exit. The amount of traffic passing through a
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HVS International, Mineola, New York Market Area Analysis 29
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market area can have a direct impact on commercial and leisure demand and an
indirect effect on meeting demand. At the time of preparing this appraisal, no
information on the volume of traffic entering or exiting the Route 38 exit ramps
was available. According to representatives of the Massachusetts Department of
Transportation, the only information available is the daily traffic counts on
Interstate 95 in the vicinity of the intersection of Interstates 93 and 95. For
southbound Interstate 95, the latest statistics available are for 1995 and show
171,650 vehicles utilizing Interstate 95 per day.
As mentioned previously, given the proximity of Woburn to the City of Boston,
the latest developments in Boston do have some effect on the subject property's
market area. Major road construction is currently underway in the City of
Boston. The $7.7-billion Central Artery/Third Harbor Tunnel project -the largest
highway initiative in the history of the commonwealth - will replace the
six-lane, elevated section of the Central Artery (I-93) in downtown Boston with
a largely underground, eight- to ten-lane section extending from the Southeast
Expressway (I-93) to Charlestown. This project also involves extending I-90 (the
Massachusetts Turnpike) to Logan Airport via a new seaport access road that will
pass through commercial land in south Boston, and constructing a four-lane
tunnel across Boston Harbor. Completion of this project should improve access
between Logan Airport and downtown Boston dramatically. The project is expected
to double traffic capacity both through the city and across the harbor, thus
alleviating one of the most congested urban traffic areas in the nation and
providing the city with a safer and wider traffic configuration.
The Central Artery depression will create over 27 acres of new green space,
including the area abutting Atlantic Avenue. Work began in early 1994 on the
relocation of utility infrastructures and on wall construction near Quincy
Market to clear a path for the proposed project. Currently, work is occurring
below ground near South Station and Quincy Market to construct the tunnel
itself; the estimated completion date of the artery depression is late 1999.
The construction of the 1.3-mile third harbor tunnel began in 1992. According to
the Massachusetts Department of Transportation, the tunnel is currently open to
commercial traffic only, and should relieve some traffic congestion. The tunnel
is four lanes wide, doubling the present cross-harbor capacity to eight lanes.
Although it is unclear as to when the tunnel will permit passenger vehicles, it
is hoped that the tunnel will enable airport-bound drivers from the west and
south, who comprise 70% of
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HVS International, Mineola, New York Market Area Analysis 30
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airport traffic, to bypass downtown Boston and the existing Sumner and Callahan
tunnels, thereby alleviating traffic congestion to and from the city.
Airport Traffic
The main airport serving the City of Woburn is Logan International Airport,
located roughly 17 miles southeast of the subject property. The airport is
utilized by more than 40 major domestic airlines and international carriers that
offer non-stop service to the business centers of Europe and Asia. In 1995, the
airport served more than 24 million arriving and departing passengers, making it
the 10th busiest airport in the country for passenger service. The airport also
handled more than 800 million pounds of cargo and mail during the same year,
making it the 12th busiest airport in the country in terms of cargo service.
Currently, Logan International Airport is undergoing an expansion and upgrading,
which may continue until 2010. This $1.5-billion modernization program - known
as Logan 2000 - consists of roughly 30 projects, and is intended to ensure the
facility's economic contribution to the greater Boston area and the New England
region well into the 21st Century. According to the Massachusetts Port
Authority, the projects include improvements to the passenger terminals,
roadways, parking facilities, public transportation and passenger amenities.
Specifically, Terminal A will be replaced with a modern concourse to accommodate
wide-bodied jets, ultimately expanding the number of gates that can handle these
larger aircraft from 45 to 70. Terminal E will receive an expanded customs hall
to be located on what is now the Terminal E parking lot. While the old customs
facility could handle only 600 international passengers per hour, the new one
will be able to handle 3,000. In addition, a new central terminal will connect
to both the new Terminal A and the customs hall in Terminal E. The
aforementioned Boston Tunnel project will, upon completion, surface at the
airport, thereby significantly improving access to Logan.
The following table shows historical passenger counts at Logan International
Airport.
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Table 4-2 Logan International Airport Passenger Statistics
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Domestic Jet Domestic Commuter International Total Percent
Year Passengers Passengers Passengers Passengers Change
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1986 18,640,863 1,233,531 2,058,686 21,933,080 ---
1987 19,316,103 1,365,371 2,687,528 23,369,002 6.5%
1988 19,237,619 1,400,674 3,093,630 23,731,923 1.6%
1989 17,689,413 1,348,616 3,235,831 22,273,860 -6.1%
1990 17,968,410 1,550,837 3,358,944 22,878,191 2.7%
1991 16,585,359 1,771,873 3,092,911 21,450,143 -6.2%
1992 17,083,755 2,067,965 3,571,418 22,723,138 5.9%
1993 17,722,509 2,277,059 3,580,158 23,579,726 3.8%
1994 18,774,177 2,035,166 3,658,835 24,468,178 3.8%
1995 18,596,080 2,120,262 3,475,753 24,192,095 -1.1%
Average Annual Compounded Change 1986-1995 1.1%
Source: Massachusetts Port Authority, Aviation Department
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With 1.1% in average annual compounded growth, Logan International Airport has
not witnessed any strong growth in passenger count over the past ten years. The
number of domestic jet passengers has remained steady, while increases have been
achieved in the number of domestic commuter and international passengers. This
lack of strong growth is a consequence of the airport operating at capacity;
growth should occur in the future as the expansion projects at Logan
International Airport are completed.
Convention Center
The nearest convention center, the John B. Hynes Veterans Memorial Convention
Center, is located in the City of Boston. Because of the large number of hotels
located in the city, and Woburn's distance from downtown Boston, hotels in the
subject property's area do not enjoy significant overflow generated by the
convention center.
Tourist Attractions
Woburn is a historic site and contains a number of historic attractions,
including the Baldwin Mansion and the Count Rumford House. The majority of
leisure travelers who stay in Woburn, however, commute to Boston to visit the
city's numerous tourist attractions. The subject property's strategic location
along Interstate 93, which provides direct access to Boston, enhances its
ability to attract leisure travelers.
Boston is a popular destination because it offers a wide variety of visitor
attractions. The area's educational, medical, and scientific institutions are a
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HVS International, Mineola, New York Market Area Analysis 32
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magnet for scholars, researchers, and scientists. Visitors are attracted by
local sports teams and recreational activities. Numerous golf courses are
available in the outlying suburban area, and miles of Atlantic beaches are
located within a few miles of the city.
For cultural entertainment, Boston offers many museums, a planetarium, an
aquarium, and a variety of historic attractions. Visitors also enjoy symphony
concerts, opera, and the theater. The city offers ample restaurants.
Some of the most popular historic attractions include the Old South Church, the
Boston Tea Party Ship and Museum, Faneuil Hall, Quincy Market, the Boston
Massacre Site, the Old South Meeting House, the Bunker Hill Pavilion, Trinity
Church, the Paul Revere House, Boston Common, the U.S.S. Constitution, and the
Old North Church. Cultural attractions include the Museum of Fine Arts, the
Isabella Stewart Gardner Museum, and the world-famous Boston Pops. Other
attractions include Newbury Street, the John Hancock Observatory, and the New
England Aquarium.
There are 68 colleges and universities in the Boston metropolitan area with an
enrollment of approximately 275,000 students. Two out of three of the
undergraduates enrolled in Boston's most prestigious colleges and universities
(Boston College, Boston University, Harvard University, Massachusetts Institute
of Technology, Northeastern, and Tufts) come from areas outside Massachusetts.
These institutions generate strong leisure visitation during the weekends when
school is in session, and particularly during commencement and parents'
weekends. During the week, the schools and the medical hospitals host guest
lecturers, continuing educational seminars, and meetings and banquets, much of
which attract attendees who require overnight accommodations.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area has recovered from the recession of the early 1990s, with
economic growth stabilizing. With the planned development on Commerce Way, the
economy of the City of Woburn is anticipated to grow at a moderate pace.
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 33
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Middlesex County 1980-1995 1,369.4 1,404.6 0.2%
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 5,348.9 5,754.9 0.5
State of Massachusetts 1980-1995 5,748.4 6,057.9 0.4
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Middlesex County 1990-1995 1,398.3 1,404.6 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 5,688.4 5,754.9 0.2
State of Massachusetts 1990-1995 6,018.4 6,057.9 0.1
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Middlesex County 1995-2000 1,404.6 1,410.3 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 5,754.9 5,874.5 0.4
State of Massachusetts 1995-2000 6,057.9 6,137.0 0.3
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Middlesex County 1980-1995 8,547.6 10,122.4 1.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 33,570.2 42,615.7 1.6
State of Massachusetts 1980-1995 35,625.3 43,503.2 1.3
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Middlesex County 1990-1995 9,987.3 10,122.4 0.3
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 41,364.4 42,615.7 0.6
State of Massachusetts 1990-1995 42,531.0 43,503.2 0.5
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Middlesex County 1995-2000 10,122.4 10,148.1 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 42,615.7 43,528.2 0.4
State of Massachusetts 1995-2000 43,503.2 44,042.8 0.2
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Middlesex County 1980-1995 6,241.8 7,206.4 1.0
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 6,276.1 7,405.2 1.1
State of Massachusetts 1980-1995 6,197.4 7,181.2 1.0
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Middlesex County 1990-1995 7,142.4 7,206.4 0.2
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 7,271.7 7,405.2 0.4
State of Massachusetts 1990-1995 7,066.8 7,181.2 0.3
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 34
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Middlesex County 1995-2000 7,206.4 7,195.9 (0.0)
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 7,405.2 7,409.7 0.0
State of Massachusetts 1995-2000 7,181.2 7,176.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
Middlesex County 1980-1995 795.9 1,061.3 1.9
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 3,389.3 4,693.3 2.2
State of Massachusetts 1980-1995 3,709.2 5,043.2 2.1
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
Middlesex County 1990-1995 989.1 1,061.3 1.4
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 4,407.3 4,693.3 1.3
State of Massachusetts 1990-1995 4,750.3 5,043.2 1.2
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Middlesex County 1995-2000 1,061.3 1,092.5 0.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 4,693.3 4,883.0 0.8
State of Massachusetts 1995-2000 5,043.2 5,221.0 0.7
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales Per Capita
Middlesex County 1980-1995 581.2 755.5 1.8
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 633.6 815.5 1.7
State of Massachusetts 1980-1995 645.2 832.5 1.7
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales Per Capita
Middlesex County 1990-1995 707.4 755.5 1.3
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 774.8 815.5 1.0
State of Massachusetts 1990-1995 789.3 832.5 1.1
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking Place Sales Per Capita
Middlesex County 1995-2000 755.5 774.7 0.5
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 815.5 831.2 0.4
State of Massachusetts 1995-2000 832.5 850.7 0.4
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Middlesex County 1980-1995 22,135.6 32,881.8 2.7
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 80,572.5 116,135.5 2.5
State of Massachusetts 1980-1995 85,728.2 120,350.9 2.3
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 35
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income (+000,000)
Middlesex County 1990-1995 31,480.0 32,881.8 0.9
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 111,831.4 116,135.5 0.8
State of Massachusetts 1990-1995 116,527.4 120,350.9 0.6
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Middlesex County 1995-2000 32,881.8 35,681.4 1.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 116,135.5 126,766.0 1.8
State of Massachusetts 1995-2000 120,350.9 130,482.7 1.6
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Middlesex County 1980-1995 16,164.0 23,409.0 2.5
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 15,064.0 20,180.0 2.0
State of Massachusetts 1980-1995 14,913.0 19,867.0 1.9
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Middlesex County 1990-1995 22,513.0 23,409.0 0.8
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 19,660.0 20,180.0 0.5
State of Massachusetts 1990-1995 19,362.0 19,867.0 0.5
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Middlesex County 1995-2000 23,409.0 25,301.0 1.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 20,180.0 21,579.0 1.3
State of Massachusetts 1995-2000 19,867.0 21,262.0 1.4
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment - Middlesex County (+000)
Farm 1980-1995 2.8 1.6 (3.5)
Agriculture Services, Other 1980-1995 3.2 5.3 3.4
Mining 1980-1995 0.5 0.6 1.6
Construction 1980-1995 29.2 35.9 1.4
Manufacturing 1980-1995 202.4 139.3 (2.5)
Trans., Comm. & Public Utils 1980-1995 27.7 30.3 0.6
Total Trade 1980-1995 161.5 182.7 0.8
Wholesale Trade 1980-1995 43.7 51.9 1.2
Retail Trade 1980-1995 117.8 130.8 0.7
Finance, Insurance, & Real Estate 1980-1995 41.1 51.5 1.5
Services 1980-1995 229.8 392.2 3.6
Total Government 1980-1995 95.8 87.3 (0.6)
Federal Civilian Govt 1980-1995 15.0 15.3 0.1
Federal Military Govt 1980-1995 14.4 11.6 (1.5)
State & Local Govt 1980-1995 66.4 60.4 (0.6)
TOTAL 1980-1995 794.0 926.7 1.0
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 36
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment - Middlesex County (+000)
Farm 1990-1995 1.8 1.6 (1.3)
Agriculture Services, Other 1990-1995 5.1 5.3 0.5
Mining 1990-1995 0.7 0.6 (3.4)
Construction 1990-1995 38.3 35.9 (1.3)
Manufacturing 1990-1995 168.9 139.3 (3.8)
Trans., Comm. & Public Utils 1990-1995 30.0 30.3 0.2
Total Trade 1990-1995 194.3 182.7 (1.2)
Wholesale Trade 1990-1995 58.8 51.9 (2.5)
Retail Trade 1990-1995 135.5 130.8 (0.7)
Finance, Insurance, & Real Estate 1990-1995 55.5 51.5 (1.5)
Services 1990-1995 358.1 392.2 1.8
Total Government 1990-1995 94.2 87.3 (1.5)
Federal Civilian Govt 1990-1995 15.5 15.3 (0.2)
Federal Military Govt 1990-1995 14.4 11.6 (4.2)
State & Local Govt 1990-1995 64.4 60.4 (1.3)
TOTAL 1990-1995 946.9 926.7 (0.4)
Projected Employment - Middlesex County (+000)
Farm 1995-2000 1.6 1.5 (1.3)
Agriculture Services, Other 1995-2000 5.3 5.1 (0.4)
Mining 1995-2000 0.6 0.7 3.0
Construction 1995-2000 35.9 35.8 (0.0)
Manufacturing 1995-2000 139.3 134.7 (0.7)
Trans., Comm. & Public Utils 1995-2000 30.3 30.2 (0.0)
Total Trade 1995-2000 182.7 181.5 (0.1)
Wholesale Trade 1995-2000 51.9 51.4 (0.2)
Retail Trade 1995-2000 130.8 130.2 (0.1)
Finance, Insurance, & Real Estate 1995-2000 51.5 52.8 0.5
Services 1995-2000 392.2 410.4 0.9
Total Government 1995-2000 87.3 88.3 0.2
Federal Civilian Govt 1995-2000 15.3 15.4 0.1
Federal Military Govt 1995-2000 11.6 11.7 0.2
State & Local Govt 1995-2000 60.4 61.2 0.3
TOTAL 1995-2000 926.7 941.2 0.3
</TABLE>
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Subsequent sections of this economic study and appraisal will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect visitation. This analysis will provide a basis for
forecasting changes in room night demand in the subject property's area.
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HVS International, Mineola, New York Overview of External Forces 37
Affecting the U.S. Lodging Industry
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5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 38
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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HVS International, Mineola, New York Overview of External Forces 39
Affecting the U.S. Lodging Industry
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
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Year 1990 1991 1992 1993 1994 1995
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Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in
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1994 and 1995. During the low-volume years, many sellers remained on the
sidelines waiting for values to increase before placing their properties on the
market. The jump in 1994 is attributable to a number of factors, including the
greater availability of mortgage funds, a return of institutional investors to
the market, and a resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
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Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
--------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996 5.0 3.0 66.0
1997 5.5 3.5 67.0
1998 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International *Projected
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This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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Valuation Index Per Room
------------------------
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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Annual Percent Change
---------------------
<TABLE>
<CAPTION>
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20% 16% 13% 1% -10% 3% -13% 3% 28% 67%
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
Source: HVS International
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</TABLE>
On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
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is a good indication that hotel values will return to record levels in the
next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Room Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 1,537 1,855 1,884 1,884 1,884 1,884 1,884
Annual Guestroom Supply 561,005 676,903 687,660 687,660 687,660 687,660 687,660
Percent Change -- 20.7% 1.6% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 399,997 411,557 409,158 429,100 446,979 475,173 479,299
Percent Change -- 2.9% (0.6)% 4.9% 4.2% 6.3% 0.9%
Occupancy 71.3% 60.8% 59.5% 62.4% 65.0% 69.1% 69.7%
Percent Change -- (14.7)% (2.1)% 4.9% 4.2% 6.3% 0.9%
Average Rate $81.07 $78.57 $71.27 $68.47 $67.25 $69.67 $74.60
Percent Change -- (3.1)% (9.3)% (3.9)% (1.8)% 3.6% 7.1%
RevPAR $57.80 $47.77 $42.41 $42.73 $43.71 $48.14 $52.00
Percent Change -- (17.4)% (11.2)% 0.8% 2.3% 10.1% 8.0%
<CAPTION>
Year to Date
----------------------------- Average Annual Average Annual
Compounded Growth Compounded Growth
1995 1996 1989 - 1995 1992 - 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Number of Rooms 1,884 1,884
Annual Guestroom Supply 457,812 459,696
Percent Change -- 0.4% 3.5% 0.0%
Room Night Demand 315,432 326,384
Percent Change -- 3.5% 3.1% 3.8%
Occupancy 68.9% 71.0%
Percent Change -- 3.0% -0.4% 3.8%
Average Rate $72.47 $80.73
Percent Change -- 11.4% -1.4% 2.9%
RevPAR $49.93 $57.32
Percent Change -- 14.8% -1.7% 6.8%
</TABLE>
The 347-room Crowne Plaza Hotel opened in February of 1990
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
As indicated in the preceding table, room supply in the market area has remained
relatively stable in recent years. The only change to the room supply occurred
in 1990, when the 347-room Crowne Plaza opened. Because the Crowne Plaza opened
in February of 1990, an addition to the room supply of 318 rooms was reflected
in 1990, while the total 347 rooms was reflected in 1991. These additions
equated to increases in room supply of 20.7% and 1.6% in 1990 and 1991,
respectively.
With the exception of 1991, room night demand has shown increases in each year
since 1989. The 0.6% decrease in room demand in 1991 can be attributed to the
nationwide recession that occurred in that year as well as the Persian Gulf War,
both of which adversely affected travel. The market recovered in 1992, when
demand climbed by 4.9%, and continued to show growth in 1993 and 1994, when
demand increased by 4.2% and 6.3%, respectively. Although growth in demand
slowed to 0.9% in 1995, year-to-date data through August, 1996 indicates an
increase in demand of 3.0%. Between 1989 and 1995, room night demand increased
by an average annual compounded rate of 3.1%.
Although growth in demand has resulted in corresponding growth in occupancy
since 1992 (as a result of stable room supply), demand and supply dynamics
adversely impacted occupancy in 1990 and 1991. When the Crowne Plaza Hotel
opened in 1990, demand did not grow sufficiently to absorb the expansion in room
supply. As supply increased by 20.7%, demand only grew by 2.9%, resulting in a
severe decline in market occupancy of 14.7%. In 1991, occupancy decreased by
2.1% due to an 1.6% increase in room supply and a 0.6% decrease in room night
demand. Despite growth in demand in 1990 and in each year since 1992, the market
has not yet fully absorbed the addition of the Crowne Plaza Hotel, as indicated
by the 1995 market occupancy of 69.7%, which lags behind the 1989 occupancy
level of 71.3%. The overall drop in occupancy from 71.3% in 1989 to 69.7% in
1995 represents an average annual compounded decline of 0.4%. With year-to-
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date 1996 data indicating a 3.0% increase in demand, occupancy appears to be
climbing near the 1989 occupancy level.
In response to the opening of the Crowne Plaza and the resulting decline in
occupancy, as well as the recession that occurred in 1991, hotels in the market
lowered rates in an effort to gain a competitive advantage and thus boost
occupancy. Average rate in the market declined in each year between 1990 and
1993, with the greatest decrease occurring in 1991, when average rate decreased
by 9.3%. As occupancy neared the 70% level in 1994 and 1995, average rate
increased by 3.6% and 7.1%, respectively. Year-to-date data indicates an 11.4%
average rate increase over the same period in 1995. Overall, average rate in the
market declined at an average annual compounded rate of 1.4% from 1989 to 1995.
Our analysis of STR indicates that while the market suffered a severe downturn
in the early 1990s - as a result of a dilution of demand from increased supply,
the national recession, and the Gulf Crisis - the area lodging market has nearly
recovered to 1989 levels. Room demand and occupancy demonstrated fairly strong
growth between 1992 and 1995, with both increasing at an average annual
compounded rate of 3.8%. Growth in average rate has followed demand and
occupancy growth. While average rate increased at an average annual compounded
rate of 2.9% from 1992 to 1995, the strongest growth has occurred since 1995,
with average rate increasing 7.1% in 1995 and 11.4% for year-to-date August,
1996.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the Woburn area
is generated primarily by the following three market segments.
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Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 distribution of accommodated hotel room night
demand as follows.
================================================================================
Table 6-2 1996 Accommodated Room Night Demand
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1996 Annual Room Night Demand (Rounded)
-----------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 285,000 69% 22,000 50%
Meeting and Group 58,000 14 15,000 35
Leisure 71,000 17 7,000 15
--------- ------ --------- ------
Total 414,000 100% 44,000 100%
- --------------------------------------------------------------------------------
Commercial demand predominates in the local lodging market, accounting for
approximately 69% of the 1996 room night demand. Leisure demand follows the
commercial segment with a 17% share of room night demand, while meeting and
group demand contributes a relatively strong 14% of the estimated 1996 total.
The subject property's demand segmentation differs from that of the market in
the commercial and meeting and group segments. Approximately 50% of the Ramada
Plaza Hotel's occupancy is derived from the commercial segment, roughly 19%
below the market's commercial segmentation. This lower amount of commercial
demand is offset by demand generated from the meeting and group segment, which
comprises 35% of the subject property's demand, a figure substantially higher
than the market's share. This can be attributed to the subject property's strong
participation in the tour and travel group demand, which comprises approximately
28% of its room night demand. However, because negotiated room rates for tour
groups tend to be significantly lower than the rates the hotel obtains from
other types of travelers, such as business travelers, too much reliance on this
segment can adversely impact the hotel's average rate. The remainder of the
Ramada's demand is derived from the leisure segment, which comprises roughly 15%
of the subject property's demand.
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Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual businesspeople who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
Commercial demand in the subject property's market is generated by a wide
variety of corporations, with the computer industry and other high-technology
employers exhibiting some dominance. Many of the companies are located in the
business parks situated along the Interstate 95 corridor and in the vicinity of
the I-93/I-95 interchange. Firms that generate lodging demand in the area
include Sybase, IBM, USA Today, AW Chesterton, Hewlett Packard, Lahey Hitchcock
Clinic, McDonnell Douglas, and Motorola. The subject property is located in
close proximity to Cummings and Unicorn business parks, which provide a strong
commercial demand base. Also providing demand is Hanscom Air Force Base, which
has increased its work force by roughly 300 people in recent years as a result
of personnel transfers from closed federal bases. As previously noted, the area
has suffered from the effects of defense cutbacks and the nationwide recession,
which curtailed commercial activity in the area in the early 1990s. However,
indications of a full economic recovery are evident with the proposed
IndustryPlex business park development on Commerce Way and the low commercial
vacancy rates in Woburn as indicated by city planning officials.
Based on the economic and demographic data presented earlier in the Market Area
Analysis section, we estimate that commercial hotel demand in the Woburn market
rose at rates ranging from 5% to 6% annually during the early 1980s, followed by
a period of decline as a result of the dramatic downturns which affected the
high-tech industries in the region. In
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conjunction with the recovery from the national recession of the early 1990s and
slower growth in the local economy, commercial demand in the recent past has
increased more moderately. As the national and international economy continue to
improve and prominent local businesses increase their production and employment
levels, commercial hotel demand is expected to grow steadily. Smith Travel
Research estimates that total hotel demand in the competitive market rose by an
average annual compounded rate of 3.8% between 1992 and 1995. We project that
commercial demand (which comprises approximately 69% of the total market) will
increase by 3% in 1997. Thereafter, we project continued commercial demand
growth of 3% during 1998 and 1999 before stabilizing at 2% annually in
subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group demand in Woburn is generated primarily by local businesses
and includes functions such as training sessions, product announcements,
meetings, and seminars. Most of these meetings are small, and range from 15 to
20 persons. Non-commercial groups such as civic associations and professional
societies are a secondary source of meeting and group demand. These types of
meetings often range from 75 to 250 persons. Most of the meetings and group
functions in Woburn are held at local hotels. Because the subject property
offers only +/-5,330 square feet of meeting space, participation in this segment
is inherently limited. However, as mentioned earlier, the subject property does
achieve a significant amount of non-business related group demand from tour
groups visiting the Boston area.
Meeting and group patronage can be quite profitable for hotels. Although room
rates are discounted for large groups, the property benefits from the use of
meeting space and the revenues generated by in-house banquets and
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cocktail receptions. Facilities that are necessary to attract meetings and
groups include function areas with adequate space for breakout, meals, and
receptions; recreational amenities; and a sufficient number of guestrooms to
house the attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus growth
in this segment tends to lag slightly behind increases in commercial demand.
Historically, meeting and group demand in the Woburn area is estimated to have
increased at a rate slower than the overall average annual compounded rate of
3.8% achieved by the market. In light of this information and the relevant
economic and demographic trends, we estimate that meeting and group demand in
the subject property's market area will increase by a stable rate of 2%
annually.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. Leisure demand in the subject property's
market is generated by travelers who stay in Woburn to visit local attractions
or by travelers who are visiting Boston but select lodging accommodations in
Woburn. These travelers are generally drawn to the Woburn market area by its
proximity and ease of access to the many tourist
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attractions in the Boston area, together with the availability of significantly
lower rates than those charged by hotels in the city itself.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections.
Although Middlesex County residents enjoy considerable disposable income, there
are few leisure attractions in the subject property's immediate neighborhood. In
addition, the ongoing construction at Logan Airport and on Boston's highways is
anticipated to create traffic congestion and cause travel inconveniences;
therefore, we do not anticipate significant growth in this segment. In light of
these factors and the overall commercial orientation of the area, we estimate
that future leisure demand will increase at a rate of 1% throughout the
projection period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
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Table 6-3 Average Annual Compounded Market Segment Growth Rates
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Annual Compounded Growth Rate
--------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Commercial 3.0% 3.0% 3.0% 2.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 2.0 2.0 2.0
Leisure 1.0 1.0 1.0 1.0 1.0 1.0
Annual Average Growth 2.5% 2.5% 2.5% 1.8% 1.8% 1.8%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The suburban region of the greater
Boston metropolitan area is served by a wide array of lodging facilities. In
general, these hotel are situated near or within the larger concentration of
office space and/or along the major highways which serve the region. The subject
property is located along Interstate 95, less than two miles west of Interstate
93. In this location, the subject Ramada competes with other hotels situated
along Interstates 95 and 93 for demand generated by the businesses located along
these corridors.
We have identified seven properties that are considered primarily competitive
with the Ramada Plaza Hotel. Including the subject property, these primary
competitors total 1,281 rooms. Two additional lodging facilities are judged to
be only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The room count of each secondary competitor has been weighted to reflect the
degree to which it competes with the Ramada Plaza Hotel; the aggregate weighted
room count of the secondary competitors is 300 rooms.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
penetration factors; penetration is the ratio between a
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specific hotel's operating results and the corresponding data for the market. If
the penetration factor is greater than 100%, the property is performing better
than the market as a whole; conversely, if the penetration is less than 100%,
the hotel is performing at a level below the marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
------------------------ --------------------------------
Number Year Meeting Meeting Meeting Average
Property/Location of Rooms Opened Space Space/Room Comm. & Group Leisure Occupancy Rate Rev PAR
- ------------------------------------------------------------------------------------------------------------------------------------
Subject Property
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 Middlesex Canal Park 196 1974 5,330 27 50% 35% 15% 59.5% $51.45 $30.61
Crowne Plaza Hotel
2 Forbes Road 345 1990 9,300 27 70 15 15 63.0 84.00 52.92
Courtyard by Marriott
240 Mishawum Road 120 1986 Minimal N/A 80 5 15 83.0 85.00 70.55
Comfort Inn
315 Mishawum Road 100 1975 Minimal N/A 70 5 25 68.0 56.00 38.08
Red Roof Inn
19 Commerce Way 159 1974 Minimal N/A 75 5 20 73.0 55.00 40.15
Suisse Chalet
285 Mishawum Road 129 1984 Minimal N/A 70 10 20 60.0 50.00 30.00
Howard Johnson Woburn
1 Mack Road 100 1972 4,431 44 58 10 32 69.0 59.00 40.71
Howard Johnson Burlington
98 Middlesex Turnpike 132 1968 Minimal N/A 75 5 20 69.0 69.00 47.61
- ------------------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 1,281 -- -- -- 69% 13% 19% 66.8% $66.82 $44.61
Secondary Competition 300 -- -- -- 70% 19% 11% 75.0% $97.33 $73.00
Totals/Averages 1,581 -- -- -- 69% 14% 17% 68.2% $73.14 $49.91
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Estimated 1996
--------------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate Rev PAR Penetration Penetration
- ----------------------------------------------------------------------------------------------
Subject Property
<S> <C> <C> <C> <C> <C>
15 Middlesex Canal Park 61.0% $62.00 $37.82 85.0% 66.7%
Crowne Plaza Hotel
2 Forbes Road 73.0 90.00 65.70 101.7 115.9
Courtyard by Marriott
240 Mishawum Road 81.0 92.00 74.52 112.9 131.4
Comfort Inn
315 Mishawum Road 67.0 57.00 38.19 93.4 67.4
Red Roof Inn
19 Commerce Way 75.0 52.00 39.00 104.5 68.8
Suisse Chalet
285 Mishawum Road 63.0 51.00 32.13 87.8 56.7
Howard Johnson Woburn
1 Mack Road 74.0 65.00 48.10 103.1 84.8
Howard Johnson Burlington
98 Middlesex Turnpike 69.0 75.00 51.75 96.1 91.3
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Sub-Totals and Averages 70.4% $71.93 $50.61 98.0% 89.3%
Secondary Competition 78.0% $106.27 $82.89 108.7% 146.2%
Totals/Averages 71.8% $79.00 $56.70 100.0% 100.0%
- ----------------------------------------------------------------------------------------------
</TABLE>
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[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the primarily competitive hotels in the Woburn market shows a
representation of nationally recognized, franchised lodging chains. These
properties range in size from 100 to 345 rooms and their ages range from 6 to 28
years old. The market demand has a commercial orientation; in 1996, this segment
is estimated to contribute 69% of the overall occupancy. The leisure segment
comprised 19% of the total, followed by the meeting and group segment (at 13%).
In 1996, the primary competitors achieved an overall occupancy of 70.4% at an
average rate of $71.93, yielding RevPAR of $50.61.
In terms of occupancy, average rate, and RevPAR, the subject property is
underperforming in the market. The Ramada Plaza Hotel is achieving the lowest
occupancy in the competitive set of hotels; and, as indicated by the 85%
occupancy penetration, the hotel is not attaining its fair share of the market.
The subject property's average rate ranks near the middle of the competitive
set, as does its RevPAR, which is estimated to be $37.82 for 1996. This equates
to a yield penetration of 66.7% as compared to the total market, including the
secondary competitors. Excluding the secondary competitors, which are by far the
strongest performers in the market, the subject property's 1995 yield
penetration was 75.0%, which ranks fifth among the eight competitive properties.
The clear market leader is the Courtyard by Marriott, which boasts an occupancy
penetration of 112.9 and a yield penetration of 131.4. The Courtyard's leading
position in the market can be attributed to its strong brand name,
well-maintained facilities, and ability to capture higher-end commercial demand.
The Suisse Chalet is the poorest performer in the market; this property's low
occupancy and average rate can be attributed to its less recognized brand name
and its greater distance from an I-95 exit in comparison to its competitors.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Crowne Plaza Hotel Woburn
Owned and operated by Columbia Sussex Corp., the Crowne Plaza Hotel is located
on the southwest quadrant of the intersection of Interstates 93 and 95, less
than two miles east of the subject property. The Crowne Plaza Hotel is the
newest hotel property in the market and features 345 guestrooms, a restaurant,
two lounges, approximately 9,300 square feet of meeting and banquet space, an
indoor pool and spa, and a fitness center. The property has undergone minor
renovations in recent years, including the
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replacement of carpeting in the public areas and the upgrading of soft goods in
the guestrooms.
Visibility of the hotel is fair from Interstate 93, and, because the property is
situated along a side street somewhat distant from the interstate exits, access
to the property is also fair. We estimate the Crowne Plaza Hotel's 1996
occupancy and average rate to be 73% and $90. The property's demand segmentation
consists of 70% commercial demand, 15% meeting and group demand, and 15% leisure
demand. Although the Crown Plaza Hotel offers superior amenities and a higher
rate structure than the subject property, it is considered directly competitive
with the Ramada Plaza Hotel due to the significant overlap in the targeted
markets of each property, especially in the commercial segment.
Courtyard by Marriott Woburn
The Courtyard by Marriott is housed in a residential-style structure designed to
resemble an 18th-century manor house. The property is located on the northern
side of I-95 on the same road as the Suisse Chalet and the Comfort Inn. The
Courtyard is roughly one mile northeast of the subject property and features 120
guestrooms, two small meeting rooms, a dining area, and an outdoor swimming
pool. Visibility of the hotel is excellent from Interstate 95; however, the
property is located relatively far from the highway exits in comparison to its
competitors. Located directly across the street from the property are the Logan
Airport Bus Terminal and the Boston commuter train station.
As discussed earlier, the Courtyard is currently the market leader in terms of
occupancy, average rate, and RevPAR. Its 1996 occupancy and average rate is
estimated to be 81% and $92. We estimate that the property derives 80% of its
demand from the commercial segment, 15% from leisure travelers, and 5% from
meeting and group participants.
Comfort Inn Woburn
The Comfort Inn is located across from the Red Roof Inn and in close proximity
to the Suisse Chalet. The leasehold interest of the property was sold to
Innkeepers, Inc. in August of 1996 from 128 Motel Corp. The property is
scheduled to be converted to a Hampton Inn and will close in November for
renovations for a period of approximately eight months. Facilities at the
Comfort Inn include 100 rooms, a restaurant, and a lounge. Visibility of the
property is excellent from I-95 and access is highly favorable.
With the planned renovations and the re-flagging of the property to a Hampton
Inn (a very strong, highly recognized brand), the property should
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be able to improve its position in the market. The property's 1996 occupancy and
average rate are estimated to be 67% and $57, respectively. We estimate that the
property derives 70% of its room night demand from commercial travelers, 25%
from leisure demand, and 5% from group and meeting attendees.
Red Roof Inn Woburn
The Red Roof Inn is strategically located near the intersection of Interstates
93 and 95, roughly one mile north of the subject property. Formerly a Days Inn,
the property was acquired by Red Roof, Inc. in November of 1995. The new owner
subsequently renovated the property, including the removal of the restaurant and
meeting and banquet space, the refurbishing of the guestrooms, and the upgrading
of the exterior. The property features 159 guestrooms, one meeting room with a
maximum capacity of 25, and an indoor, heated swimming pool. The adjacent land
where the former restaurant and function space were situated is currently being
leased to a national restaurant company that is constructing a restaurant named
On the Border, which will feature Mexican cuisine.
Although management representatives report a loss of some corporate contract
business as a result of the conversion from a Days Inn to a Red Roof Inn, the
property is expected to maintain its leading occupancy position in the primary
competitive set of hotels. Visibility of the property from Interstate 95 is
poor, however access to the property is favorable due to its close proximity to
the interstate exit. We estimate the property's occupancy to be 75% and its
average to be $52 in 1996. In addition, we estimate that the property derives
75% of its demand from the commercial segment, followed by 20% from the leisure
segment, and 5% from the meeting and group segment.
Suisse Chalet Woburn
The Suisse Chalet is owned by Telahc Properties L.P. and managed by Suisse
Chalet International, Inc. Like the Red Roof Inn, this property is located near
the I-93/I-95 interchange. In addition, this property is situated in close
proximity to the Logan Airport Bus Terminal and the Boston commuter train
station. According to management representatives, the hotel underwent a $400,000
renovation of the guestrooms and hallways in 1994 and a $30,000 upgrading of its
lobby in 1995. As a result, the facilities - which include 129 guestrooms and an
outdoor swimming pool - are comparable to those found in the competitive hotels.
Visibility of the Suisse Chalet from Interstate 95 is excellent; however, access
to the property is less favorable than that of the Red Roof Inn and the
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Comfort Inn, both of which are situated closer to the interstate exit. The 1996
occupancy and average rate is estimated to be 63% and $51, respectively. We
estimate that 70% of the property's demand is generated from the commercial
segment, 10% from the meeting and group segment, and 20% from leisure travelers.
Howard Johnson Woburn
Owned and managed by the same entities as the subject property, the Howard
Johnson Woburn is located at the intersection of I-93 and Montvale Avenue,
approximately two miles southeast of the subject property. The property features
100 guestrooms, over 4,400 square feet of meeting and banquet space, an indoor
swimming pool, and a restaurant and lounge that are leased to Home Fries, Inc.
The property was renovated in 1994 and 1995, including the repainting of the
exterior, the upgrading of the guestrooms' soft and hard goods, the replacement
of guestroom climate control systems, and the refinishing of the function space
and public areas.
Visibility of the Howard Johnson from I-93 is favorable, and the property is
located immediately off the highway exit, rendering excellent access to the
property. The property's 1996 occupancy and average rate are estimated to be 74%
and $65, respectively. In addition, we estimate that the property derives 58% of
its demand from the commercial segment, 32% from leisure travelers, and 10% from
meeting and group attendees.
Howard Johnson Burlington
The Howard Johnson Burlington is located on Middlesex Turnpike, opposite the
Burlington Mall in the City of Burlington, approximately three miles southwest
of the subject property. The property is owned and managed by the Crystal Group
and features 132 guestrooms, a restaurant, a lounge, a swimming pool, and a
fitness room. Although the property is the oldest of the primary competitive
set, continual maintenance and upgrading of the guestrooms has allowed the
property to remain highly competitive. The current franchise agreement expires
within two years and management representatives report that it has not been
decided whether the Howard Johnson brand will be retained. Although this
property ranks as one of the top performing Howard Johnsons in the country,
ownership and management are concerned about the brand's reputation and appeal,
especially to young corporate professionals. Reportedly, HFS has offered the
property interest-free financing for funds to completely renovate the property's
interior and exterior.
Visibility of the property from Middlesex Turnpike is excellent because the
property is situated on a slope above the grade of the road. We estimate
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the property's occupancy and average rate to be 69% and $75 in 1996. The
property's demand segmentation consists of 75% commercial demand, 20% leisure,
and 5% meeting and group demand.
Secondary Competitors
The subject property's secondary competitors consist of two hotels , both of
which are full-service properties that feature higher room rate structures and
more luxurious amenities. Formerly a Days Inn, the 180-room Wyndham Garden Hotel
is located just southeast of the I-95/Middlesex Turnpike intersection, less than
three miles southwest of the subject property. The 419-room Marriott Burlington
is situated on the northern side of I-95, approximately two miles west of the
subject property.
The two full-service properties are considered to be 50% competitive with the
subject property. These secondary competitors are estimated to capture 70% of
their demand from business travelers, 19% from meeting and group attendees, and
11% from leisure travelers.
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Table 6-5 Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
Weighted ----------------------- ------------------------------
Number Percentage Number Meeting Average
Property of Rooms Competitive of Rooms Comm. & Group Leisure Occupancy Rate Rev PAR
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Wyndham Garden Hotel 180 50% 90 70% 15% 15% 69% $80.00 $55.20
Marriott Burlington 419 50 210 70 20 10 77 104.00 80.08
- -----------------------------------------------------------------------------------------------------------------
Totals/Averages 599 300 70% 19% 11% 75% $97.33 $73.00
</TABLE>
Estimated 1996
------------------------------
Average
Property Occupancy Rate Rev PAR
- -----------------------------------------------------
Wyndham Garden Hotel 68% $93.00 $63.24
Marriott Burlington 82 111.00 91.02
- -----------------------------------------------------
Totals/Averages 78% $106.27 $82.89
- --------------------------------------------------------------------------------
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Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have identified one property that is proposed or under development
in the Woburn area.
It is reported that a 101-room Sierra Suites will be developed on 827 Main
Street, just north of Interstate 95, roughly one-half mile north of the subject
property. The Woburn Planning Department reports that approval of the project
appears favorable and that construction should start in Spring of 1997, with the
opening of the hotel slated for the Summer of 1998. Based on the extended stay
nature of the Sierra Suites product, the proposed property's close proximity to
the subject property, and the likely overlap of targeted commercial markets, it
is our opinion that the Sierra Suites will be 60% competitive with the subject
property.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market has shown signs of recovery from 1992 onwards, corresponding to
the economic recovery nationwide. According to Smith Travel Research, these
growth patterns have continued through August of 1996. While supply has remained
constant over recent years, growth in demand has driven occupancy upwards,
allowing the hotels in the market to follow with average rate increases.
Based on our review of the local area, three market segments were defined within
the subject property's lodging market. Growth rates for each market segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period.
We have identified seven properties that are considered competitive with the
subject hotel. The subject property is underperforming in the market and is not
attaining its fair share in terms of occupancy, average rate, and RevPAR.
Despite the completed renovations and the recent upgrade to the Ramada Plaza
Hotel flag, it is unclear whether the subject property will be able to gain
competitive advantages over its competitors. We have also identified one
proposed property in the area; due to the nature of the proposed product and its
location, we have deemed it to be relatively competitive with the subject
property.
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7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
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Year to Date
-------------------
1994* 1995 1995 1996
---------------------------------------------------------------
Subject Property
Occupancy 59.0% 59.5% 55.3% 62.0%
Percent Change -- 0.8% -- 12.1%
Occupancy Penetration 85.4% 85.4% 80.3% 87.3%
Average Rate $48.00 $51.45 $49.02 $60.70
Percent Change -- 7.2% -- 23.8%
Average Rate Penetration 68.9% 69.0% 67.6% 75.2%
RevPAR $28.32 $30.61 $27.11 $37.63
Percent Change -- 8.1% -- 38.8%
RevPAR Penetration 58.8% 58.9% 54.3% 65.7%
Areawide (STR)
Occupancy 69.1% 69.7% 68.9% 71.0%
Percent Change -- 0.9% -- 3.0%
Average Rate $69.67 $74.60 $72.47 $80.73
Percent Change -- 7.1% -- 11.4%
RevPAR $48.14 $52.00 $49.93 $57.32
Percent Change -- 8.0% -- 14.8%
* Due to a change in ownership in October, 1994, occupancy and
average rate are estimated for calendar year 1994
- --------------------------------------------------------------------------------
As indicated in the preceding table, the subject property has been
underperforming the market. In terms of occupancy, the subject property
experienced a slight increase of 0.8% in 1995, which almost mirrored that of the
area (0.9%); year-to-date 1996 data reveals that the subject property registered
a significantly higher occupancy growth of 12.1% as compared to the market
(3.0%). The subject Ramada however, has consistently been unable to capturing
its fair share of room night demand, as indicated by occupancy penetrations of
below 100% in each year.
Like occupancy, the subject property's average rate increased at approximately
the same rate in 1995 as that of the area's. Through August, 1996, the
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subject property experienced average rate growth of 23.8% over the same period
in 1995, which was substantially higher than the 11.4% rate growth registered by
the market. Although the subject property's average penetration has hovered
below 70%, the strong increase in average rate achieved in 1996 has improved its
penetration to 75.2%.
As a result of the subject property's low occupancy and average rate, its RevPAR
has trailed that of the area's since 1994, as indicated by its RevPAR
penetration, which has been below 60% until 1996. The low occupancy, average
rate, and RevPAR penetrations exhibited by the subject Ramada reveal that the
hotel has underperformed the market since 1994. The property has, however,
benefited from the change in management and the extensive renovations completed
in 1995, as indicated by the strong increases in occupancy and average rate
experienced in 1996.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
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The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
================================================================================
Table 7-2 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand(Rounded)
-----------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 285,000 69% 22,000 50%
Meeting and Group 58,000 14 15,000 35
Leisure 71,000 17 7,000 15
------- ------- ------- -------
Total 414,000 100% 44,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. Based
on our field work and discussions with the area hotel's general managers, an
insignificant amount of latent demand exists in the Woburn lodging market.
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
Because no latent demand has been identified for the Woburn market, the total
usable room night demand consists solely of the accommodated demand. Using the
projected demand growth rates set forth in the section entitled Lodging Market
Supply and Demand Analysis, the accommodated room night demand in each market
segment is forecasted. The following table shows the projected annual change in
accommodated and usable room night demand in the subject property's competitive
market.
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Table 7-3 Total Usable Room Night Demand
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<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- ---------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Rate -- 3.0% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 285,392 293,954 302,773 311,856 318,093 324,455 330,944 337,563
Usable Latent -- 0 0 0 0 0 0 0
Growth Rate -- 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 57,503 58,653 59,826 61,023 62,243 63,488 64,758 66,053
Usable Latent -- 0 0 0 0 0 0 0
Growth Rate -- 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 71,349 72,062 72,783 73,511 74,246 74,988 75,738 76,495
Usable Latent -- 0 0 0 0 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
TOTAL DEMAND 414,244 424,669 435,382 446,390 454,582 462,931 471,440 480,111
Annual Forecasted Growth 2.5% 2.5% 2.5% 1.8% 1.8% 1.8% 1.8%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 1,581
guestrooms. As a result of the temporary closing of the Comfort Inn, the room
count will decline to 1,531. In 1998 and 1999, the weighted total of guestrooms
will increase to 1,612 and 1,642 rooms as the 101-room Sierra Suites opens. The
following table shows the projected competitive supply of available rooms and
available room nights. To calculate the annual number of available room nights,
the number of available rooms is multiplied by 365.
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Table 7-4 Available Rooms and Room Nights
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Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
-----------------------------------------------------------
Historical 414,244 577,182 72%
1997a 424,669 558,932 76
1998a 435,382 588,497 74
1999a 446,390 599,447 74
2000a 454,582 599,447 76
2001a 462,931 599,447 77
2002a 471,440 599,447 79
2003a 480,111 599,447 80
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
Based on the projected room night demand and the changes in room supply, overall
competitive occupancy is expected to increase in 1997 to 76%, before declining
to 74% in 1998 and 1999. The 4% climb in 1997 can be attributed to the temporary
closing of the Comfort Inn, which caused room supply to contract while demand
expanded. However, with the reopening of the Comfort Inn and the opening of the
proposed Sierra Suites, growth in room supply is expected to outpace growth in
demand, causing occupancy to decrease by 2%. However, as the additional rooms
are absorbed by increasing demand, occupancy should improve in 2000 and
thereafter.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate each property's position in the market based
on its ability to compete with other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market ranged from 111 to 237. The Courtyard by Marriott was the most
competitive property in the commercial market in 1996, with an index of 237;
this can be attributed to the property's superior level of amenities and strong
franchise affiliation. The Red Roof Inn and Crowne Plaza Hotel
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followed with indexes of 205 and 187, respectively. The subject property was the
least competitive hotel in the commercial segment due to its heavy reliance on
the meeting and group segment.
The competitive indexes of each property is expected to remain constant
throughout the projection period. The proposed Sierra Suites is projected to
achieve a stabilized competitive index of 190, which places it third, behind the
Courtyard and Red Roof Inn. Suite-type hotel products are typically very strong
in the commercial segment; therefore, the Sierra Suites should be able to
outperform a majority of the competitive hotels in the area. The following table
shows the projected commercial segment competitive indexes of the area's hotels.
================================================================================
Table 7-5 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 111 111 111 111 111 111 111
Crowne Plaza Hotel 187 187 187 187 187 187 187
Courtyard by Marriott 237 237 237 237 237 237 237
Comfort Inn 171 171 171 171 171 171 171
Red Roof Inn 205 205 205 205 205 205 205
Suisse Chalet 161 161 161 161 161 161 161
Howard Johnson Woburn 157 157 157 157 157 157 157
Howard Johnson Burlington 189 189 189 189 189 189 189
Secondary 199 199 199 199 199 199 199
Sierra Suites 0 0 170 180 190 190 190
- --------------------------------------------------------------------------------
Meeting and Group Segment
Due to its ability to attract a significant amount of group and tour business,
the subject property was the market leader in the meeting and group segment,
with a competitive index of 78. The competitiveness of each property in this
segment is expected to remain constant. Because suite hotels typically exhibit
minimal competitiveness in the meeting and group segment, the proposed Sierra
Suites is forecasted to stabilize at a competitive index of 15. The following
table illustrates the competitive indexes in the meeting and group segment.
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Table 7-6 Meeting and Group Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 78 78 78 78 78 78 78
Crowne Plaza Hotel 40 40 40 40 40 40 40
Courtyard by Marriott 15 15 15 15 15 15 15
Comfort Inn 12 12 12 12 12 12 12
Red Roof Inn 14 14 14 14 14 14 14
Suisse Chalet 23 23 23 23 23 23 23
Howard Johnson Woburn 27 27 27 27 27 27 27
Howard Johnson Burlington 13 13 13 13 13 13 13
Secondary 53 53 53 53 53 53 53
Sierra Suites 0 0 10 13 15 15 15
- --------------------------------------------------------------------------------
Leisure Segment
With a competitive index of 86, the Howard Johnson Woburn was the market leader
in the leisure segment. The subject property, which attained a competitive index
of 33, was the least competitive property in this segment. Like the two other
segments, no changes in the competitiveness of the hotels are expected in future
years. The proposed Sierra Suites is expected to be moderately competitive in
the leisure segment. The following table illustrates the competitive indexes in
the leisure segment.
================================================================================
Table 7-7 Leisure Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Subject Property 33 33 33 33 33 33 33
Crowne Plaza Hotel 40 40 40 40 40 40 40
Courtyard by Marriott 44 44 44 44 44 44 44
Comfort Inn 61 61 61 61 61 61 61
Red Roof Inn 55 55 55 55 55 55 55
Suisse Chalet 46 46 46 46 46 46 46
Howard Johnson Woburn 86 86 86 86 86 86 86
Howard Johnson Burlington 50 50 50 50 50 50 50
Secondary 32 32 32 32 32 32 32
Sierra Suites 0 0 35 40 45 45 45
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Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
================================================================================
Table 7-8 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
--------------------------------------------------
Commercial
Demand 293,954 302,773 311,856 318,093 324,455 330,944
Market Share 0.0785 0.0748 0.0734 0.0732 0.0732 0.0732
Capture 23,085 22,647 22,878 23,287 23,753 24,228
Meeting and Group
Demand 58,653 59,826 61,023 62,243 63,488 64,758
Market Share 0.2681 0.2639 0.2617 0.2612 0.2612 0.2612
Capture 15,727 15,790 15,973 16,258 16,583 16,915
Leisure
Demand 72,062 72,783 73,511 74,246 74,988 75,738
Market Share 0.0950 0.0896 0.0879 0.0875 0.0875 0.0875
Capture 6,846 6,518 6,462 6,500 6,565 6,630
------- ------- ------- ------- ------- -------
Total Capture 45,658 44,956 45,313 46,045 46,901 47,774
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 196 x 365) produces the
projected occupancy percentage.
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Table 7-9 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
---------------------------------------------------------
Total Room Nights
Captured/Year 45,658 44,955 45,313 46,045 46,901 47,773
Available Room Nights 71,540 71,540 71,540 71,540 71,540 71,540
Occupancy 63.82% 62.84% 63.34% 64.36% 65.56% 66.78%
Rounded 64% 63% 63% 64% 66% 67%
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
================================================================================
Table 7-10 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
--------------------------
1997 64%
1998 63
1999 63
Stabilized 64
2001 66
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 66% occupancy in 2001, we have chosen to use a stabilized level of 64%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used
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to forecast rooms revenue, which in turn provides the basis for estimating most
other income and expense categories.
Competitive Positioning
The Ramada Plaza Hotel's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the 1996 average rate and RevPAR of the subject
property and its competitors.
================================================================================
Table 7-11 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
----------------------------------------------------------
Subject Property $62.00 $37.82
Crowne Plaza Hotel 90.00 65.70
Courtyard by Marriott 92.00 74.52
Comfort Inn 57.00 38.19
Red Roof Inn 52.00 39.00
Suisse Chalet 51.00 32.13
Howard Johnson Woburn 65.00 48.10
Howard Johnson Burlington 75.00 51.75
------ ------
Average $71.93 $50.61
- --------------------------------------------------------------------------------
In 1996, the subject property achieved an average rate that was slightly higher
than those of the Comfort Inn, Red Roof Inn, and Suisse Chalet, all of which are
limited-service properties. The subject Ramada's RevPAR also achieved similar
levels as the same three limited-service hotels. As a full-service hotel, the
subject property's average rate should be positioned closer
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to those of the Howard Johnson's and Crowne Plaza's. However, because the
subject property generates a substantial amount of its demand from tour and
travel groups - a highly rate-sensitive segment - it cannot attain as high an
average rate as a property that focuses on business-related travelers, who
typically are less rate-sensitive. The subject property's management reports
that it has implemented strategies to capture more demand from the commercial
segment in an effort to alter its demand mix and attain a higher average rate.
Since a relatively substantial margin exists between the average rate of the
subject property and those of the properties ranked above it, there is upside
potential for strong increases in the subject property's average rate.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
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HVS International, Mineola, New York Projection of Occupancy and 84
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Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
As discussed earlier in this report, the market has experienced strong growth in
average rate in recent years. According to STR data, average rate in the area
increased by 3.6% in 1994 and 7.1% in 1995. Furthermore, year-to-date 1996 data
indicates a 11.4% growth in average rate over 1995. Through August 1996, the
subject property achieved an average rate increase of 23.8% as a result of the
recently completed renovations and the property's efforts to garner demand from
segments characterized by higher room rates. Although the subject property and
the area have shown strong growth in average rate in recent years, as the market
achieves a full recovery from the early 1990s, increases in average rate should
become more moderate. Based on these considerations, the following table shows
our projection of average rate increases.
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Table 7-12 Average Rate Forecast
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Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
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Positioned Base -- -- -- $62.00
1997 76% 5% to 7% 7.0% 66.35
1998 74 3 to 4 5.0 69.67
1999 74 3 to 4 4.0 72.46
2000 76 3 to 4 3.5 74.99
2001 77 3 to 4 3.5 77.62
2002 79 3 to 4 3.5 80.33
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As the above table illustrates, we have forecasted the areawide increase in
average rate at 5% to 7%. The subject property is expected to experience average
rate growth of 7% as it continues to reap benefits from its renovations and as
it increases its efforts to gain a larger share of the commercial segment. In
1998 and 1999, we project growth rates of 5.0% and 4.0%,
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respectively. In 2000 and thereafter, the subject Ramada's average rate is
expected to increase in tandem with the underlying rate of inflation of 3.5%.
The following average rates will be used to project the subject property's rooms
revenue.
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Table 7-13 Forecast of Occupancy and Average Rate
Year Ocupancy Average Rate
-------------------------------------------
1997 64% $66.35
1998 63 $69.67
1999 63 $72.46
Stabilized 64 $74.99
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8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved
property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, is its current use as a transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
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9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."10
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(1)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Ramada Plaza Hotel is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1972, and achieved an
occupancy level of in 59.5% in 1995. The following income and expense statements
were provided by the Ashford Financial Corporation, and are unaudited. Where
applicable, we have reorganized the statements in accordance with the Uniform
System of Accounts for Hotels. Because Ashford Financial Corporation acquired
the company in October of 1994, income and expense statements were not available
for the entire calendar year 1994. Consequently, our projection of income and
expense will focus primarily on the 1995 statements as well as year-to-date
statements for 1996 and 1995.
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Table 10-1 Historical Operating Performance
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<TABLE>
<CAPTION>
Calendar Year Ending: 1995 1994
Total Rooms: 196 196
Occupied Rooms: 40,380 8,307
Complimentary Rooms: 2,220 300
Days Open: 365 90
Occupancy: 59.5% Amount per Amount per 48.8% Amount per Amount per
Average Rate: $51.45 Percentage Available Occupied $54.62 Percentage Available Occupied
(+000) of Revenue Room Room (+000) of Revenue Room Room
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rooms $ 2,078 64.4% $ 10,600 $51.45 $454 60.8% $2,315 $54.62
Food 810 25.1 4,132 20.06 171 22.9 872 20.58
Beverage 254 7.9 1,298 6.30 86 11.6 441 10.41
Telephone 67 2.1 340 1.65 26 3.5 134 3.16
Other Income 15 0.5 78 14.54 9 1.2 47 1.10
Total 3,224 100.0 16,448 79.84 747 100.0 3,809 89.87
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DEPARTMENTAL EXPENSES
Rooms 587 28.3 2,995 14.54 115 25.3 586 13.83
Food & Beverage 793 74.5 4,045 19.63 190 73.9 971 22.91
Telephone 41 61.5 209 1.02 11 41.7 56 1.32
Other Income 4 23.3 18 0.09 1 9.9 5 0.11
Total 1,424 44.2 7,267 35.28 317 42.5 1,617 38.16
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DEPARTMENTAL INCOME 1,799 55.8 9,181 44.56 430 57.5 2,191 51.71
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OPERATING EXPENSES
Administrative & General 426 13.2 2,172 10.54 83 11.1 421 9.94
Management Fee 97 3.0 494 2.40 22 3.0 114 2.70
Marketing 216 6.7 1,104 5.36 33 4.4 166 3.93
Franchise Fees 61 1.9 311 1.51 13 1.7 66 1.56
Property Oper. & Maint 222 6.9 1,134 5.51 48 6.4 245 5.78
Energy 353 11.0 1,803 8.75 67 8.9 340 8.03
Total 1,376 42.7 7,018 34.06 265 35.5 1,353 31.93
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HOUSE PROFIT 424 13.1 2,163 10.50 164 22.0 838 19.78
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FIXED EXPENSES
Property Taxes 234 7.3 1,195 5.80 44 5.9 223 5.27
Insurance 47 1.5 240 1.16 12 1.7 64 1.50
Reserve for Replacement 129 4.0 658 3.19 0 0.0 0 0.00
Rent 86 2.7 439 2.13 22 2.9 110 2.59
Total 496 15.5 2,532 12.29 78 10.5 397 9.36
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NET INCOME ($ 72) -2.4 (369) ($1.79) $ 87 11.5 $ 441 $10.42
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Table 10-2 Historical Operating Performance
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<TABLE>
<CAPTION>
Calendar Year Ending: Year-to-Date through August, 1996 Year-to-Date through August, 1995
Total Rooms: 196 196
Occupied Rooms: 28,621 24,953
Complimentary Rooms: 1,047 1,509
Days Open: 244 244
Occupancy: 62.0% Amount per Amount per 55.3% Amount per Amount per
Average Rate: $60.70 Percentage Available Occupied $49.02 Percentage Available Occupied
(+000) of Revenue Room Room (+000) of Revenue Room Room
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,737 64.0% $8,864 $60.70 $1,223 66.3% $6,241 $49.02
Food 637 23.4 3,248 22.24 449 24.3 2,289 17.98
Beverage 232 8.6 1,185 8.11 134 7.2 682 5.35
Telephone 67 2.5 340 2.33 34 1.8 173 1.36
Other Income 42 1.6 216 1.48 5 0.3 26 0.20
Total 2,715 100.1 13,853 94.87 1,844 99.9 9,410 73.91
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DEPARTMENTAL EXPENSES
Rooms 467 26.9 2,383 16.32 347 28.4 1,771 13.91
Food & Beverage 635 73.1 3,239 22.18 447 76.7 2,279 17.90
Telephone 29 43.6 148 1.02 25 74.8 129 1.02
Other Income 36 85.9 186 1.27 2 34.8 9 0.07
Total 1,167 43.0 5,956 40.78 821 44.5 4,188 32.90
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DEPARTMENTAL INCOME 1,548 57.1 7,897 54.08 1,024 55.4 5,222 41.02
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OPERATING EXPENSES
Administrative & General 274 10.1 1,398 9.58 279 15.1 1,425 11.19
Management Fee 82 3.0 417 2.86 55 3.0 282 2.22
Marketing 171 6.3 870 5.96 126 6.8 643 5.05
Franchise Fees 53 1.9 269 1.84 36 1.9 183 1.44
Property Oper. & Maint 158 5.8 807 5.53 147 8.0 750 5.89
Energy 335 12.3 1,709 11.70 239 12.9 1,218 9.57
Total 1,072 39.4 5,471 37.46 882 47.7 4,501 35.35
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HOUSE PROFIT 476 17.7 2,426 16.62 141 7.7 721 5.67
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FIXED EXPENSES
Property Taxes 141 5.2 719 4.92 140 7.6 715 5.62
Insurance 33 1.2 167 1.15 33 1.8 167 1.31
Reserve for Replacement 109 4.0 556 3.81 74 4.0 376 2.96
Rent 56 2.1 285 1.95 61 3.3 311 2.45
Total 338 12.5 1,727 11.83 308 16.7 1,570 12.33
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NET INCOME $ 137 5.2 $ 699 $ 4.79 ($ 166) -9.0 ($ 849) ($6.66)
==============================================================================================================================
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Comparable Operating Statements
These historical income and expense statements show that the subject property
has significantly improved its operational performance since 1995. Although the
Ramada lost money in 1995, year-to-date statements show that the property has
attained a net income of $137,000 through August, 1996. The reversal in
performance can be attributed to management's ability to substantially increase
income while controlling expenses. After a full year of becoming acquainted with
the hotel and the Woburn lodging market, management appears to be approaching
stabilized efficiencies in its second full year of operation.
Based on the year-to-date statements through August, 1995 and 1996, the subject
property's total revenue increased from $1,844,000 in 1995 to $2,715,000 in 1996
as a result of significant improvement in both occupancy and average rate; this
equates to an increase of roughly 47%. Contributing to this increase in total
revenue are a rooms revenue increase of 42% and combined food and beverage
revenue growth of 49%. Additionally, telephone revenue increased by 97%, while
other income climbed from $5,000 in 1995 to $42,000 in 1996.
With substantial growth in occupancy, average rate, and revenue, the subject
property has taken advantage of economies of scale. Despite increases in
departmental expenses on a per occupied room basis, rooms, food and beverage,
and telephone departmental expenses as a percentage of departmental revenue
declined from 1995 to 1996. Rooms departmental expense decreased from 28.4% of
rooms revenue in 1995 to 26.9% in 1996. Food and beverage expense dropped by
3.6%, while telephone expense declined from 74.8% of telephone revenue in 1995
to 43.6% in 1996. In total, departmental expenses as a percentage of total
revenue decreased from 44.5% in 1995 to 43.0% in 1996.
Similarly, operating expenses as a percentage of total revenue decreased
significantly from 47.7% in 1995 to 39.4% in 1996. Although this drop in the
operating expense ratio is predominantly a result of a strong revenue increase,
it does indicate that management has been effective in controlling expenses and
improving its profit margins. The most significant decreases in operating
expenses occurred in administrative and general expenses, which decreased from
15.1% of total revenue in 1995 to 10.1% in 1996, and property operations and
maintenance expenses, which declined from 8.0% to 5.8%. It is important to note
that the subject property's energy expense is remarkably higher than those of
comparable properties, which range from 4% to 8% of total revenue. Although
efforts were made to discover the cause of the
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extraordinary energy expenses, none were found; furthermore, an analysis
provided by Ashford Financial Corporation indicates that future energy expenses
will remain higher than those of comparable hotels. Consequently, our projection
of energy expense will be based on the subject property's historical levels.
Overall, as a result of significant revenue growth and enhanced operating
efficiency, the subject property attained a year-to-date 1996 net income level
of $137,000 in comparison to a net loss of $166,000 during the same period in
1995. Based on the Ramada Plaza Hotel's recent trends in operating performance,
we expect the property to achieve additional operating efficiencies in the
immediate future.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
59.5%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
Calendar Year Ending: 1995
Number of Rooms: 196
Occupancy: 59.5%
Average Rate: $51.45 Percent of Amount per Amount per
Occupied Rooms: 40,380 Total Available Occupied
(+000) Revenue Room Room
- --------------------------------------------------------------------------------
Revenue:
Rooms $2,078 58.8% $10,600 $51.45
Food 956 27.1 4,876 23.67
Beverage 343 9.7 1,752 8.51
Telephone 100 2.8 511 2.48
Other Income 54 1.5 276 1.34
Total Revenue $3,531 100.0 $18,015 $87.44
- --------------------------------------------------------------------------------
Expenses:
Rooms* $675 32.5% $3,444 $16.72
Food & Beverage* 951 73.2 4,854 23.56
Telephone* 53 53.3 272 1.32
Other Income* 4 6.6 18 0.09
Administrative & General 426 12.1 2,172 10.54
Management Fee 106 3.0 540 2.62
Marketing 216 6.1 1,104 5.36
Franchise Fees 83 2.4 424 2.06
Property Oper. & Maint 212 6.0 1,081 5.25
Energy 405 11.5 2,066 10.03
Property Taxes 187 5.3 953 4.62
Insurance 69 1.9 350 1.70
Reserve for Replacement 141 4.0 721 3.50
Total Expenses $3,528 99.9% $17,999 $87.36
- --------------------------------------------------------------------------------
Net Income $3 0.1% $16 $0.08
================================================================================
* Departmental expense ratios are expressed
as a percentage of departmental revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
---- ----
Average 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-6 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
-------------------------------
1997 7.0%
1998 5.0
1999 4.0
2000 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Another exception is the projected rate of growth for the Ramada Plaza Hotel's
property taxes. As discussed earlier in this report, property taxes are
forecasted to increase by 6.0% in the first three projection years. From 2000
and beyond, property taxes are expected to increase in tandem with the
underlying rate of inflation of 3.5%.
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1995 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-7 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Forecast Occupancy Percentage 64.0% 63.0% 63.0% 64.0% 64.0%
Forecast Average Rate $66.35 $69.67 $72.46 $74.99 $77.62
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-8 Forecast of Rooms Revenue (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Forecast
Calendar Years Projected Average Number Days in Rooms
Ending: Occupancy Room Rate of Units in Year Revenue
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 64.0 X $66.35 X 196 X 365 = $3,038
1998 63.0 X 69.67 X 196 X 365 = 3,140
1999 63.0 X 72.46 X 196 X 365 = 3,266
Stabilized 64.0 X 74.99 X 196 X 365 = 3,434
2001 64.0 X 77.62 X 196 X 365 = 3,554
</TABLE>
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Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue.
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Although food revenue varies directly with changes in occupancy, the small
portion generated by banquet sales and outside capture is relatively fixed.
Food revenue was projected based on this relationship between the fixed and
variable components. The following table shows the projected food revenue and
several units of comparison that can be used to check the reasonableness of the
forecast.
================================================================================
Table 10-9 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Food Revenue (+000) $1,081 $1,106 $1,145 $1,199 $1,241
Percent of Total Revenue 23.1% 22.9% 22.9% 22.8% 22.8%
Per Available Room $5,517 $5,642 $5,840 $6,117 $6,331
Per Occupied Room $23.61 $24.54 $25.40 $26.19 $27.10
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage Revenue
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges.
Based on an analysis of comparable lodging facilities, beverage revenue is
estimated to average approximately 35.9% of food revenue. Thus, beverage revenue
is projected by multiplying the projected food revenue by 35.9%. The following
table illustrates the forecast of beverage revenue.
================================================================================
Table 10-10 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Beverage Revenue (+000) $388 $397 $411 $431 $446
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable
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telephone departments. State-of-the-art equipment is capable of least-cost
routing, automatic price billing, and posting telephone charges to guest folios.
Hotels can select among various long-distance services, and can also work with
any one of a number of Alternative Operator Services (AOS). These systems route
and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-11 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- -------------------------------------------------------------------------------
Total Telephone Revenue (+000) $ 114 $ 117 $ 121 $ 127 $ 131
Percent of Total Revenue 2.4% 2.4% 2.4% 2.4% 2.4%
Amount Per Available Room $ 584 $ 596 $ 616 $ 647 $ 670
Amount Per Occupied Room $2.49 $2.60 $2.68 $2.77 $2.86
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
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o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
p Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-12 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- -------------------------------------------------------------------------------
Total Other Income (+000) $ 59 $ 61 $ 63 $ 66 $ 68
Percent of Total Revenue 1.3% 1.3% 1.3% 1.2% 1.3%
Amount Per Available Room $ 302 $ 311 $ 322 $ 335 $ 347
Amount Per Occupied Room $1.29 $1.35 $1.40 $1.44 $1.49
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
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Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-13 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Rooms Expense (+000) $ 745 $ 766 $ 793 $ 826 $ 855
Percent of Rooms Revenue 24.5% 24.4% 24.3% 24.0% 24.1%
Amount per Available Room $3,800 $3,908 $4,044 $4,214 $4,361
Amount per Occupied Room $16.64 $17.37 $17.99 $18.46 $19.09
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. After considering the fixed and variable components, we
forecast the subject property's food and beverage expense as follows.
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Table 10-14 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 Stabilized 2001
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total F&B Expense (+000) $1,045 $1,075 $1,113 $1,159 $1,199
Percent of Food and Beverage Revenue 71.1% 71.6% 71.5% 71.1% 71.1%
Amount per Available Room $5,330 $5,487 $5,680 $5,912 $6,118
Amount per Occupied Room $22.82 $23.85 $24.69 $25.31 $26.19
</TABLE>
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed.
The following table illustrates our forecast of telephone expense.
================================================================================
Table 10-15 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Telephone Expense (+000) $ 59 $ 60 $ 62 $ 65 $ 67
Percent of Telephone Revenue 51.4% 51.6% 51.6% 51.2% 51.3%
Amount per Available Room $ 299 $ 308 $ 319 $ 332 $ 343
Amount per Occupied Room $1.29 $1.33 $1.38 $1.42 $1.46
- --------------------------------------------------------------------------------
Other Income Expense
Other income expense consists of costs associated with other income, and is
dependent on the nature of the revenue. For example, if a hotel leases its gift
shop to an outside operator, the expenses are limited to items such as rental
fees and commissions. If the property operates its own gift shop, both revenues
and expenses will be higher, and the hotel is responsible for the cost of goods
sold, payroll, and so forth. Using a fixed and variable forecasting model, we
project the subject property's other income expense as follows.
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Table 10-16 Forecast of Other Income Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Other Income Expense (+000) $ 4 $ 4 $ 4 $ 4 $ 4
Percent of Other Income Revenue 6.5% 6.5% 6.5% 6.4% 6.5%
Amount per Available Room $ 20 $ 20 $ 21 $ 22 $ 22
Amount per Occupied Room $0.09 $0.09 $0.09 $0.09 $0.09
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
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Table 10-17 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Administrative & General Exp. (+000) $ 488 $ 505 $ 523 $ 544 $ 563
Percentage of Total Revenue 10.4% 10.5% 10.4% 10.3% 10.3%
Amount per Available Room $2,490 $2,577 $2,668 $2,776 $2,872
Amount per Occupied Room $10.67 $11.20 $11.60 $11.88 $12.30
</TABLE>
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Hospitality, Inc.. According to
the management agreement between Woburn Massachusetts Hotel II Limited
Partnership and Remington Hospitality, Inc., a fee of 3% of gross revenues is
due to the management company. Based on our review of the current market for
management contracts, we are of the opinion that this fee is consistent with
prevailing market terms. Applying this management fee structure to the
projection of total revenue yields the following forecast of the subject
property's management fee.
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Table 10-18 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Management Fee Expense (+000) $140 $145 $150 $158 $163
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a fixed
and variable component model.
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Table 10-19 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Marketing Expense (+000) $ 248 $ 257 $ 266 $ 277 $ 286
Percentage of Total Revenue 5.3% 5.3% 5.3% 5.3% 5.3%
Amount per Available Room $1,267 $1,309 $1,356 $1,411 $1,460
Amount per Occupied Room $ 5.42 $ 5.69 $ 5.90 $ 6.04 $ 6.25
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Ramada for the use of the
company's name, trade marks, and service marks. The following table illustrates
the projection of the subject property's franchise fee.
================================================================================
Table 10-20 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Franchise Fees Expense (+000) $122 $126 $131 $137 $142
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-
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quality building materials and construction methods generally reduces the need
for maintenance expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-21 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 Stabilized 2001
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Property Oper. & Maint. Exp. (+000) $243 $251 $260 $271 $280
Percentage of Total Revenue 5.2% 5.2% 5.2% 5.2% 5.2%
Amount per Available Room $1,240 $1,282 $1,328 $1,382 $1,430
Amount per Occupied Room $5.31 $5.57 $5.78 $5.91 $6.12
</TABLE>
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
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Table 10-22 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Total Energy Expense (+000) $444 $459 $476 $493 $511
Percentage of Total Revenue 9.5% 9.5% 9.5% 9.4% 9.4%
Amount per Available Room $2,266 $2,344 $2,427 $2,517 $2,605
Amount per Occupied Room $9.70 $10.19 $10.56 $10.77 $11.15
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-23 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Forecast Property Taxes (+000) $210 $222 $230 $238 $247
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $210,000 in 1997. In subsequent years, this amount is assumed
to increase in tandem with inflation. The following table outlines our
projection of insurance expense.
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Table 10-24 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Forecast Insurance Expense (+000) $73 $76 $79 $81 $84
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-25 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 1999 Stabilized 2001
- --------------------------------------------------------------------------------
Reserve for Replacement Exp. (+000) $187 $193 $200 $210 $218
- --------------------------------------------------------------------------------
Ground Rent
Because Ashford Financial Corporation currently holds the leasehold interest in
the subject property, the Ramada Plaza Hotel has historically incurred ground
rent. However, as noted earlier, a purchase option exists in the ground lease
involving the subject property whereby the lessee, or assignee
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of the lease, can purchase the real property for $450,000 if exercised after
March 1, 1992. Representatives of Ashford Financial Corporation has reported
that the option will be exercised prior to the date of value of this appraisal.
Consequently, we have omitted ground rent in our projection of income and
expense.
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning January 1, 1997, and are
expressed in inflated dollars for each year.
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Table 10-26 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Ramada Plaza Hotel, Woburn,
Massachusetts (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
-----------------------------------
Calendar Years Ending: 1995 1997
Number of Rooms: 196 196
Occupancy: 59.5% 64.0%
Average Rate: $51.45 $66.35
Days Open: 365 365
Occupied Rooms: 40,380 % Gross PAR POR 45,786 % Gross PAR POR
- ----------------------------------------------------------------------------------------------------------
REVENUE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rooms $2,078 64.4% $10,600 $51.45 $3,038 64.9% $15,500 $66.35
Food 810 25.1 4,132 20.06 1,081 23.1 5,515 23.61
Beverage 254 7.9 1,298 6.30 388 8.3 1,980 8.47
Telephone 67 2.1 340 1.65 114 2.4 582 2.49
Other Income 15 0.5 78 0.38 59 1.3 301 1.29
Total Revenues 3,224 100.0 16,448 79.84 4,680 100.0 23,878 102.22
- ----------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 587 28.3 2,995 14.54 762 25.1 3,888 16.64
Food & Beverage 793 74.5 4,045 19.63 1,045 71.1 5,332 22.82
Telephone 41 61.5 209 1.02 59 51.8 301 1.29
Other Income 4 23.3 18 0.09 4 6.8 20 0.09
Total Dept. Expenses 1,424 44.2 7,267 35.28 1,870 40.0 9,541 40.84
- ----------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,799 55.8 9,181 44.56 2,810 60.0 14,337 61.37
- ----------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 426 13.2 2,172 10.54 488 10.4 2,490 10.66
Management Fee 97 3.0 494 2.40 140 3.0 714 3.06
Marketing 216 6.7 1,104 5.36 248 5.3 1,265 5.42
Franchise Fees 61 1.9 311 1.51 122 2.6 622 2.66
Property Oper. & Maint 222 6.9 1,134 5.51 243 5.2 1,240 5.31
Energy 353 11.0 1,803 8.75 444 9.5 2,265 9.70
Total Operating Expenses 1,376 42.7 7,018 34.06 1,685 36.0 8,597 36.80
- ----------------------------------------------------------------------------------------------------------
HOUSE PROFIT 424 13.1 2,163 10.50 1,125 24.0 5,740 24.57
- ----------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 234 7.3 1,195 5.80 210 4.5 1,071 4.59
Insurance 47 1.5 240 1.16 73 1.6 372 1.59
Reserve for Replacement 129 4.0 658 3.19 187 4.0 954 4.08
Rent 86 2.7 439 2.13 0 0.0 0 0.00
Total 496 15.5 2,532 12.29 470 10.1 2,398 10.27
- ----------------------------------------------------------------------------------------------------------
NET INCOME ($72) (2.4) (369) ($1.79) $655 13.9 $3,342 $14.31
==========================================================================================================
Food/Rooms 39.0% 35.6%
Beverage/Food 31.4% 35.9%
Telephone/Rooms 3.2% 3.8%
Other Income/Rooms 0.7% 1.9%
<CAPTION>
Calendar Years Ending: 1998 1999
Number of Rooms: 196 196
Occupancy: 63.0% 63.0%
Average Rate: $69.67 $72.46
Days Open: 365 365
Occupied Rooms: 445,070 % Gross PAR POR 45,070 % Gross PAR POR
- -------------------------------------------------------------------------------------------------------
REVENUE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rooms $3,140 65.2% $16,020 $69.67 $3,266 65.2% $16,663 $72.46
Food 1,106 22.9 5,643 24.54 1,145 22.9 5,842 25.40
Beverage 397 8.2 2,026 8.81 411 8.2 2,097 9.12
Telephone 117 2.4 597 2.60 121 2.4 617 2.68
Other Income 61 1.3 311 1.35 63 1.3 321 1.40
Total Revenues 4,821 100.0 24,597 106.97 5,006 100.0 25,541 111.07
- -------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 783 24.9 3,995 17.37 811 24.8 4,138 17.99
Food & Beverage 1,075 71.5 5,485 23.85 1,113 71.5 5,679 24.69
Telephone 60 51.3 306 1.33 62 51.2 316 1.38
Other Income 4 6.6 20 0.09 4 6.3 20 0.09
Total Dept. Expenses 1,922 39.9 9,806 42.64 1,990 39.8 10,153 44.15
- -------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,899 60.1 14,791 64.32 3,016 60.2 15,388 66.92
- -------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 505 10.5 2,577 11.20 523 10.4 2,668 11.60
Management Fee 145 3.0 740 3.22 150 3.0 765 3.33
Marketing 257 5.3 1,311 5.70 266 5.3 1,357 5.90
Franchise Fees 126 2.6 643 2.80 131 2.6 668 2.91
Property Oper. & Maint 251 5.2 1,281 5.57 260 5.2 1,327 5.77
Energy 459 9.5 2,342 10.18 476 9.5 2,429 10.56
Total Operating Expenses 1,743 36.1 8,893 38.67 1,806 36.0 9,214 40.07
- -------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,156 24.0 5,898 25.65 1,210 24.2 6,173 26.85
- -------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 222 4.6 1,133 4.93 230 4.6 1,173 5.10
Insurance 76 1.6 388 1.69 79 1.6 403 1.75
Reserve for Replacement 193 4.0 985 4.28 200 4.0 1,020 4.44
Rent 0 0.0 0 0.00 0 0.0 0 0.00
Total 491 10.2 2,505 10.89 509 10.2 2,597 11.29
- -------------------------------------------------------------------------------------------------------
NET INCOME $665 13.8 $3,393 $14.75 $701 14.0 $3,577 $15.55
=======================================================================================================
Food/Rooms 35.2% 35.1%
Beverage/Food 35.9% 35.9%
Telephone/Rooms 3.7% 3.7%
Other Income/Rooms 1.9% 1.9%
<CAPTION>
Calendar Years Ending: Stabilized 2001
Number of Rooms: 196 196
Occupancy: 64.0% 64.0%
Average Rate: $74.99 $77.62
Days Open: 365 365
Occupied Rooms: 45,786 % Gross PAR POR 45,786 % Gross PAR POR
- ----------------------------------------------------------------------------------------------------------
REVENUE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rooms $3,434 65.3% $17,520 $75.00 3,554 65.3% $18,133 $77.62
Food 1,199 22.8 6,117 26.19 1,241 22.8 6,332 27.10
Beverage 431 8.2 2,199 9.41 446 8.2 2,276 9.74
Telephone 127 2.4 648 2.77 131 2.4 668 2.86
Other Income 66 1.3 337 1.44 68 1.3 347 1.49
Total Revenues 5,257 100.0 26,821 114.82 5,440 100.0 27,755 118.81
- ----------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 845 24.6 4,311 18.46 874 24.6 4,459 19.09
Food & Beverage 1,159 71.1 5,913 25.31 1,199 71.1 6,117 26.19
Telephone 65 51.2 332 1.42 67 51.1 342 1.46
Other Income 4 6.1 20 0.09 4 5.9 20 0.09
Total Dept. Expenses 2,073 39.4 10,577 45.28 2,144 39.4 10,939 46.83
- ----------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 3,184 60.6 16,245 69.54 3,296 60.6 16,816 71.99
- ----------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 544 10.3 2,776 11.88 563 10.3 2,872 12.30
Management Fee 158 3.0 806 3.45 163 3.0 832 3.56
Marketing 277 5.3 1,413 6.05 286 5.3 1,459 6.25
Franchise Fees 137 2.6 699 2.99 142 2.6 724 3.10
Property Oper. & Maint 271 5.2 1,383 5.92 280 5.1 1,429 6.12
Energy 493 9.4 2,515 10.77 511 9.4 2,607 11.16
Total Operating Expenses 1,880 35.8 9,592 41.06 1,945 35.7 9,923 42.48
- ----------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,304 24.8 6,653 28.48 1,351 24.9 6,893 29.51
- ----------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 238 4.5 1,214 5.20 247 4.5 1,260 5.39
Insurance 81 1.5 413 1.77 84 1.5 429 1.83
Reserve for Replacement 210 4.0 1,071 4.59 218 4.0 1,112 4.76
Rent 0 0.0 0 0.00 0 0.0 0 0.00
Total 529 10.0 2,699 11.55 549 10.0 2,801 11.99
- ----------------------------------------------------------------------------------------------------------
NET INCOME $775 14.8 $3,954 $16.93 $802 14.9 $4,092 $17.52
==========================================================================================================
Food/Rooms 34.9% 34.9%
Beverage/Food 35.9% 35.9%
Telephone/Rooms 3.7% 3.7%
Other Income/Rooms 1.9% 1.9%
</TABLE>
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Table 10-27 Ten-Year Forecast of Income and Expense, Ramada Plaza Hotel,
Woburn, Massachusetts (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years Ending: 1997 1998 1999 2000 2001 2002
--------------- --------------- --------------- --------------- --------------- ---------------
Number of Rooms: 196 196 196 196 196 196
Occupied Rooms: 45,786 45,070 45,070 45,786 45,786 45,786
Occupancy: 64.0% % of 63.0% % of 63.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $66.35 Gross $69.67 Gross $72.46 Gross $74.99 Gross $77.62 Gross $80.33 Gross
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,038 64.9% $3,140 65.2% $3,266 65.2% $3,434 65.3% $3,554 65.3% $3,678 65.4%
Food 1,081 23.1 1,106 22.9 1,145 22.9 1,199 22.8 1,241 22.8 1,284 22.8
Beverage 388 8.3 397 8.2 411 8.2 431 8.2 446 8.2 461 8.2
Telephone 114 2.4 117 2.4 121 2.4 127 2.4 131 2.4 136 2.4
Other Income 59 1.3 61 1.3 63 1.3 66 1.3 68 1.3 70 1.2
Total 4,680 100.0 4,821 100.0 5,006 100.0 5,257 100.0 5,440 100.0 5,629 100.0
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL EXPENSES
Rooms 762 25.1 783 24.9 811 24.8 845 24.6 874 24.6 905 24.6
Food & Beverage 1,045 71.1 1,075 71.5 1,113 71.5 1,159 71.1 1,199 71.1 1,241 71.1
Telephone 59 51.8 60 51.3 62 51.2 65 51.2 67 51.1 70 51.5
Other Income 4 6.8 4 6.6 4 6.3 4 6.1 4 5.9 5 7.1
Total 1,870 40.0 1,922 39.9 1,990 39.8 2,073 39.4 2,144 39.4 2,221 39.5
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENTAL INCOME 2,810 60.0 2,899 60.1 3,016 60.2 3,184 60.6 3,296 60.6 3,408 60.5
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
OPERATING EXPENSES
Administrative & General 488 10.4 505 10.5 523 10.4 544 10.3 563 10.3 583 10.4
Management Fee 140 3.0 145 3.0 150 3.0 158 3.0 163 3.0 169 3.0
Marketing 248 5.3 257 5.3 266 5.3 277 5.3 286 5.3 296 5.3
Franchise Fees 122 2.6 126 2.6 131 2.6 137 2.6 142 2.6 147 2.6
Property Oper. & Maint 243 5.2 251 5.2 260 5.2 271 5.2 280 5.1 290 5.2
Energy 444 9.5 459 9.5 476 9.5 493 9.4 511 9.4 528 9.4
Total 1,685 36.0 1,743 36.1 1,806 36.0 1,880 35.8 1,945 35.7 2,013 35.9
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
HOUSE PROFIT 1,125 24.0 1,156 24.0 1,210 24.2 1,304 24.8 1,351 24.9 1,395 24.6
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
FIXED EXPENSES
Property Taxes 210 4.5 222 4.6 230 4.6 238 4.5 247 4.5 255 4.5
Insurance 73 1.6 76 1.6 79 1.6 81 1.5 84 1.5 87 1.5
Reserve for Replacement 187 4.0 193 4.0 200 4.0 210 4.0 218 4.0 225 4.0
Total 470 10.1 491 10.2 509 10.2 529 10.0 549 10.0 567 10.0
- ------------------------ --------------- --------------- --------------- --------------- --------------- ---------------
NET INCOME $655 13.9% $665 13.8% $701 14.0% $775 14.8% $802 14.9% $828 14.6%
======================== =============== =============== =============== =============== =============== ===============
<CAPTION>
Calendar Years Ending: 2003 2004 2005 2006
--------------- --------------- --------------- ----------------
Number of Rooms: 196 196 196 196
Occupied Rooms: 45,786 45,786 45,786 45,786
Occupancy: 64.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $83.15 Gross $86.06 Gross $89.07 Gross $92.19 Gross
- ------------------------ --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,807 65.3% $3,940 65.4% $4,078 65.4% $4,221% 65.3%
Food 1,329 22.8 1,376 22.8 1,424 22.8 1,474 22.8
Beverage 478 8.2 494 8.2 512 8.2 530 8.2
Telephone 141 2.4 146 2.4 151 2.4 156 2.4
Other Income 73 1.3 75 1.2 78 1.2 81 1.3
Total 5,828 100.0 6,031 100.0 6,243 100.0 6,462 100.0
- ------------------------ --------------- --------------- --------------- ----------------
DEPARTMENTAL EXPENSES
Rooms 937 24.6 969 24.6 1,003 24.6 1,038 24.6
Food & Beverage 1,285 71.1 1,329 71.1 1,376 71.1 1,424 71.1
Telephone 72 51.1 75 51.4 77 51.0 80 51.3
Other Income 5 6.8 5 6.7 5 6.4 5 6.2
Total 2,299 39.4 2,378 39.4 2,461 39.4 2,547 39.4
- ------------------------ --------------- --------------- --------------- ----------------
DEPARTMENTAL INCOME 3,529 60.6 3,653 60.6 3,782 60.6 3,915 60.6
- ------------------------ --------------- --------------- --------------- ----------------
OPERATING EXPENSES
Administrative & General 603 10.3 624 10.3 646 10.3 669 10.4
Management Fee 175 3.0 181 3.0 187 3.0 194 3.0
Marketing 307 5.3 317 5.3 328 5.3 340 5.3
Franchise Fees 152 2.6 158 2.6 163 2.6 169 2.6
Property Oper. & Maint 300 5.1 311 5.2 322 5.2 333 5.2
Energy 547 9.4 566 9.4 586 9.4 606 9.4
Total 2,084 35.7 2,157 35.8 2,232 35.8 2,311 35.9
- ------------------------ --------------- --------------- --------------- ----------------
HOUSE PROFIT 1,445 24.9 1,496 24.8 1,550 24.8 1,604 24.7
- ------------------------ --------------- --------------- --------------- ----------------
FIXED EXPENSES
Property Taxes 264 4.5 273 4.5 283 4.5 293 4.5
Insurance 90 1.5 94 1.6 97 1.6 100 1.5
Reserve for Replacement 233 4.0 241 4.0 250 4.0 258 4.0
Total 587 10.0 608 10.1 630 10.1 651 10.0
- ------------------------ --------------- --------------- --------------- ----------------
NET INCOME $858 14.9% $888 14.7% $920 14.7% $953 4.7%
======================== =============== =============== =============== ================
</TABLE>
- --------------------------------------------------------------------------------
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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Table 10-28 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Year Interest Rate Bond Yield
----------------------------------------------------------
1st Quarter 1996 7.79% 7.37%
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Mood's Bond Record
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 120
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of
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65% to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-29 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-30 Equity Yield Requirements
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Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70% X 0.11186 = 0.07830
Equity 30% X 0.12000 = 0.03600
--------
Overall Capitalization Rate 0.11430
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 12%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-31 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
- --------------------------------------------------------------------------------
Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest)
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and the equity investor (equity yield). The equation and the calculations
associated with this simultaneous valuation formula are set forth in the Addenda
to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $5,970,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5%yield
and the equity yield is 22%, then $5,970,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component(70%) $4,179,000
Equity Component(30%) 1,791,000
-------------
Total $5,970,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $4,179,000
Mortgage Constant 0.111856
-------------
Annual Debt Service $467,445
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-32 Forecast of Net Income to Equity
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Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $655,000 - $467,000 = $188,000
1998 665,000 - 467,000 = 198,000
1999 701,000 - 467,000 = 234,000
2000 775,000 - 467,000 = 308,000
2001 802,000 - 467,000 = 335,000
2002 828,000 - 467,000 = 361,000
2003 858,000 - 467,000 = 391,000
2004 888,000 - 467,000 = 421,000
2005 920,000 - 467,000 = 453,000
2006 953,000 - 467,000 = 486,000
The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ( $986,000 /0.120) $8,217,000
Less:
Brokerage and Legal Fees 247,000
Mortgage Balance 3,010,000
------------
Net Sale Proceeds to Equity $4,960,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-33 Overall Property Yields
- --------------------------------------------------------------------------------
Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
---------------------------------------------------------------
Total Property $5,970,000 14.5%
Mortgage 4,179,000 9.4
Equity 1,791,000 22.0
Note: Whereas the mortgage constant and value are
calculated on the basis of monthly mortgage
payments, the mortgage yield in this proof assumes
single annual payments. As a result, the proof's
derived yield may be slightly less than that
actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $5,970,000 value is correct based on the assumptions
used in this approach.
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Table 10-34 Total Property Yield
- --------------------------------------------------------------------------------
Net Income before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.5% Cash Flow
- -------------------------------------------------------------------------------
1997 $ 655,000 x 0.873110 = $ 572,000
1998 665,000 x 0.762321 = 507,000
1999 701,000 x 0.665590 = 467,000
2000 775,000 x 0.581133 = 450,000
2001 802,000 x 0.507393 = 407,000
2002 828,000 x 0.443010 = 367,000
2003 858,000 x 0.386796 = 332,000
2004 888,000 x 0.337716 = 300,000
2005 920,000 x 0.294863 = 271,000
2006 8,923,000* x 0.257448 = 2,297,000
----------
Total Property Val $5,970,000
*10th year net income of $953,000 plus sales proceeds of $7,970,000
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Table 10-35 Mortgage Component Yield
- --------------------------------------------------------------------------------
Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
- --------------------------------------------------------------------------------
1997 $ 467,000 x 0.914346 = $ 427,000
1998 467,000 x 0.836028 = 390,000
1999 467,000 x 0.764418 = 357,000
2000 467,000 x 0.698943 = 326,000
2001 467,000 x 0.639075 = 298,000
2002 467,000 x 0.584336 = 273,000
2003 467,000 x 0.534285 = 250,000
2004 467,000 x 0.488521 = 228,000
2005 467,000 x 0.446677 = 209,000
2006 3,478,000* x 0.408417 = 1,420,000
----------
Value Of Mortgage $4,178,000
*10th year debt service of $467,000
plus outstanding mortgage balance of $3,010,000
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Table 10-36 Equity Component Yield
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<TABLE>
<CAPTION>
Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.0% Cash Flow
- ----------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
1997 $ 188,000 x 0.819565 = $ 154,000
1998 198,000 x 0.671686 = 133,000
1999 234,000 x 0.550490 = 129,000
2000 308,000 x 0.451162 = 139,000
2001 335,000 x 0.369756 = 124,000
2002 361,000 x 0.303039 = 109,000
2003 391,000 x 0.248360 = 97,000
2004 421,000 x 0.203547 = 86,000
2005 453,000 x 0.166820 = 76,000
2006 5,446,000* x 0.136720 = 745,000
----------
Value of Equity Component $1,792,000
*10th year net income to equity of $486,000 plus sales proceeds of $4,960,000
</TABLE>
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.5%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 7.2% to 21.1%, it is our opinion that a 15.0% discount factor would
be appropriate for the Ramada Plaza Hotel. The following table illustrates the
discounted cash flow analysis using a 15.0% discount factor.
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Table 10-37 Discounted Cash Flow Analysis
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Discount
Net Factor Discounted
Calendar Year Income @ 15.0% Cash Flow
---------------------------------------------------------------
1997 $655,000 0.86957 $569,565
1998 665,000 0.75614 502,836
1999 701,000 0.65752 460,919
2000 775,000 0.57175 443,109
2001 802,000 0.49718 398,736
2002 828,000 0.43233 357,967
2003 858,000 0.37594 322,554
2004 888,000 0.32690 290,289
2005 920,000 0.28426 261,521
2006 8,923,167* 0.24718 2,205,670
Estimated Market Value: $5,813,166
(Say:) $5,800,000
Reversion Analysis
11th Year's Net Income $986,000
Capitalization Rate 12.0%
Total Sales Proceeds $8,216,667
Less: Broker & Legal @ 3.0% 246,500
* 10th year net income of $953,000 plus sales proceed of $7,970,167
- --------------------------------------------------------------------------------
Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors...This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $5,970,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
Property: Ramada Hotel
Location: Montvale, New Jersey
Date of Sale: May, 1996
Sales Price: $6,700,000
Grantor: Lennar Corporation
Grantee: Gami Lovale
Year Opened: 1970
Number of Rooms: 187
Price per Room: $35,829
Confirmed By: Grantee
Sale #2:
Property: Days Inn
Location: Burlington, Massachusetts
Date of Sale: June, 1995
Sales Price: $4,200,000
Grantor: The First National Bank of Boston
Grantee: Burlington Garden Partners Level I, LP
Year Opened: 1969
Number of Rooms: 173
Price per Room: $24,277
Confirmed By: Coleman & Sons, Waltham, MA
Comments: The buyer subsequently spent $4 million to
renovate and convert the property into a
Wyndham Garden Hotel.
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Sale #3:
Property: Ramada Inn
Location: Germantown, Maryland
Date of Sale: May, 1995
Sales Price: $5,350,000
Grantor: Goldenrod Limited Partnership
Grantee: Inn Keepers USA Limited Partnership
Year Opened: NA
Number of Rooms: 180
Price per Room: $29,722
Confirmed By: Eastdil Corp.
Comments: This property was subsequently renovated and
converted to a Hampton Inn.
Sale #4:
Property: Quality Inn
Location: Woodbury
New York
Date of Sale: August, 1995
Sales Price: $2,900,000
Grantor: The Estate of Frederick Phillips, et. al.
Grantee: Woodbury Realty Associates
Year Opened: 1961
Number of Rooms: 85
Price per Room: $34,118
Confirmed By: Goodman Marks Associates
Comments: This property is located on Jericho Turnpike
in Woodbury. The purchase price includes the
furniture, fixtures and equipment, and is
subject to a long-term lease for a restaurant
on the premises.
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Sale #5:
Property: Holiday Inn
Location: Waterbury, Connecticut
Date of Sale: June, 1995
Sales Price: $7,850,000
Grantor: Buckingham Development Corporation
Grantee: Oakdale College Limited Partnership
Year Opened: 1990
Number of Rooms: 205
Price per Room: $38,293
Confirmed By: Arthur Anderson
In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in 1994. The details of this
transaction are summarized as follows:
Subject Property:
Property: Ramada Inn
Location: Woburn, Massachusetts
Date of Sale: October, 1994
Sales Price: $2,753,768
Grantor: Ramada Assured Income Associates, L.P.
Grantee: Woburn Massachusetts Hotel II Limited
Partnership (subsidiary of Ashford Financial
Corporation)
Year Opened: 1972
Number of Rooms: 196
Price per Room: $14,050
Confirmed By: Grantee
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In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. According to information
provided by Ashford Financial Corporation, the subject property was one of six
Ramada Inns purchased as a package from an investment partnership sponsored by
Lehman Brothers. The above-listed price represents an allocation of the total
package price rather than a negotiated value for this single asset. The total
package price was $20,250,000, and was paid in cash, using all equity financing.
At the time of the transaction, the group of hotels was generating virtually no
operating income, and all were in extremely poor condition. The previous owners
were reportedly strongly motivated to sell due to the poor performance of the
hotels. Based on our understanding of the circumstances of this transaction, we
do not believe that this sale was reflective of market value.
The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecast to continue this positive trend. As previously discussed, the market
for hotel investments has also improved significantly, due to changes in lender
and investor attitudes. Finally, the property itself has undergone a significant
renovation, with a total of $1,431,413 spent on upgrading the facilities and
amenities in 1995. Capital expenditures for 1996 are estimated to total
$252,161. For these reasons, we are of the opinion that the 1994 sale involving
the subject property is not a reliable indicator of the current value of the
hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of
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their number and complexity, as well as the difficulty in obtaining specific,
detailed information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $24,400 to $38,300 per room or $4,800,000
to $7,500,000 for the 196-unit subject property. The income capitalization
approach indicates a value of $5,970,000, which falls within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1972, and will be approximately 25 years
old as of the date of this appraisal. The property appeared to be in good
condition at the time of our inspection. The depressed hotel market conditions
that prevailed in the late 1980s and the early 1990s have also led to a degree
of external obsolescence. In our opinion, it is impossible to identify and
quantify the impact of these factors on the property's value with any accuracy,
so we will only estimate the replacement cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $42,500 196 $8,330,000
FF&E 11,000 196 2,156,000
Pre-Opening 2,500 196 490,000
Operating Capital 1,900 196 372,400
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Total $57,900 $11,348,400
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Ramada Plaza Hotel appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3.0% and 4.5% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.0% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $3,097,271
Rental Percentage 0.04
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Economic Ground Rent $ 123,891
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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Economic Ground Rent $123,891 $1,238,909
----------------------- = --------- =
Capitalization Rate 0.10
Estimated Land Value (Say) $1,240,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 20.8% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
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Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $11,348,400
Land Value 1,240,000
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Total Replacement Cost $12,588,400
Total Replacement Cost (Say) 12,600,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Ramada Plaza Hotel. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 144
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $5,970,000
Sales Comparison $4,800,000 - $7,500,000
Cost (Replacement Cost) $12,600,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $24,400 to $38,300 per available room. The income capitalization approach
indicates a per-room value of approximately $30,500. This information suggests
that a slight upward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. The estimated replacement cost for the subject property is
substantially higher than the value indicated by the income capitalization
approach, and represents a barrier to entry for prospective hotel
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developers. Consequently, a slight upward adjustment of the value arrived at by
the income capitalization approach is warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market value
of the fee simple interest in the Ramada Plaza Hotel - Woburn, as of January 1,
1997, is:
$6,000,000
SIX MILLION DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $30,600 per room, which is well supported
by market sales and approximately 0.5% higher than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six months to one
year. Under normal economic conditions, hotels are transferred within this time
frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
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A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the Ramada Plaza Hotel indicates that the personal property and
fixtures are in fairly good condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $11,000 per available room. Assuming an average
useful life of ten years and an effective age of four years, the value of the
furniture, fixtures, and equipment currently in place is approximately $6,600
per room, or a total of $1,294,000.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
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HVS International, Mineola, New York Statement of Assumptions and 148
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and 149
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 150
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
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HVS International, Mineola, New York Certification 151
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Stephen Rushmore personally inspected the property described in this
report;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 152
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Robert Wong
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Robert Wong
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
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Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
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Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Exterior view of Subject Property
[GRAPHIC OMITTED]
Lobby
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[GRAPHIC OMITTED]
Standard King Guestroom
[GRAPHIC OMITTED]
Guestroom Vanity area
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[GRAPHIC OMITTED]
Standard Private Guest Bathroom
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[GRAPHIC OMITTED]
Subject Property's Restaurant, Cafe Fennel
[GRAPHIC OMITTED]
Subject Property's Lounge, Juliet's
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[GRAPHIC OMITTED]
Red Roof Inn
[GRAPHIC OMITTED]
Comfort Inn Woburn
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[GRAPHIC OMITTED]
Howard Johnson Woburn
[GRAPHIC OMITTED]
Howard Johnson Burlington
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[GRAPHIC OMITTED]
Susse Chalet Woburn
[GRAPHIC OMITTED]
Courtyard by Marriott Woburn
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[GRAPHIC OMITTED]
Crown Plaza Hotel Woburn
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Ramada Inn
Woburn, MA
Legal Description
The land in Woburn, Middlesex County, Massachusetts, shown as Lot 6 on plan by
Lawrence C. Allen, Surveyor, dated March 20, 1972 filed with the Land Court as
Plan 24503C, a copy of a portion of which is filed with the South Registry
District of Middlesex County with Certificate No. 137176 in Registration Book
816, Page 26, together with, as appurtenant to said Lot 6, the right to use in
common with all others from time to time entitled thereto that portion of the
area marked "WAY" on said plan (the same being the area marked "PRIVATE WAY
60'") on Land Court Plan No. 24503C1 filed in the Land Court at Boston
Massachusetts extenting from the southwesterly corner of said Lot 6 to the
public way easterly of said Lot 6 as shown on said Land Court No. 24503C1.
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Synopsis of Franchise and License Agreements
Date: October 3, 1994
Licensor: Ramada Franchise Systems, Inc.
Licensee: Woburn Massachusetts Hotel II Limited
Partnership
Premises: Hotel on 15 Middlesex Canal Park Road, Woburn,
Massachusetts
Term: 15 years; expires October 2, 2009
Renewal: None
Fees: Initial fee equal to $350
Royalty fee equal to 4% of gross room revenues
Ramada Inter-National Services Assessment Fee
equal to 4.5% of gross room revenues
Licensor Services: Reservation system; marketing; manager training
program; Ramada Inter-National Association
Licensee Obligations: Proper bookkeeping; carrying of insurance;
proper upkeep of facilities
Termination: Upon default of either party; licensee
termination with liquidated damages in the
amount of the accrued royalties during the
preceding 12 full calendar months.
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Synopsis of Hotel Management Agreement
Date: October 1, 1994
Owner: Woburn Massachusetts Hotel II Limited
Partnership
Manager: Remington Hospitality, Inc.
Premises: Hotel located on 15 Middlesex Canal Park
Road, Woburn, Massachusetts
Term: 15 years
Renewal: Operator option for two successive periods of
five years
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: Upon default by either party; upon sale of
property; and upon the death or
incapacitation of Archie Bennett, Jr.,
President of Remington Hotel Corporation.
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily. This process can be expressed in two algebraic equations
that set forth the mathematical relationships between the known and unknown
variables using the following symbols.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
de = Annual cash available to equity
dr = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
fp = Annual constant required to amortize the entire loan during the
projection period
Rr = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/Sn = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
NI - (f x M x V) = de
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11R(r)),
are calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/Rr) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S(n)). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1: Summary of Known Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
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Table 2: Present Worth of $1 Factor at the Equity Yield Rate
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Calendar Year Present Worth of $1
Ending: Factor @22.0%
--------------------------------------
1997 0.819565
1998 0.671686
1999 0.550490
2000 0.451162
2001 0.369756
2002 0.303039
2003 0.248360
2004 0.203547
2005 0.166820
2006 0.136720
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 )/( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V)= 0.111856 x 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following.
( 655,000 - 0.078299 V ) x 0.819672 +
( 665,000 - 0.078299 V ) x 0.671862 +
( 701,000 - 0.078299 V ) x 0.550707 +
( 775,000 - 0.078299 V ) x 0.451399 +
( 802,000 - 0.078299 V ) x 0.369999 +
( 828,000 - 0.078299 V ) x 0.303278 +
( 858,000 - 0.078299 V ) x 0.248589 +
( 888,000 - 0.078299 V ) x 0.203761 +
( 920,000 - 0.078299 V ) x 0.167017 +
( 953,000 - 0.078299 V ) x 0.136899 +
((( 986,000 / 0.120 ) - ( 0.03 x ( 986,000 / 0.120 )) -
((1 - 0.279638 ) x 0.70 x V)) x 0.136899 )=(1- 0.70 )V
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Like terms are combined as follows.
$4,036,869 - 0.376214 V = (1 - 0.70)V
$4,036,869 = 0.67621 V
V = $4,036,869 / 0.67621
V = $5,969,813
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $6,000,000
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HVS International, Mineola, New York Qualifications of Robert Wong
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Robert Wong
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports, and Investment Counseling)
1992 to 1996 CORNELL UNIVERSITY, SCHOOL OF HOTEL ADMINISTRATION
Ithaca, New York
1987 to 1992 DRAGON WYCK RESTAURANTS
Sheboygan, Wisconsin
Summer, 1992 HOLIDAY INN
Madison, Wisconsin
Education BS - School of Hotel Administration, Cornell
University
Professional Affiliations Cornell Society of Hotelmen
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
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HVS
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
<PAGE>
Hospitality Valuation Services Mineola, New York
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HVS
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
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Economic Study and Appraisal
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Howard Johnson Plaza
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Saddle Brook, New Jersey
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
<PAGE>
[Letterhead of HVS International]
December 2, 1996
Mr. Shirish Godbole, Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Howard Johnson Plaza
Saddle Brook, New Jersey
Ref. 9610273
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities, and have analyzed the hostelry market conditions in the Bergen
County area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the leasehold interest in the
subject property described in this report, as of January 1, 1997, is:
$3,500,000
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Rodney G. Clough
Rodney G. Clough
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
<PAGE>
HVS International, Mineola, New York Table of Contents 1
Howard Johnson Plaza, Saddle Brook, New Jersey
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Table of Contents
1. Executive Summary ........................................... 1
2. Nature of the Assignment .................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ........................... 7
4. Market Area Analysis ........................................ 26
5. Overview of External Forces Affecting the U.S.
Lodging Industry ......................................... 47
6. Lodging Market Supply and Demand Analysis ................... 63
7. Projection of Occupancy and Average Rate .................... 82
8. Highest and Best Use ........................................ 97
9. Approaches to Value ......................................... 99
10. Income Capitalization Approach .............................. 102
11. Sales Comparison Approach ................................... 139
12. Cost Approach ............................................... 148
13. Reconciliation of Value Indications ......................... 155
14. Statement of Assumptions and Limiting Conditions ............ 159
15. Certification ............................................... 163
Addenda
Legal Description
Photographs of the Subject Property
Photographs of the Competitive Properties
Synopsis of Howard Johnson License Agreement
Synopsis of Ground Lease
Synopsis of Hotel Management Agreement
Synopsis of Restaurant Lease
Explanation of the Simultaneous Valuation Formula
<PAGE>
HVS International, Mineola, New York Table of Contents 2
Howard Johnson Plaza, Saddle Brook, New Jersey
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Table of Contents (continued)
Qualifications
Rodney G. Glough
Anne Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
<PAGE>
HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Howard Johnson Plaza
Location: 129 Pehle Avenue East
Saddle Brook, New Jersey 07663
Date of Inspection: October 23, 1997
Interest Appraised: Leasehold
Date of Value: January 1, 1997
Land Description
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Area: 3.9 acres, or 169,884 square feet
Zoning: CH-1 - Limited Commercial - 1
Assessor's Parcel Number: 1311-36
Improvements Description
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Age: Constructed in 1969
Property Type: Full-service
Guestrooms: 141
Number of Stories: Eight stories
Food and Beverage Facilities: Leased Restaurant, Mr. G's Cafe and
Restaurant
Meeting Space: Four rooms, +/-6,193 square feet
Parking: 179 spaces (around perimeter of
building)
Summary of Value Parameters
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Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Three
Stabilized Year: 1999
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Valuation Assumptions
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Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 12%
Brokerage and Legal Fees: 3.0%
Holding Period: 10 years
Calculated Discount Rate: 14.29%
Estimates of Value
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Income Capitalization Approach: $3,375,000
Sales Comparison Approach
(based on fee simple): $2,900,000 - $3,800,000
Cost Approach (Replacement Cost): $9,600,000
Market Value Conclusion: $3,500,000
Market Value Conclusion per Room: +/-$25,000
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the leasehold interest in a
+/-169,884-square-foot (+/-3.9-acre) parcel improved with a 141-room,
full-service lodging facility known as the Howard Johnson Plaza, which opened in
1969. In addition to guestrooms, the subject property contains 13 meeting rooms
totaling +/-6,193 square feet of meeting space, a restaurant that is currently
leased, an exercise room, an indoor pool, a whirlpool, and appropriate
back-of-the-house facilities for a lodging facility of this type. The hotel is
situated proximate to and east of the intersection of the Garden State Parkway
and Interstate 80 in New Jersey. Direct access to the hotel lies east of this
intersection, and is provided by Pehle Avenue. Municipal jurisdictions governing
the property include the City of Saddle Brook, the County of Bergen, and the
State of New Jersey. The hotel's civic address is 129 Pehle Avenue East, Saddle
Brook, New Jersey, 07663.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Saddle
Brook area for the purpose of estimating the market value of the leasehold
interest in the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows.
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby
1. buyer and seller are typically motivated;
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2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities and analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the leasehold ownership of the improvements,
including the furniture, fixtures, and equipment. The leasehold interest is
defined as, "the right to use and occupy real estate for a stated term and under
certain conditions; conveyed by a lease."(2) An abstract of this ground lease is
provided in the Addenda to this report. The subject property is appraised as a
going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 177.
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled, The Valuation of Hotels and Motels,(1)
Hotels, Motels and Restaurants: Valuations and Market Studies,(2) The
Computerized Income Approach to Hotel/Motel Market Studies and Valuations,(3)
and Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
Current title is held by Saddle Brook New Jersey Hotel Limited Partnership - an
entity controlled by Ashford Financial Corporation. The subject property was
purchased from the Nippon Credit Bank in a transaction that
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants : Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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included 14 additional Howard Johnson properties. The bank sold these properties
to the limited partnership after the mortgagor had defaulted on the mortgage
loan. The assignment of the ground lease for the subject property occurred on
August 25, 1994.
The subject property is operated under a franchise agreement with Howard
Johnson; this agreement expires August 24, 2009. The hotel is also subject to a
management agreement with Remington Employers Corporation; an abstract of this
contract is presented in the Addenda to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property, assuming that it is placed on the
market at the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Rodney G. Clough on October 23, 1997.
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located in northern New Jersey, north of Newark, in the
Township of Saddle Brook. The center township is located at the intersection of
Interstate 80 (I-80) and the Garden State Parkway; the township spans roughly
two miles north of this intersection, and two miles south of this intersection.
The subject site is situated proximate to and east of this intersection, and is
bounded by the Garden State Parkway to the north, the northbound on-ramp for the
parkway to the west, a parcel improved with several residences to the east, and
Pehle Avenue to the south. Municipal jurisdictions governing the property
include the Township of Saddle Brook, Bergen County, and the State of New
Jersey.
According to the Saddle Book Tax Assessor's Office, the subject parcel measures
approximately +/-169,884 square feet, or +/-3.9 acres. The site is an
irregularly shaped rectangle, with +/-515 feet of frontage on Pehle Avenue,
+/-362 feet of frontage adjacent to the on-ramp to the Garden State Parkway,
+/-535 feet of frontage along the Garden State Parkway, and +/-259 feet of
frontage along the eastern edge of the site. Primary vehicular access to the
property is provided by Pehle Avenue. The topography of the parcel generally
flat.
In conclusion, the size and topography of the subject parcel appear to be
appropriate for hotel use. The site is fully developed, with no excess land
available for expansion.
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Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purposes of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would affect its use or marketability.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is readily accessible to a variety of local, county, state, and interstate
highways.
Bergen County is extremely well served by a mixture of interstate, state, county
and local roadways. These roadways include Interstates 80 and 95, the Garden
State Parkway, U.S. Route 46 (U.S. 46), and State Route (S.R. 17). Of these, the
most important insofar as the subject property is concerned are I-80 and the
Garden State Parkway.
Interstate 80 is one of the nation's major east-west arteries, commencing at its
intersection with I-95 in Ridgefield Park, New Jersey - immediately west of the
George Washington Bridge, to the east of the subject property, traversing the
entire width of Bergen Country, and finally terminating at its intersection with
the beltway surrounding the San Francisco metropolitan area, in California. In
the vicinity of the subject property, I-80 is a heavily traveled superhighway
which is divided into separate express and local access lanes; this roadway
permits both commercial and passenger vehicles to access points throughout
northern New Jersey and Pennsylvania, as well as New York City.
Interstate Route 80 intersects with the Garden State Parkway just west of the
subject property. The subject property enjoys frontage along the Garden State
Parkway. The Garden State Parkway is a toll road that extends on a north-south
axis, roughly paralleling the New Jersey coastline from I-87, the New York State
Thruway, in New York State (to the north) to Cape May, at New Jersey's southern
tip. The Garden State Parkway provides access along New Jersey's eastern
shoreline, and intersects with other major highways, such as I-78, I-95, U.S.
Highways 9 and 202, and the Atlantic City Expressway.
Running in a north-south direction is State Route 17. The subject property is
located two miles northwest of the intersection of S.R. 17 with I-80. This
four-lane, median-divided roadway commences in the south at its juncture with
State Route 3, in Rutherford, New Jersey. This southern extension
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facilitates access to the Meadowlands Sports Complex, which is situated roughly
seven miles southeast of the subject property. To the north, S.R. 17 basically
parallels the Garden State Parkway, extending to New Jersey's northern border
with New York to its juncture with the New York Thruway, near Suffern, New York.
Located approximately five miles to the southeast of the subject property is
Interstate 95, which provides a major link between northern New Jersey and New
York City. At its intersection with I-80, I-95 leads northbound motorists
directly to the George Washington Bridge, from which Manhattan's West Side can
be accessed. Interstate 95 then continues northward through the Bronx,
intersecting I-87 (known as the Major Deegan Expressway) and I-295 (which
channels traffic to access Long Island), and continues northward through the New
York County of Westchester, and on into Connecticut and the New England States.
To the south of its intersection with I-80, I-95 is known as the New Jersey
Turnpike, and provides access throughout the State of New Jersey; this highway
then continues southward, roughly paralleling the Eastern Seaboard, to its
terminus in Miami, Florida.
U.S. Highway 46, which passes approximately one mile south of the subject
property, is accessed via the Garden State Parkway, and is a major east-west
link providing egress and ingress to the subject property's market area. U.S.
Highway 46 commences at the George Washington Bridge, in the east, and extends
to its termination at New Jersey's western border with Pennsylvania. This
important route parallels I-80, and provides access to many local towns.
Given the subject property's location at the intersection of I-80 and the Garden
State Parkway, regional access to the Howard Johnson Plaza is considered to be
excellent.
Local Access and Visibility
Local access to the subject property's area is readily provided by the local
Saddle Brook exits of the Garden State Parkway and I-80. Direct access is
provided by Pehle Avenue. To reach Pehle Avenue, motorists traveling south on
the Garden State Parkway utilize the Saddle Brook Exit (Exit 80); at the end of
this exit, motorists utilize the traffic circle and continue south on Midland
Street. Motorists then turn left at the next intersection, or east onto Pehle
Avenue, and continue to the subject property which is located on the left.
Motorists traveling north on the Garden State Parkway utilize
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the similar exit (the Saddle Brook Exit, 80), and turn right on to Pehle Avenue
and continue to the subject property.
Motorists traveling west on Interstate 80 utilize the Saddle Brook/Garden State
Parkway North Exit (Exit 62). While driving on the exit ramp, motorists utilize
the local, Saddle Brook Exit instead of continuing on to the Garden State
Parkway. This local access ramp ends at Pehle Avenue, and the subject property
is accessed by turning right, or to the east. Motorists traveling east on I-80
utilize the similarly numbered exit (Exit 62) to reach the subject property.
From the access ramp, guests turn left onto Pehle Avenue, and continue east to
the subject property.
The site is visible to motorists traveling in either direction on the Garden
State Parkway. However, the site is not visible to motorists traveling on
Interstate 80.
Airport Access
Interstate 95 provides access to the subject property from Newark International
Airport, located roughly 20 miles to the south of the I-95/I-80 intersection.
Access is also possible from John F. Kennedy (JFK) and LaGuardia International
Airports, although these facilities are further from the subject property, on
Long Island, in the New York City Borough of Queens.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-1 Available Utilities
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Utility Provider
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Water Saddle Brook Township
Electricity and Gas Public Service Electricity and Gas
Local Telephone Bell Atlantic
Long Distance Telephone MCI
Sewer and Storm Drainage Saddle Brook Township
Garbage and Trash Classic Sanitation
Cable Television World Cinema (via on-site satellite)
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and no signs of toxic ground contaminants were visible at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented in the Addenda to this
report.
Land Conclusion
The subject parcel appears appropriate as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The site size is large enough to allow for sufficient parking and other
related hotel uses.
o The site enjoys a favorable location near the intersection of Interstate
80 and the Garden State Parkway, and is easily accessible from Newark
International Airport.
o The site is visible to motorists traveling both directions on the Garden
State Parkway.
o The site is served by all necessary utilities.
Disadvantage
o The site is not visible to motorists traveling on Interstate 80.
The advantages noted above are important locational characteristics. In
conclusion, the site appears to be favorable for the location of a transient
lodging facility.
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IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by Ashford Financial
Corporation.
The Howard Johnson Plaza is a full-service lodging facility containing 141
rentable units, 13 meeting rooms containing a total of +/-6,193 square feet of
meeting space, a restaurant that is currently leased, an exercise room, an
indoor pool, a whirlpool, and appropriate back-of-the-house facilities for a
lodging facility of this type. The eight-story property opened in 1969, and is
27 years old, as of the date of this appraisal. The hotel was acquired by Saddle
Brook New Jersey Hotel Limited Partnership - an entity controlled by Ashford
Financial Corporation, on August 25, 1994. At the time of this acquisition, the
hotel was in extremely poor condition. Subsequent to the acquisition, the
subject property was extensively renovated, at an estimated cost of $833,000. In
scope, this renovation included the exterior of the building, public areas, and
the guestrooms. The hotel is now judged to be in good condition, and management
representatives report that all building systems are in working order. The hotel
is operated under a license agreement with Howard Johnson and reportedly meets
the standards for lodging facilities of that brand.
Based on our inspection and information provided by Ashford Financial
Corporation, the following table summarizes the facilities available at the
subject property.
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Table 3-2 Facilities Summary
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Guestrooms
King Beds 80 Units
Double/Doubles 42
Suites 19
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Total 141 Units
Food and Beverage Outlet (Leased)
Mr. G's Cafe and Restaurant 125 Restaurant Seating
35 Bar Seating
Meeting and Banquet Rooms
Plaza Room 2,040 Square Feet
Plaza I 680
Plaza II 680
Plaza III 680
Boardroom 88
New Jersey - New York 1,400
New York 560
New Jersey 840
Liberty Room 500
Additional Break-out Rooms (6) 2,165
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Total 6,193 Square Feet
Recreational & Other Amenities
Indoor Swimming Pool 46 Lounge Chairs
Indoor Whirlpool
Outdoor Putting Green
Exercise Room
Parking Spaces 179 Outdoor Spaces
Elevators
Guest 2
Service 1
Life Safety Systems
Hard-wired smoke detectors in all guestrooms and
public spaces Building sprinklered in all
guestrooms and public spaces Pull stations and
fire extinguishers throughout
Laundry
Washers 3
Dryers 2
Construction Details
Wood construction
Concrete foundation
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Property Exterior
The hotel structure is situated on the northern portion of the site. Paved
parking areas accommodating 179 vehicles are located around the perimeter of the
building, with the majority of the spaces situated northeast and southwest of
the hotel structure. The pavement is in fair condition. The property's exterior
appears to be in good condition, and was repainted subsequent to the hotel's
purchase by its current owners. On-site signage has also been repaired, and
appears to be in good condition.
According to management, guest complaints have reportedly been received
regarding noise from the parkway, given the subject property's close proximity
the Garden State Parkway. Although these complaints are considered to be
disadvantageous for the subject property, they constitute an issue of physical
obsolescence, and would be very difficult to address. However, according to
management, this disadvantage does not negatively affect hotel occupancy or
attainable average rate.
Vehicular access to the subject site is provided via Pehle Avenue, along the
southern border of the site; along this border, there are entrances near the
southeastern and southwestern corners of the site. The majority of the hotel's
guests are arriving from the parkway or the interstate; thus, guests usually
approach the hotel from the west. After entering the site, guests proceed to the
hotel's main entrance, which is located along the northern side of the property.
Service traffic can gain access to the loading dock, which is located along the
eastern side of the building.
Construction and Design
The subject property design includes an eight-story tower, with three main
one-story wings extending from this tower, containing the restaurant, the
meeting space, and the pool. The restaurant extension is along the west side of
the building, and enjoys a highly visible location to approaching guests. The
pool extension is situated along the southern side of the building. The meeting
space extension is on the second floor of the hotel, and extends along the
northern side of the building. The first level under this second-floor extension
remains clear, and consists of the hotel's porte cochere main entrance.
The building is of wood construction on concrete slab. Management reports no
structural, electrical, or plumbing problems with the subject property. The
guestrooms are double loaded off interior corridors. Rooms along the southern
side of the tower are much larger than the those on the northern side; hence,
these rooms feature larger bath areas (an extra sink area is provided) and
larger bedroom areas. The guestrooms along the southern
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side of the building are more popular because of their larger size, as well as a
lower level of traffic noise along this side of the building.
Lobby
As stated previously, the porte cochere is situated along the northern side of
the building. The lobby is located directly south of this porte cochere. Guests
reach the lobby through one set of double manual doors which first leads to a
breezeway, and then a second set of double manual doors, which leads to the
lobby. Guests then must traverse a set of five stairs to reach the lobby level.
The lobby has two main areas - one to the north, with seating and windows which
overlook the hotel's entrance (to the immediate left as the guest enters the
building), and one to the south, which contains further seating and the front
desk, which is situated in front of the arriving guest. In total, the lobby
contains 22 seats, plants, various tables, and framed artwork, and is in
excellent condition following its renovation in 1995. The subject property's
property management system utilized at the front desk is Multisystems
Incorporated.
Food and Beverage Outlets
West of the southern lobby section is the interior entrance to the hotel's
leased restaurant, Mr. G's. Mr. G's Cafe and Restaurant is the subject
property's multi-purpose restaurant, serving breakfast, lunch, and dinner seven
days a week. This area has not been recently renovated, and appears dated.
However, advantages of this space include a marble dancing area an overhead
skylight. This restaurant also features exterior signage and an exterior
entrance.
Because this leased operation provides banquet service for the hotel's meeting
rooms, it is important to note that the restaurant is reportedly operating at a
level which is below the standard set by the competition. This fact hinders the
competitiveness of the subject property - particularly, for business in the
meeting and group market, which requires banquets. For the purposes of this
appraisal, we have assumed that the operation will continue as is, and we have
considered the subject property's current food and beverage capacity in the
formulation of its meeting and group segment competitive position.
Meeting and Banquet Space
The subject property features approximately 6,193 square feet of function space.
The majority of function space is located on the second level of the property;
this level contains the ballroom and the boardroom. The Liberty, New Jersey, and
New York meeting rooms are located on the first level of
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the hotel, east of the lobby. The New Jersey and New York Rooms can be used as
one meeting space; the wall dividing these two rooms is portable.
The meeting space remains in superior condition after the renovation of the
hotel. The ballroom features new carpeting, wall covering, and lighting
features. A dance floor is available for social functions, and all standard
audio/visual equipment is available in the room. The ballroom is divisible into
three sections, and appears to be highly functional and in superior condition.
The ballroom offers a small break-out area, which also appears to be in
excellent condition. This area also features a variety of attractive framed
artwork, and plants are expected to be added to the break-out area in 1997.
The hotel's meeting space is not directly accessible from the back-of-the-house
areas, nor does the hotel feature a banquet kitchen. Hence, the meeting space is
not considered favorable for banquets; this lack is typically considered an
issue of functional obsolescence, and hinders the hotel's competitive level in
this market. However, because the space is in superior condition, the hotel is
able to utilize the space regularly and without issue for groups not requiring
extensive food and beverage service.
Guestrooms
The subject property features 141 guestrooms, 40 of which feature connecting
doors. The hotel originally featured 147 guestrooms; however, 6 first floor
guestrooms were converted to meeting space. The guestrooms feature furniture
which is reportedly about 12 years old (except for the mattresses). In 1995, all
rooms received a complete soft-goods renovation and new mattresses. The
following is a list of the furniture featured in a standard king guestroom:
o King-sized bed with headboard
o Two nightstands with lamps
o Sofabed
o Desk with chair and hanging lamp
o Television set
o Refrigerator (8th floor only)
o Armoire with lamp
o Framed artwork
o Clothes hanging rack
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The guestrooms having two double beds feature similar furnishings, except that
these rooms do not feature a sofa bed or a desk and chair, and have only one
nightstand. The guestrooms with a queen bed also feature similar furniture, with
the exception of a sofa bed.
Guest bathrooms are standard, except that the units on the southern side of the
building (rooms with the king beds) feature an extra sink. The bathrooms are in
fair condition; while the renovation addressed new floor tiles, each bathroom's
vanity, sink, toilet, bathtub, and bath tile is reportedly from the original
construction, and appear to be worn and dated. Upgrades for the bathrooms are
planned by management in the near future.
Extra features in the subject property's guestrooms include balconies, clock
radios, phones with dataports, luggage racks, and the rooms on the eighth floor
of the property feature coffee machines, complimentary coffee, and
refrigerators. While guestrooms do not offer an on-request movie system,
standard television channels are supplemented by the Movie Channel and Showtime.
Renovations in 1997 may include new bathroom wallcovering (as well as other
cosmetic bathroom improvements), 20 new television sets, 20 new cooling units,
balcony resurfacing, and a new phone system; these renovations are subject to
budget approval. Therefore, although the furniture is dated, the rooms appear to
be in reasonably good condition.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with relatively new
carpeting, which was replaced in the previous renovation, and similarly, new
wall finishes. Corridor lighting is sufficient, and appears to be in good
condition; the lighting style appears appropriate to the hallway's recently
updated finishes. Vending and ice machines are provided on each guestroom floor
of the hotel.
Management has created no-smoking rooms; approximately 50% of the hotel's
guestrooms (70 units) are non-smoking. This type of amenity costs very little
and requires no structural changes. We expect that the number of rooms allocated
for this purpose will be increased or reduced, depending on demand and guest
response.
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Zoning, Taxes, and Neighborhood
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Recreational Amenities
The subject property features the following recreational amenities: an indoor
pool and whirlpool, an outdoor putting green, and an exercise facility. As
discussed previously, the pool is housed in an enclosed, glass-on-metal-frame
structure, in an extension that lies along the southern edge of the main hotel
tower. Access to the pool area is provided from the first floor of the hotel by
means of a hallway extending southward from the center of the main tower. From
the hotel, guests must walk down several carpeted stairs to reach the pool area.
The pool deck and the pool surface were recently refinished; the pool is in good
condition, and the pool deck is in excellent condition. The pool deck features
46 lounge chairs, and the area is unsupervised. The lighting fixtures appear
dated. The roof needs to be painted; this painting project is scheduled for
completion in 1997. The pool area also features an open shower; the tiles in
this shower appear dated, and may require upgrading.
The exercise room, located on the first level, features two Stairmasters, a
Lifecycle, and a Universal weight station. The Stairmasters are new, and all of
the equipment is reportedly in good working order. This room was created from
two original guestrooms before their conversion to its present use. The putting
green is in poor condition, and is not currently advertised to guests as an
amenity of the hotel.
Back-of-the-House Space
The back-of-the-house space appears to be adequate for the operation of this
property. A considerable portion of the basement of this property was once used
for the operation of a beauty salon and spa. However, this operation has ceased,
and current ownership has closed off this portion of the building to the public,
although this area was used for storage during the renovation, and also features
a maintenance shop. Therefore, storage capacity at the subject property is
considerable, and, from a back-of-the-house standpoint, is a advantageous
feature of the current building layout.
The leased kitchen appears to be in good working order. A new Bally walk-in
refrigerator/freezer was installed as part of the 1995 renovation. The kitchen
also features a dish machine and a receiving entrance.
The subject property features an in-house laundry facility, which is equipped
with three washers and two dryers. Two of the washers are Speed Queen machines;
one of these was recently purchased, while the other is quite old, and its age
was not readily known. The exact ages of the dryers were also unavailable to us;
the older machine is of Fowler
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Zoning, Taxes, and Neighborhood
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manufacture, while the newer (reportedly five to ten years old) is of Speed
Queen manufacture.
Heating, Ventilation, and Air Conditioning (HVAC)
The subject property's guestrooms are cooled by in-room, through-the-wall
cooling units that are in working order. Public areas are cooled by individual
roof-top cooling units; hence, the subject property does not require chillers.
The subject property features five boilers, four of which are in working order,
and are located in a storage room on the structure's roof. The four boilers
reportedly handle the needed water heating capacity of the subject property. Two
of these boilers were recently replaced. The boilers are of Smith Commercial
manufacture.
Based on information provided by Ashford Financial Corporation, all of the
subject property's operating systems are in sufficient working order to maintain
the operation of the hotel.
Vertical Transportation
Vertical transportation is provided by three Armor elevators and two stairwells.
Of the three elevators, two are guest elevators, while one is reserved for
service use. The elevator cabs were renovated last year, and appear to be in
good condition. A planned upgrade to the cabs includes the installation of
telephones, and is scheduled for 1997. Stairways are well located at each end of
the hotel tower.
Fire Protection
The subject property is reportedly fully compliant with all fire standards. The
building is fully sprinklered in all guestrooms and public areas, and guestrooms
feature hard-wired smoke alarms. Guestroom hallways and all public areas feature
pull stations and fire extinguishers.
Security
The subject property employs a security guard, who is on site during the evening
hours. Doors feature a Tessla electronic locking system, which also contributes
to the security of the hotel. Because of the subject property's location
proximate to the parkway, the property is at times a target of crime, given the
relatively easy escape route. However, crime is not a significant issue at the
subject property, according to management, and the on-staff guard is reportedly
sufficient to deter enough crime so that this issue does not affect the
competitive level of the subject property of the safety of the guests.
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Asbestos
According to information provided by management representatives, no asbestos is
present in the subject property's improvements; however, we have not been
provided with an asbestos report to confirm this assertion. The reader should be
advised that any costs associated with asbestos removal or containment may have
an unfavorable impact on the hotel's market value, and the estimate set forth in
this appraisal reflects our value conclusions prior to the deduction of any such
costs. We suggest that interested parties initiate an independent analysis
regarding current asbestos levels and the capital expenditures necessary to
remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any on-going costs related to ADA regulations are
expected to be funded by normal replacement reserves.
The subject property reportedly needs to address several issues regarding ADA
non-conformance. We have assumed that the first year's reserve for replacement
will be sufficient to address these areas of non-conformance.
Improvements Conclusion
Overall, the subject property's improvements appear to be appropriate for hotel
use. The hotel's lobby, meeting space, guest bedroom areas, and guestroom
corridors are in excellent condition, and have been maintained well since the
1995 renovation. The hotel's restaurant was unrenovated, and hence, may require
upgrading; similarly, the hotel pool area and guestroom bathrooms may require
further upgrading, as well. Issues of physical obsolescence include the noise
emanating from the Garden State Parkway and its disadvantageous effect on the
guestrooms along the northern side of the building, as well as several
non-conforming ADA issues - all of which should be addressed within the
short-term future.
For the purposes of this appraisal, we have assumed that the subject property
will be maintained in its present condition throughout the assumed ten-year
holding period. Specifically, it is assumed that hotel management will employ
standard preventive maintenance measures, and that a reserve for replacement
fund will be established which will fund the cost of any future necessary
capital expenditures.
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Zoning, Taxes, and Neighborhood
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ZONING
According to the Township of Saddle Brook zoning regulations and map, the
subject property is zoned as follows.
CH-1 - Limited Commercial - 1
This zoning provision allows: hotels; business and professional offices;
scientific, engineering, and research offices; banks and other financial
institutions; and public buildings. Based on this information, the subject
property appears to conform to local zoning regulations. We assume that all
necessary permits and approvals have been secured (including an appropriate
liquor license), and that the subject property was constructed in accordance
with local zoning ordinances, building codes, and all other applicable
regulations. Our zoning analysis should be verified before any physical changes
are made to the hotel.
ASSESSED VALUE AND TAXES
Property - or ad valorem - tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property taxes can be based on the
value of the real property or the value of the personal property and the real
property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
The taxing jurisdiction governing the subject property assesses real property
only. The 1996 assessed value ratio is reported to be approximately 94.29%. One
other hotel property comparable to the subject property is located in this
jurisdiction - the Holiday Inn. The total assessment of the 144-room Holiday Inn
in 1996 was $12,582,600 (roundly $87,400 per room), with $1,272,000 allocated to
the land, and $11,310,600 allocated to the improvements. The following table
illustrates the historical assessed value of the subject property from 1991
through 1996.
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Table 3-3 Historical and Current Assessed Value of the Subject Property
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Total Assessment Assessment per Room *
------------------------------ ------------------------
Year Land Improvements Land Improvements
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1991 $1,950,000 $12,632,200 $13,830 $89,590
1992 1,950,000 12,632,200 13,830 89,590
1993 1,950,000 10,444,900 13,830 74,077
1994 1,061,000 6,521,400 7,525 46,251
1995 1,950,000 5,478,000 13,830 38,851
1996 1,950,000 5,478,000 13,830 38,851
* Assumes 141 rooms each year
Source: Saddle Brook Tax Assessor's Office
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Based on the above information, the assessment of the subject property has
declined in recent years, but appears to have stabilized in the most recent
year. A comparison of the assessed value of the comparable hotel (the 144-room
Holiday Inn) shows that the subject property is assessed at a much lower value
per room of $52,681, when compared to the Holiday Inn's assessment of $87,400.
According to the Saddle Brook Tax Assessor's Office, this discrepancy can be
attributed to the size and scope of facilities and physical plant of the Holiday
Inn.
For the purposes of our projections, we have assumed that the assessment of the
subject property is appropriate at its current level. The tax rates and
assessment ratios applicable to the subject property are presented in the
following table.
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Zoning, Taxes, and Neighborhood
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Table 3-4 Historical Tax Rates and Assessment Ratios Applicable to the Subject
Property
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Tax Rate Per $100 Percent Percent Assessment Percent Percent
Year of Assessed Value Change(1) Change(2) Ratio Change(1) Change(2)
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1991 $ 1.31 -- -- 109.61% -- --
1992 1.68 28.2% 28.2% 97.00 (11.5)% (11.5)%
1993 1.82 8.3 4.1 98.88 1.9 1.0
1994 1.84 1.1 0.4 98.88 0.0 0.0
1995 1.94 5.4 1.3 100.06 1.2 0.3
1996 2.01 3.6 0.7 94.26 (5.8) (1.2)
(1) Annual average compounded percentage change from the previous year
(2) Annual average compounded percentage change from 1991
Source: Saddle Brook Tax Assessor's Office
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The above table illustrates that the tax rate has increased in recent years, by
5.4% in 1995, and 3.6% in 1996. For the purposes of this appraisal, we have
assumed that the tax rate will continue to rise in tandem with inflation
(assumed to 3.5%). The above table also illustrates that the assessment ratio in
this jurisdiction has fluctuated in recent years; however, this ratio is
proximate to 100%. For the purposes of this appraisal, we have assumed that the
assessment ratio will remain at 100%; any ratio set below this level is assumed
to offset any tax rate change which is above the level of inflation. The tax
rate of 2.01 for 1996 comprises various components; these components are
summarized in the following table.
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Table 3-5 Property Tax Components
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Tax Rate per $100
Jurisdiction of Assessment
--------------------------------------------
Bergen County 0.280
School District 1.079
Local Municipal 0.651
-----
Total 2.010
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Applying the projected inflationary increases to the 1995 tax burden yields the
following forecast of property taxes for the subject property.
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Table 3-6 Forecast of Property Tax Expense (+000)
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1997 1998 Stabilized
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Forecast of Property Taxes $155 $160 $166
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
As previously stated, the subject property is situated east of the intersection
of I-80 and the Garden State Parkway. Given this superior accessibility, this
intersection area is developed with various commercial and industrial uses.
Directly south from the subject property is Park 80 East, an office building.
Further south of this building, as well as east of the subject property, is a
largely residential area, with a few various retail outlets fronting Pehle
Avenue. Pehle Avenue continues eastward to its terminus at its intersection with
Saddle River Road. Saddle River Road provides local, mainly residential access
in a north-south direction. This road roughly follows the western bank of the
Saddle River, from which this township takes its name.
Directly west of the subject property are several roads that provide access
between the two interstate routes. Pehle Avenue intersects these roads, and is
the main local access thoroughfare in the subject property's immediate area.
Continuing westward on Pehle Avenue, just past these interstate access roads,
are two major developments: the Saddle Brook Marriott (a secondary competitor of
the subject property), and the Park 80 West office complex. These two
developments occupy the sites which are adjacent to and directly east of the
intersection of the Garden State Parkway and I-80.
Pehle Avenue continues eastward to its termination point at its intersection
with Midland Avenue, a major local thoroughfare providing access in a
north-south direction. Just south of its intersection with Pehle Avenue,
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Zoning, Taxes, and Neighborhood
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Midland Avenue passes under I-80. The Holiday Inn Saddle Brook - a primary
competitor of the subject property - is accessed immediately after this
overpass, to the east of Midland Avenue. The Holiday Inn Saddle Brook therefore
enjoys a visible location along the border of Interstate 80. Other improvements
along Midland Avenue are mainly light industrial in nature.
Neighborhood Conclusion
The neighborhood surrounding the Howard Johnson Plaza appears to be favorable
for the operation of a transient lodging facility.
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HVS International, Mineola, New York Market Area Analysis 26
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The Howard Johnson Plaza is situated in the Township of Saddle Brook, in the
southern portion of Bergen County, New Jersey. The area's major economic
influences are provided by the Bergen - Passaic Metropolitan Statistical Area
(MSA).
Traditionally, New Jersey has been economically driven by the industrial,
manufacturing, and transportation industries which are fueled by the readily
accessible deep-water ports, airports and major highways linking the area to its
sources of raw materials. New Jersey's economy, marked by modest but steady
growth for the past two years, is experiencing a recovery that economists and
labor analysts expect to continue into next year. The fallout of mergers and
acquisitions in the telecommunication, pharmaceutical and banking industries has
been compensated by the creation of new jobs in financial and business services,
health care, and technology-related businesses.
The subject property's extended neighborhood is highly developed with
commercial, retail, industrial, transportation-related and residential uses.
<PAGE>
[GRAPHIC OMITTED]
AREA MAP
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HVS International, Mineola, New York Market Area Analysis 27
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New York - Northeastern New Jersey Region Economic Overview
The following summary is excerpted from Regional Economy - Review and Outlook
for the New York - New Jersey Metropolitan Region -April, 1996, published by the
Port Authority of New York and New Jersey.
The regional recovery has proved to be resilient despite the negative effects of
higher interest rates, slower growth in the United States and leading
international economies, and continued restructuring in key regional industries,
such as banking, bio-medical and defense. Although growth slowed noticeably
though most of 1995, the Northeastern NY-NJ region's gradual economic recovery
continued for a third year. Total jobs rose 62,100 in 1995 - up 0.9%, following
a 1.1% increase in 1994. However, trends in total jobs mask the sweeping changes
underway in public and private sector employment throughout the region. During
1995, while government jobs declined by 2.0%, private employment rose 1.7% in
the New York Suburbs, 1.6% in Northern New Jersey, and 1.2% in New York City.
Importantly, the similar performance of the geographic sub-sectors of the region
reinforces strong regional economic integration that has become well established
since the onset of the 1989 to 1992 recession.
A slowing regional economy in 1995 occurred in conjunction with sluggish growth
in the United States throughout this year and persistent weakness in key
international markets, such as Japan and Mexico, which are significant partners
for trade and investment in the region. Regional gains were also dampened by the
cumulative effect of rising interest rates last year, which negatively affected
profits and bonuses on Wall Street, as well as new construction activity.
Regional consumers turned increasingly cautious through the year, leading to a
disappointing performance in retail sales during the critical holiday season.
With many signals pointing to slower growth throughout the nation, long-term
interest rates began to ease significantly in the second half of 1995, setting
the stage for a resurgence in growth later in 1996 and into 1997.
Despite lingering weakness in Japan and Mexico, the international sector has
been an important foundation for continued regional growth, as witnessed by the
record levels of international travel, tourism, and merchandise trade in 1995.
Furthermore, regional wages began to pick up to a 5% growth rate from 2.5% at
the close of 1994, according to the most recent data, and are expected to gain
with the improved profitability of the securities sector.
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HVS International, Mineola, New York Market Area Analysis 28
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The outlook is decidedly mixed over the short term, as the significant
restructuring of leading banking, telecommunications, bio-medical, and
manufacturing corporations in the regional partially offsets expected jobs
growth. In spite of the headlines generated by these losses, overall gains will
continue in areas such as services, financial market activity, international
trade, tourism, and the multimedia and entertainment sectors. Importantly, these
sectors, which have been the source for many of the 250,000 private jobs
generated in the region since the depths of the recession in late 1992, are well
positioned to take advantage of the improved growth expected in the United
States and in the leading international economies in the next few years.
In addition to the Regional Economy - Review and Outlook for the New York - New
Jersey Metropolitan Region - April, 1996, published by the Port Authority of New
York and New Jersey, additional information has been provided by the Bureau of
Labor Statistics, New York Department of Labor, Smith Travel Research, The New
Jersey Star Ledger, and Con Edison's Forecasting Newsletter (Third and Fourth
Quarters) for this analysis.
REGIONAL EMPLOYMENT
Within the New York-New Jersey region, employment continued to rise, as regional
jobs gained 62,100, (public and private jobs) or 0.9%, during 1995. This
performance represented a small decrease from the 1.1% gain in 1994. On a
month-to-month basis, modest increases in growth rates associated with mild
winter conditions in January and February of 1995 were realized. Employment
growth in the region was noticeably slower during the spring of 1995.
The following table illustrates the change in employment for the major sectors
in the Northern New Jersey region, illustrating 1985 to 1995 data. The following
information has been provided by the State of New Jersey Department of Labor.
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HVS International, Mineola, New York Market Area Analysis 29
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Table 4-1 Northern New Jersey Region Wage and Salary Employment by Major
Industry (+000)
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<TABLE>
<CAPTION>
Percent Percent Percent Percent Wholesale & Percent
Year Total Change Construction Change Manufacturing Change TCPU Change Retail Trade Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985 2,225.0 --- 82.9 --- 520.2 --- 172.2 --- 527.4 ---
1986 7,880.8 254.2 % 89.9 8.4 % 501.9 (3.5)% 176.8 2.7 % 540.4 2.5 %
1987 8,033.2 1.9 94.3 4.9 491.7 (2.0) 180.7 2.2 554.4 2.6
1988 8,473.8 5.5 99.8 5.8 479.6 (2.5) 178.2 (1.4) 564.0 1.7
1989 8,511.5 0.4 96.6 (3.2) 461.2 (3.8) 179.9 1.0 565.3 0.2
1990 8,384.1 (1.5) 87.2 (9.7) 427.7 (7.3) 176.9 (1.7) 546.6 (3.3)
1991 8,001.1 (4.6) 73.2 (16.1) 401.0 (6.2) 172.5 (2.5) 519.5 (5.0)
1992 7,829.0 (2.2) 64.2 (12.3) 379.7 (5.3) 171.8 (0.4) 507.2 (2.4)
1993 7,862.6 0.4 66.6 3.7 368.8 (2.9) 175.9 2.4 505.8 (0.3)
1994 7,941.6 1.0 69.4 4.2 363.0 (1.6) 182.2 3.6 514.1 1.6
1995 8,016.9 0.9 70.3 1.3 355.6 (2.0) 183.6 0.8 523.3 1.8
Annual Average Change:
1985 to 1995 13.7 % (1.6)% 10.9 % (3.7)% 0.6 % (0.1)%
1990 to 1995 (0.9) (4.2) 21.3 (3.6) 0.7 (0.9)
1994 to 1995 0.9 1.3 26.7 (2.0) 0.8 1.8
</TABLE>
Percent Services Percent Percent
Year FIRE Change & Misc. Change Government Change
- --------------------------------------------------------------------------------
1985 136.9 --- 484.2 --- 301.2 ---
1986 148.2 8.3 % 505.4 4.4 % 296.9 (1.4)%
1987 158.9 7.2 525.2 3.9 298.5 0.5
1988 165.1 3.9 544.5 3.7 302.0 1.2
1989 171.5 3.9 572.3 5.1 307.2 1.7
1990 166.8 (2.7) 580.4 1.4 309.9 0.9
1991 159.0 (4.7) 566.7 (2.4) 306.8 (1.0)
1992 158.8 (0.1) 574.3 1.3 307.7 0.3
1993 161.4 1.6 592.4 3.2 309.0 0.4
1994 162.9 0.9 609.9 3.0 310.1 0.4
1995 162.1 (0.5) 637.0 4.4 311.5 0.5
Annual Average Change:
1985 to 1995 1.7 % 2.8 % 0.3 %
1990 to 1995 (0.6) 1.9 0.1
1994 to 1995 (0.5) 4.4 0.5
Source: NYS & NJS Departments of Labor
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HVS International, Mineola, New York Market Area Analysis 30
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Since the regional economic recovery began inclusive of the greater New Jersey -
New York region, the eight counties of Northern New Jersey (including the
subject property's county) have paced well above the aggregate average; this
particular trend has identified the area as a "break out" economy. Northern New
Jersey added 31,800 jobs to its employment base, which equated to a 1.4% growth
rate. The new jobs represented over one-half of the 1995 job growth in the NY-NJ
region. However, even with that impressive accomplishment, the Northern New
Jersey economy slowed with each successive quarter in 1995.
Private sector employment expanded faster than total employment. The Northern
New Jersey private sector gained 30,200 jobs, for a growth rate of 1.6%. This
performance represented almost one-third of the private sector jobs added
regionwide. The gains spread across four sectors: services; wholesale and retail
trade; transportation, communication, and public utilities (TCPU); and
construction. The job losses were concentrated in the manufacturing and the
finance, insurance and real estate (FIRE) sectors.
Growth continued to slow in the TCPU sector, as continued layoffs at phone
companies and energy utilities offset gains in transportation employment.
Manufacturing employment continued to decline, losing 7,400 jobs - or 2.0% - in
1995. The region's wholesale and retail trade sector continued to rebound
strongly in 1995, gaining 9,200 jobs, or 1.8%. According to the Departments of
Labor for New York and New Jersey, construction employment totals, which were
severely affected by the recession, continued to rise, with a gain of 9,000 - or
1.3% - in 1995. The slight increase in public sector employment continued in
1995, with an increasing by 0.5%.
Employment in the Northeastern New Jersey Region
In addition to reviewing employment trends for the New York-New Jersey region as
a whole, we have also reviewed data for the Northern New Jersey area. Employment
data for this review is based on information provided by the Port Authority of
New York and New Jersey and the New Jersey Star Ledger. These most recent
available employment statistics were through July of 1996.
Job gains in the eight-county Northeastern New Jersey area, consisting of
Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset, and Union Counties,
drove the regional recovery. Following employment growth of 29,700, or 1.4%, in
1994, the increase in employment increased 2.0% in Northeastern New Jersey in
the first half of 1995. By mid-year, 1996, New
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HVS International, Mineola, New York Market Area Analysis 31
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Jersey achieved a net gain of 18,600 jobs, and was on pace to match last year's
gain of 36,600 jobs, statewide.
The Counties of Hudson and Bergen led the overall employment gains in
Northeastern New Jersey. Services sector job growth was strong, at 3.5%, and
construction job growth, which benefited from the mild winter conditions, was
6.8%.
Job growth for the first half of 1995 increased 2.0%, outperforming 1994. The
rise in overall job growth is attributable to the wholesale and retail trade and
the FIRE sectors, which had significant gains throughout 1994. Job reductions in
the telecommunications and energy components of the TCPU sector detracted from
the pace of total job growth. Manufacturing jobs fell 1.5%, with the largest
losses occurring in the Counties of Bergen, Passaic, Middlesex, and Somerset.
Similar to 1994, some divergence in the rates of job growth took place among the
several labor markets that make up the eight-county Northeastern New Jersey
sector. Growth was strongest in the more recently developed areas of Somerset
and Middlesex Counties, along the more rapidly growing highway corridors in the
periphery of the region, and at the Hudson County waterfront.
Labor Force
According to figures provided by the New Jersey Star Ledger, unemployment rates
in the State of New Jersey declined during the first six months of 1996,
averaging 6.1%, compared to 6.7% for the first six months in 1995. The state has
regained 200,000 jobs, or about 75% of the 262,000 jobs lost during the last
recession.
According to information provided by the Port Authority of New York and New
Jersey, unemployment rates also fell in the urbanized counties of Northern New
Jersey. In Hudson County, the rate of unemployment fell to 9.4% in the first
half of 1995, from 10.0% last year. Passaic County's unemployment rate stood at
8.9% - down from 10.1% at mid-1994. Essex County's rate was 7.9% in the first
six months of 1995, compared to 8.9% in 1994.
Regional unemployment rates in the suburban areas were at or below the national
average the first half of 1995. In the New York Suburbs, joblessness eased
consistently throughout the first six months of the year, averaging 4.9%. The
suburban counties of Northern New Jersey averaged 5.3% -
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HVS International, Mineola, New York Market Area Analysis 32
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also all at or below the nation's average rate of unemployment. Somerset County
boasted the region's lowest jobless rate, at 4.0%.
Construction Contracts and Starts
The value of new construction contracts awarded during the year, reported by F.
W. Dodge, is an indicator of the planned construction activity and employment
demand over time, as work is completed on these projects.
During the first six months of 1995, total planned spending on new construction
awards in the New York-New Jersey region rose by 3.8%, compared to a 2.0%
increase in 1994. In inflation-adjusted dollars, actual regional construction
activities remained quite low, totaling $5.3 billion. This amount represented
the lowest level of construction spending since the $4.8 billion recorded in
1977.
In the Northern New Jersey area, total construction spending decreased by 2.6%
during the first half of 1995. Nationally, F. W. Dodge reported a 2.0% decrease
in total construction spending, compared to 1994. In Northern New Jersey, a 1.0%
increase in the first six months of 1995 was recorded in commercial/industrial
construction spending over 1994 levels. Residential construction spending in
Northeastern New Jersey also experienced considerable gains, increasing by 17.8%
in the first half of 1995. Infrastructure construction spending in the region
decreased by 6.0%, compared to a 12% increase in 1994. Gains were recorded in
all parts of the region except infrastructure construction. Nationally,
infrastructure spending increased by 1%, compared with 1994 levels.
Office Market
The New Jersey Star Ledger reports that gradual recovery in office market
conditions continued in much of the Northern and Central New Jersey region
during the first half of 1996, with overall vacancy rates falling to their
lowest level since 1987. After three consecutive quarters of increased
occupancy, the overall vacancy rate for the two regions stands at 17.9%, down
two percentage points from a year ago. However, Class A vacancy hit its lowest
point in a decade, at 13.4%, with several sub-markets reporting Class A vacancy
below 10%. Approximately 81% of the 1.5 million square feet of office space
absorbed throughout the entire region was in Class A space. Overall, space came
off the market at a rate 14% higher than during the first six months of 1995.
Residential Market
Rising interest rates in 1994 meant higher mortgages rates which, in turn,
depressed regional housing markets in the first six months of 1995. The
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largest drop in sales was registered in the fourth quarter of 1994, with the
peak of 30-year mortgage rates at 9.1%, according to the National Association of
Realtors. For the first six months of 1995, total sales in select residential
locations of the region - including Northern New Jersey, Westchester and Nassau
Counties in New York, and the western portion of Suffolk County - were still
more than 10% lower than the comparable period a year ago. However, the rate of
decline has been easing. Residential mortgage rates had moved downward to just
over 7.5% by June, 1995.
International Activity
According to the New Jersey Star Ledger, international trade continued to become
a more important part of New Jersey's economy in 1995, with exports of $18.3
billion, up $1.5 billion from 1994 and $3.9 billion from 1993. Exports grew to
7.1% of the state's gross domestic product, and increase of 0.9% from 1994.
Total jobs related to international trade in New Jersey now number approximately
850,000, according to the Bureau of Labor Statistics.
According to the New York and New Jersey Port Authority, international
investment activity in the region has quickened. Leading foreign economies with
ties to the region have begun to recover. In addition, the low value of the
dollar has made investment in U.S. assets a bargain. According to information
from the Port Authority of New York and New Jersey, office leasing activity by
foreign tenants totaled 1.2 million square feet in the first half of 1995,
compared to 1.9 million square feet leased in all of 1994. Firms from
Switzerland and the U.K. represented more than half of the leasing activity in
1995. German, Japanese, and Canadian firms have also signed leases for
significant amounts of office space in the region.
International investors also purchased office buildings in the region. Purchases
amounted to 1.3 million square feet of space, led by investors from Russia and
Israel.
Office buildings are not the only real estate asset that foreign investors
purchased. Investors from 17 nations own 42 hotels, which comprise 29% of the
total transient rooms inventory. Investors from Japan, Hong Kong, and the U.K.
made up more than half of this total investment.
Major Business and Industry
The relatively low land cost (when compared to Manhattan), quality of living,
and favorable accessibility of the greater Newark area make the Newark and
Northern New Jersey region a popular location for major corporations to
establish operations and corporate headquarters. These
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types of offices, as well as other regional installations are the major source
for lodging demand in the market of the subject property. This discussion
includes a sample of some of these corporate headquarters in the general
vicinity of the subject property.
Companies with corporate headquarters in New Jersey and north of Newark (in the
Paramus and Woodcliff Lake area) include the Federal Paper Board, A & P, Toys R
Us, TW Services, Hertz, Ingersoll-Rand, and Becton Dickinson. The Interstate 287
southern corridor, which includes the Cities of Parsippany through Basking
Ridge, features many companies having a headquarters location there, including
BASF, Armco, Warner-Lambert, Allied Signal, AT&T, and Schering-Plough. Companies
with headquarters in the Wayne/Fairfield area, approximately halfway between the
I-287 corridor to the southwest and the Paramus area to the northeast, include
American Cynamid, GAF, Union Camp, Grand Union, Noritsu, and Ricoh. Finally,
company headquarters south of Newark in the general area encompassing Edison to
the south through Clark to the north include Merck, Hanson Industries,
Engelhard, Johnson and Johnson, and Supermarkets General.
Economic and Demographic Data
We have evaluated various economic and demographic statistics to determine
trends in lodging demand. Much of this evaluation has been discussed thus far in
this section of the report. However, we have also included a discussion of the
area's population, retail sales, and personal income below. The source of data
used in this section of analysis is the Complete Economic and Demographic Data
Source published by Woods & Poole Economics, Inc. - a well-regarded forecasting
service based in Washington, DC. Using a data base containing more than 300
variables for each county in the nation, Woods & Poole employs a sophisticated
regional model to forecast economic and demographic trends. Historical
statistics are based on census data and information published by the Bureau of
Economic Analysis. Projections are formulated by Woods & Poole. All dollar
amounts have been adjusted for inflation, and thus, growth or decline represents
real change in constant dollars.
Population
According to Woods & Poole Economics, Inc., the statewide population increased
at an average annual compounded rate of 0.5% between 1980 and 1995; an identical
growth rate was registered from 1990 to 1995. These figures fall below the
national gains of 1.0% and 1.1% for these respective periods. While population
remained stable for Bergen County and the Bergen-Passaic, NJ MSA on an annual
compounded basis between 1980 and
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1995 (no growth was registered), population has increased on an annual
compounded basis for these two areas by 0.4% between 1990 and 1995 for each
classification.
Projections indicate that population increases from 1995 through the Year 2000
will closely mirror recent trends, and will fall below national gains. Bergen
County and the MSA are projected to experience a decline in population with an
average annual compounded decline of 0.1% during this period. Forecasts for the
state are more positive than those for the MSA and County, and indicate an
average annual compounded population increase of 0.4% between 1995 and 2000. The
United States population is anticipated to expand by 0.9% annually through the
end of the decade.
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial hotel demand; this observation also holds true for
the meeting and convention segment if a majority of the meetings are
business-oriented.
Retail Sales
Retail sales levels reflect both population trends and the propensity to spend
money on retail goods. There is no direct correlation between retail sales and
hotel demand; however, retail sales trends tend to gauge the economic health and
vitality of the market. Retail sales growth should cause local businesses to
prosper and make it more likely for new firms to enter the market.
Information from Woods & Poole Economics, Inc. reveals that between 1980 and
1995, retail sales in Bergen County rose at an inflation-adjusted average annual
compounded rate of 1.4%; the Bergen-Passaic, NJ MSA registered a moderately
higher growth rate of 1.5% during this period. Retail sales levels for the state
slightly surpassed this mark, with an increase of 1.6% annually, and the
national growth rate of 1.9% annually was one-half percentage point higher than
that registered by the MSA.
For the short-term historical period of 1990 from 1995, retail sales growth
maintained growth levels similar to the long-term period previously discussed
except for the nation. Average annual compounded growth rates remained identical
for the County and the MSA, and retail sales declined to a growth rate of 1.5%
annually in New Jersey. The national retail sales expanded by 2.5% annually
between 1990 and 1995.
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HVS International, Mineola, New York Market Area Analysis 36
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Countywide and the MSA retail sales are projected to slow to average annual
compounded declines of 0.2% and 0.1%, respectively, between 1995 and 2000, which
illustrates the expected stabilization of the regional economy. The state is
expected to maintain a higher growth rate of 0.4% annually, which falls below
the anticipated national gain of 0.9% per year.
Personal Income
According to the procedures outlined in the National Income and Product
Accounts, personal income is calculated by totaling earned income (wages,
salaries, other labor income, and proprietor's income), non-earned income, and
residence adjustments and subtracting personal contributions to social
insurance. Trends in personal income reflect the spending ability of local
residents.
Woods & Poole Economics, Inc. reports that personal income rose at average
annual compounded rates of 2.2% in Bergen County and 1.9% in the Bergen-Passaic,
NJ MSA between 1980 and 1995. New Jersey maintained a comparably high increase
of 2.4% annually, and the 2.3% average annual compounded increase in the United
States was largely similar to those achieved in the subject property's market
area.
Once again, the recession and related events caused slower personal income
growth in all areas between 1990 and 1995. During this period, the average
annual compounded growth rate was 0.3% in Bergen County and the Bergen-Passaic,
NJ MSA, while the state achieved a growth rate of 1.0%, compounded annually.
Between 1990 and 1995, the nation maintained personal income growth of 1.9%
annually.
Personal income growth in Bergen County is projected at an average annual
compounded rate of 1.7% between 1995 and 2000; this anticipated growth suggests
a stabilized economic climate through the remainder of the decade. Projected
increases of 1.6% for the MSA and 2.0% for the state illustrate the anticipated
strength for the greater Newark metropolitan area. Personal income growth in the
United States is anticipated to occur at a slightly higher average annual
compounded rate of 2.3% from 1995 through the Year 2000.
Highway Traffic
The subject property occupies a prominent location adjacent to the Garden State
Parkway, and is located just north of the Interstate 80. The volume of highway
traffic passing through a market area is a relevant factor that has a
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HVS International, Mineola, New York Market Area Analysis 37
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direct impact on transient commercial and leisure demand and an indirect effect
on meeting demand.
================================================================================
Table 4-2 Traffic Counts
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Garden State Percent Percent
Year Parkway(1) Change Interstate 80(2) Change
- --------------------------------------------------------------------------------
1992 114,000 -- 122,700 --
1993 113,800 (0.2)% 127,200 3.7%
1994 123,400 8.4 109,500 (13.9)
1995 119,700 (3.0) 117,100 6.9
Avg. Annual Comp. Percent
Change, 1992 - 1995 1.6 % (1.5)%
(1) At the Interstate 80 Toll Plaza
(2) Near Passaic, New Jersey (approximately 5 miles west of subject property)
Source: Data Development, New Jersey Department of Transportation
- --------------------------------------------------------------------------------
Traffic counts for the Garden State Parkway illustrate strong growth of 8.4% in
1994, and a moderate decline of 3.0% in 1995. Between 1992 and 1995, traffic
increased at the average annual compounded rate of 1.6%. On Interstate 80,
traffic trends were opposite to those of the parkway, with growth in 1993 and
1995, and a considerable decline in 1994. Traffic on I-80 declined at the
average annually compounded rate of 1.5% between 1992 and 1995.
Airport Traffic
Airport passenger counts are important indicators of transient lodging demand.
Depending on the type and location of a particular airfield, a sizable
percentage of arriving passengers may have need for hotel and motel
accommodations. Trends showing changes in passenger counts also reflect local
business activity and the overall economic health of an area.
New York is one of the most important transportation centers in the United
States, and the subject property's proximity to New York City positions it as a
viable lodging alternative for visitors to New York City. There are three major
commercial airports servicing the New York Metropolitan area including: John F.
Kennedy (JFK) International Airport, LaGuardia Airport and Newark International
Airport. Combined, these three airports serviced
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HVS International, Mineola, New York Market Area Analysis 38
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over 78 million passengers in 1995. Over the past five years, the region has
exhibited positive growth in airport passenger traffic, reflecting an average
annual increase of 3.7%.
New York City is a major destination for international business and tourism
travel. International passenger traffic accounted for nearly 30% of total
passenger volume into the city in 1995. International traffic has reflected
strong growth over the last several years.
Development activities at both JFK and Newark Airports are expected to boost
airport traffic at both facilities. These plans are targeted to make both
airports more accessible to the public and/or expand existing facilities. The
JFK Redevelopment Plan consists of expansion to the existing facilities at
Kennedy Airport. A new terminal is being constructed at the site of the former
Eastern Air Lines facility, in addition to an expansion of the existing
terminals. Another major planned development is the construction of a people
mover, which would allow for connection of the airport to mass transit systems
such as the Long Island Railroad and New York City mass transit. Development
plans at Newark International Airport include the construction of a monorail.
The monorail is intended to provide easier transportation between points
throughout the airport.
The following tables illustrate the historical passenger volume handled by the
three New York area International Airports.
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Table 4-3 Growth at the Three New York Area Airports (Total Arrivals and
Departures)
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Percent Percent Percent
Year JFK Change LaGuardia Change Newark Change
- --------------------------------------------------------------------------------
1968 19,573,628 --- 10,481,999 --- 6,716,584 ---
1969 19,507,694 (0.3)% 11,736,383 12.0 % 7,130,537 6.2 %
1970 19,096,705 (2.1) 11,845,141 0.9 6,460,489 (9.4)
1971 19,310,714 1.1 12,796,002 8.0 6,105,054 (5.5)
1972 20,725,700 7.3 14,234,735 11.2 6,752,395 10.6
1973 31,389,159 51.5 14,027,360 (1.5) 6,835,203 1.2
1974 20,216,436 (35.6) 13,703,028 (2.3) 6,451,857 (5.6)
1975 19,475,761 (3.7) 13,185,753 (3.8) 6,265,797 (2.9)
1976 21,032,973 8.0 14,088,797 6.8 6,752,726 7.8
1977 22,545,497 7.2 15,087,530 7.1 7,303,604 8.2
1978 24,860,753 10.3 17,094,972 13.3 8,469,465 16.0
1979 26,976,675 8.5 18,391,035 7.6 9,296,942 9.8
1980 26,796,066 (0.7) 17,467,962 (5.0) 9,223,260 (0.8)
1981 25,752,719 (3.9) 18,146,191 3.9 10,181,865 10.4
1982 26,452,508 2.7 18,516,891 2.0 11,731,062 15.2
1983 27,904,474 5.5 18,813,397 1.6 17,411,253 48.4
1984 29,934,779 7.3 20,302,511 7.9 23,654,163 35.9
1985 28,945,000 (3.3) 20,542,000 1.2 28,577,000 20.8
1986 27,224,000 (5.9) 22,189,000 8.0 29,433,000 3.0
1987 30,192,000 10.9 24,226,000 9.2 23,475,000 (20.2)
1988 31,166,000 3.2 24,159,000 (0.3) 22,496,000 (4.2)
1989 30,323,000 (2.7) 23,158,000 (4.1) 20,928,000 (7.0)
1990 29,794,000 (1.7) 22,795,000 (1.6) 22,255,000 6.3
1991 26,229,068 (12.0) 19,654,344 (13.8) 22,276,396 0.1
1992 27,767,073 5.9 19,656,145 0.0 24,285,164 9.0
1993 26,796,843 (3.5) 19,804,566 0.8 25,809,413 6.3
1994 28,809,322 7.5 20,730,467 4.7 28,020,482 8.6
1995 30,829,781 7.0 20,599,394 (0.6) 26,626,231 (5.0)
Average Annual Compounded Growth
1968 - 1995 1.7 % 2.5 % 5.2 %
1980 - 1995 0.9 1.1 7.3
1990 - 1995 0.7 (2.0) 3.7
Source: Port Authority of New York and New Jersey - Aviation Department
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Tourist Attractions
Although commercial activity is an important component of the area economy, the
greater New York area is also a major tourism destination. The subject property
will often benefit from tourism related directly to New York City; tour groups
will often utilize greater-Newark area guestroom
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HVS International, Mineola, New York Market Area Analysis 40
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supply due to the cheaper room rates - when compared to New York City - that are
available.
Leisure travel in the subject property's market area is also affected by events
occurring at the Meadowlands Sports Complex. The complex was constructed in 1976
on a 750-acre site for approximately $450 million. The project was entirely
financed by the sale of bonds issued by the New Jersey Sports and Exposition
Authority, at no expense to the taxpayers. Surplus operating revenues from the
complex are turned over to the State of New Jersey General Fund, to which the
complex has contributed more than $60 million. The three major facilities of the
complex are Giants Stadium, Brendan Byrne Arena, and Meadowlands Racetrack. The
following table illustrates the total attendance within the Meadowlands Sports
Complex. The significant increase in attendees at Giants Stadium in 1994
represents the World Cup Soccer tournament that was held there that year.
Because this is not an annual event, the large average annual compounded growth
in 1994 at Giants Stadium is not indicative of future trends.
================================================================================
Table 4-4 Meadowlands Sports Complex Annual Attendance
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Brendan Meadowlands Total
Year Giants Stadium Byrne Arena Racetrack Attendance
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1985 2,200,000 2,100,000 2,800,000 7,100,000
1986 1,750,000 2,000,000 2,400,000 6,150,000
1987 1,700,000 2,200,000 2,600,000 6,500,000
1988 2,700,000 2,400,000 2,400,000 7,500,000
1989 2,100,000 2,300,000 2,200,000 6,600,000
1990 2,200,000 2,400,000 2,000,000 6,600,000
1991 2,300,000 2,000,000 2,000,000 6,300,000
1992 2,200,000 1,900,000 2,500,000 6,600,000
1993 2,000,000 1,900,000 2,000,000 5,900,000
1994 3,200,000 2,500,000 1,850,000 7,550,000
1995 1,600,000 2,300,000 1,600,000 5,500,000
Average Annual Compounded Growth
- --------------------------------
1985 - 1995 -3.1 % 0.9 % -5.4 % -2.5 %
1990 - 1995 -6.2 -0.8 -4.4 -3.6
Source: New Jersey Sports & Exposition Authority
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HVS International, Mineola, New York Market Area Analysis 41
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Woods & Poole Data
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus, reflect real change. It should be noted that
the percentage changes indicated in the following tables are based on unrounded
figures, and thus, may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 42
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================================================================================
Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+,000)
Bergen County 1980-1995 846.1 841.3 (0.0)%
Bergen-Passaic, NJ MSA 1980-1995 1,294.6 1,303.2 0.0
State of New Jersey 1980-1995 7,377.0 7,938.8 0.5
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+,000)
Bergen County 1990-1995 825.6 841.3 0.4
Bergen-Passaic, NJ MSA 1990-1995 1,279.0 1,303.2 0.4
State of New Jersey 1990-1995 7,740.1 7,938.8 0.5
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+,000)
Bergen County 1995-2000 841.3 835.3 (0.1)
Bergen-Passaic, NJ MSA 1995-2000 1,303.2 1,297.3 (0.1)
State of New Jersey 1995-2000 7,938.8 8,107.5 0.4
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+,000,000)
Bergen County 1980-1995 6,498.9 7,971.3 1.4
Bergen-Passaic, NJ MSA 1980-1995 9,201.4 11,501.7 1.5
State of New Jersey 1980-1995 45,469.7 57,963.4 1.6
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+,000,000)
Bergen County 1990-1995 7,445.8 7,971.3 1.4
Bergen-Passaic, NJ MSA 1990-1995 10,665.4 11,501.7 1.5
State of New Jersey 1990-1995 53,923.1 57,963.4 1.5
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+,000,000)
Bergen County 1995-2000 7,971.3 7,905.8 (0.2)
Bergen-Passaic, NJ MSA 1995-2000 11,501.7 11,433.7 (0.1)
State of New Jersey 1995-2000 57,963.4 59,157.0 0.4
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Bergen County 1980-1995 7,680.8 9,474.9 1.4
Bergen-Passaic, NJ MSA 1980-1995 7,107.5 8,825.7 1.5
State of New Jersey 1980-1995 6,163.7 7,301.3 1.1
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Bergen County 1990-1995 9,018.8 9,474.9 1.0
Bergen-Passaic, NJ MSA 1990-1995 8,338.8 8,825.7 1.1
State of New Jersey 1990-1995 6,966.8 7,301.3 0.9
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 43
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Bergen County 1995-2000 9,474.9 9,464.7 (0.0)%
Bergen-Passaic, NJ MSA 1995-2000 8,825.7 8,813.2 (0.0)
State of New Jersey 1995-2000 7,301.3 7,296.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating
and Drinking Place Sales (+,000,000)
Bergen County 1980-1995 541.4 650.2 1.2
Bergen-Passaic, NJ MSA 1980-1995 773.6 889.0 0.9
State of New Jersey 1980-1995 3,991.7 5,226.8 1.8
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating
and Drinking Place Sales (+,000,000)
Bergen County 1990-1995 609.1 650.2 1.3
Bergen-Passaic, NJ MSA 1990-1995 844.0 889.0 1.0
State of New Jersey 1990-1995 4,781.7 5,226.8 1.8
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking
Place Sales (+,000,000)
Bergen County 1995-2000 650.2 661.1 0.3
Bergen-Passaic, NJ MSA 1995-2000 889.0 903.3 0.3
State of New Jersey 1995-2000 5,226.8 5,482.5 1.0
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating
and Drinking Place Sales Per Capita
Bergen County 1980-1995 639.9 772.8 1.3
Bergen-Passaic, NJ MSA 1980-1995 597.6 682.2 0.9
State of New Jersey 1980-1995 541.1 658.4 1.3
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating
and Drinking Place Sales Per Capita
Bergen County 1990-1995 737.8 772.8 0.9
Bergen-Passaic, NJ MSA 1990-1995 659.9 682.2 0.7
State of New Jersey 1990-1995 617.8 658.4 1.3
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking
Place Sales Per Capita
Bergen County 1995-2000 772.8 791.4 0.5
Bergen-Passaic, NJ MSA 1995-2000 682.2 696.3 0.4
State of New Jersey 1995-2000 658.4 676.2 0.5
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+,000,000)
Bergen County 1980-1995 17,077.9 23,510.1 2.2
Bergen-Passaic, NJ MSA 1980-1995 23,811.7 31,794.3 1.9
State of New Jersey 1980-1995 120,336.5 171,425.6 2.4
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 44
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income (+,000,000)
Bergen County 1990-1995 23,187.9 23,510.1 0.3 %
Bergen-Passaic, NJ MSA 1990-1995 31,361.9 31,794.3 0.3
State of New Jersey 1990-1995 162,895.3 171,425.6 1.0
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+,000,000)
Bergen County 1995-2000 23,510.1 25,571.6 1.7
Bergen-Passaic, NJ MSA 1995-2000 31,794.3 34,353.0 1.6
State of New Jersey 1995-2000 171,425.6 188,925.7 2.0
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Bergen County 1980-1995 20,184.0 27,945.0 2.2
Bergen-Passaic, NJ MSA 1980-1995 18,393.0 24,397.0 1.9
State of New Jersey 1980-1995 16,312.0 21,593.0 1.9
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Bergen County 1990-1995 28,086.0 27,945.0 (0.1)
Bergen-Passaic, NJ MSA 1990-1995 24,520.0 24,397.0 (0.1)
State of New Jersey 1990-1995 21,046.0 21,593.0 0.5
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Bergen County 1995-2000 27,945.0 30,614.0 1.8
Bergen-Passaic, NJ MSA 1995-2000 24,397.0 26,480.0 1.7
State of New Jersey 1995-2000 21,593.0 23,303.0 1.5
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment
- Bergen County (+,000)
Farm 1980-1995 0.4 0.4 (0.6)
Agriculture Services, Other 1980-1995 2.6 3.3 1.5
Mining 1980-1995 0.4 0.3 (2.7)
Construction 1980-1995 18.2 20.5 0.8
Manufacturing 1980-1995 113.6 73.3 (2.9)
Trans., Comm. & Public Utils. 1980-1995 23.2 25.4 0.6
Total Trade 1980-1995 131.6 141.1 0.5
Wholesale Trade 1980-1995 52.8 60.6 0.9
Retail Trade 1980-1995 78.8 80.5 0.1
Finance, Insurance, & Real Estate 1980-1995 30.6 48.8 3.2
Services 1980-1995 105.0 171.9 3.3
Total Government 1980-1995 44.6 44.8 0.0
Federal Civilian Govt. 1980-1995 3.5 3.4 (0.2)
Federal Military Govt. 1980-1995 2.8 2.3 (1.4)
State & Local Govt. 1980-1995 38.3 39.2 0.2
TOTAL 1980-1995 470.2 529.7 0.8
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 45
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================================================================================
Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment
- Bergen County (+,000)
Farm 1990-1995 0.4 0.4 (0.1)%
Agriculture Services, Other 1990-1995 3.0 3.3 1.7
Mining 1990-1995 0.3 0.3 0.7
Construction 1990-1995 24.7 20.5 (3.6)
Manufacturing 1990-1995 86.2 73.3 (3.2)
Trans., Comm. & Public Utils. 1990-1995 26.5 25.4 (0.8)
Total Trade 1990-1995 147.8 141.1 (0.9)
Wholesale Trade 1990-1995 64.8 60.6 (1.3)
Retail Trade 1990-1995 83.0 80.5 (0.6)
Finance, Insurance, & Real Estate 1990-1995 53.7 48.8 (1.9)
Services 1990-1995 160.0 171.9 1.4
Total Government 1990-1995 45.4 44.8 (0.2)
Federal Civilian Govt. 1990-1995 3.9 3.4 (3.1)
Federal Military Govt. 1990-1995 2.5 2.3 (1.9)
State & Local Govt. 1990-1995 39.0 39.2 0.1
TOTAL 1990-1995 547.9 529.7 (0.7)
Projected Employment - Bergen County (+,000)
Farm 1995-2000 0.4 0.4 (0.7)
Agriculture Services, Other 1995-2000 3.3 3.1 (0.9)
Mining 1995-2000 0.3 0.3 0.4
Construction 1995-2000 20.5 20.7 0.3
Manufacturing 1995-2000 73.3 69.5 (1.1)
Trans., Comm. & Public Utils. 1995-2000 25.4 26.1 0.5
Total Trade 1995-2000 141.1 142.8 0.2
Wholesale Trade 1995-2000 60.6 63.3 0.9
Retail Trade 1995-2000 80.5 79.4 (0.3)
Finance, Insurance, & Real Estate 1995-2000 48.8 53.7 1.9
Services 1995-2000 171.9 179.9 0.9
Total Government 1995-2000 44.8 45.2 0.1
Federal Civilian Govt. 1995-2000 3.4 3.2 (0.8)
Federal Military Govt. 1995-2000 2.3 2.3 0.2
State & Local Govt. 1995-2000 39.2 39.6 0.2
TOTAL 1995-2000 529.7 541.6 0.4
</TABLE>
Source: Woods and Poole Economics, Inc.
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HVS International, Mineola, New York Market Area Analysis 46
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The Lodging Market Supply and Demand Analysis section of this economic study and
appraisal will relate these historical and projected growth trends to specific
market segments based on their propensity to reflect visitation. This analysis
will provide a basis for forecasting changes in room night demand in the subject
property's area.
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HVS International, Mineola, New York Overview of External Forces 47
Affecting the U.S. Lodging Industry
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================================================================================
5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 48
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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HVS International, Mineola, New York Overview of External Forces 49
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
non-performing hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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HVS International, Mineola, New York Overview of External Forces 50
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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HVS International, Mineola, New York Overview of External Forces 51
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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HVS International, Mineola, New York Overview of External Forces 52
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
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<TABLE>
<CAPTION>
Year 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $ 91,000 $ 85,000 $ 79,000 $ 80,000 $ 83,000
</TABLE>
Source: HVS International
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HVS International, Mineola, New York Overview of External Forces 53
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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HVS International, Mineola, New York Overview of External Forces 54
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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HVS International, Mineola, New York Overview of External Forces 55
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- --------------------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates
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HVS International, Mineola, New York Overview of External Forces 56
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that during periods of prosperity, room rates are a good hedge against
inflation; this was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
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HVS International, Mineola, New York Overview of External Forces 57
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forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the average
sales price per room peaked at $75,000. This was more than twice the 1981
average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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HVS International, Mineola, New York Overview of External Forces 58
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Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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<TABLE>
<CAPTION>
Annual Percent Change
---------------------
'86-'87 '87-'88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the
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operating results and investment potential of lodging facilities. The following
list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
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o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This is a good indication that hotel values will return to record
levels in the next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell, once
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prices begin to approach levels that allow the existing (or restructured) debt
to be paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results must take into
account at least a portion of any upside created from improved performance,
particularly if the improvement can be readily achieved through management
efficiencies. Capitalization rates based on historical operating income have
fallen during the past several years. Hotel buyers in today's market must be
aggressive in all of their acquisition assumptions. As a result, hotel values in
some parts of the country are approaching the levels registered during the
mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Room Supply and Demand Trends (STR)
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<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 1,009 1,009 1,009 1,009 1,009 1,009 1,009
Annual Guestroom Supply 368,285 368,285 368,285 368,285 368,285 368,285 368,285
Percent Change --- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 254,117 250,802 230,546 228,337 235,702 255,958 258,536
Percent Change --- (1.3)% (8.1)% (1.0)% 3.2% 8.6% 1.0 %
Occupancy 69.0% 68.1% 62.6% 62.0% 64.0% 69.5% 70.2%
Percent Change --- (1.3)% (8.1)% (1.0)% 3.2% 8.6% 1.0 %
Average Rate $64.32 $63.87 $58.84 $58.91 $58.42 $61.20 $63.40
Percent Change --- (0.7)% (7.9)% 0.1% (0.8)% 4.8% 3.6 %
RevPAR $44.38 $43.50 $36.83 $36.52 $37.39 $42.53 $44.51
Percent Change --- (2.0)% (15.3)% (0.8)% 2.4% 13.8% 4.6 %
</TABLE>
Year-to-Date Through August
--------------------------- Average Annual
Compounded Growth
1995 1996 1989 - 1995
- -------------------------------------------------------------------------
Number of Rooms 1,009 1,009
Annual Guestroom Supply 245,187 246,196
Percent Change --- 0.4% 0.0%
Room Night Demand 171,141 177,507
Percent Change --- 3.7% 0.3%
Occupancy 69.8% 72.1%
Percent Change --- 3.3% 0.3%
Average Rate $62.33 $67.20
Percent Change --- 7.8% (0.2)%
RevPAR $43.51 $48.45
Percent Change --- 11.4% 0.0%
Source: Smith Travel Research
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus,
they are considered relevant to this study.
The preceding table indicates that the number of primarily competitive
guestrooms included in the Saddle Brook, New Jersey area survey remained
constant, at 1,009, from 1989 through 1995. Demand declined by 1.3% in 1990, by
8.1% in 1991, and by 1.0% in 1992. These declines were the result of the
recession that affected the nation during this period, which was exacerbated, in
1991, by the Persian Gulf War, which caused a downturn in travel throughout the
U.S. The impact of the recession on the subject market area was compounded by
the dynamics of the regional hotel market, and particularly, the market in New
York City. During the recession of the early 1990s, New York City's hotels
suffered from a lack of demand, and decreased their rates in order to attract a
wider array of business and thus, sustain reasonable occupancy levels. As a
result, tour groups and other area leisure demand which had previously opted for
the lower rates outside the CBD were able to attain low enough rates within the
city, and used New York City hotels. With the recent upswing in the economy,
both occupancy levels and average room rates in New York City have rebounded
considerably, and many of these guests have again been forced out of the city.
Further, demand in Manhattan is now strong enough to generate overflow to all of
the suburban area markets. The subject property's lodging market is benefiting
from this situation, as the hotels in northern New Jersey offer a reasonable
alternative to the hotels in the city.
That the hotels in Northern New Jersey are a reasonable alternative is evident
in the 1993 historical figures, when room night demand experienced a 3.2%
increase. In 1994, the increase in room night demand was even more considerable,
at a level of 8.6%; in 1994, roundly 27,600 more room nights were accommodated
in the market than in 1992. Additionally, it is important to note that 1994
represented an exceptional year for the Northern New Jersey area market; in
addition to the strengthening economy, a number of "citywide" events were held
in the region, including the World Cup Soccer matches at Giants Stadium and the
Gay Games. These events generated a significant volume of overflow demand for
the subject property's market. On the heels of this strong year, demand
increased in 1995 by only
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1.0%, reflecting a more typical room night demand growth level. As the economy
in New Jersey continues to improve and the enhanced room product at the subject
property has allowed the accommodation of more demand in the competitive set,
year-to-date trends through August, 1996 illustrate a growth rate of 3.7% in
room demand. Overall, demand grew at an average annual compounded rate of 0.3%
between 1989 and 1995. Because supply remained stable, changes in occupancy
mirrored the shifts in demand.
The weak demand experienced in 1990 through 1992 limited the market area's
ability to increase average rates, which decreased in 1990 and again in 1991. A
slight (0.1%) increase was achieved in 1992, followed by a 0.8% decline in 1993.
As areawide occupancy continued to recover and demand reached the 70% level in
1994, average rate began to rebound. In 1994, rates grew by 4.8%, followed by
3.6% in 1995. The continued increase in occupancy achieved in 1996 year-to-date
has supported further increases in average rate, at 7.8%, as area hotels pursue
higher rates through both price increases and the limitation of discounted
rates. RevPAR remained stable on an average annually compounded basis. The
weakest RevPAR level was in 1991, at -15.3%, while the strongest increases
occurred in 1994, 1995, and 1996 year-to-date, with 13.8%, 4.6%, and 11.4%,
respectively. This most recent 11.4% increase registered for year-to-date, 1996
reflects the widespread improvement in overall conditions for the subject
property's market area.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the Saddle
Brook market area is generated primarily by the following four market segments.
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Segment 1 Commercial
Segment 2 Leisure
Segment 3 Meeting and Group
Segment 4 Contract
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 estimated year-end distribution of accommodated
hotel room night demand as follows.
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Table 6-2 1996 Estimated Year-end Accommodated Room Night Demand
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1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 152,000 62.0% 21,000 65.6%
Meeting and Group 46,000 19.0 3,000 9.4
Leisure 39,000 16.0 8,000 25.0
Contract 10,000 4.0 0 0.0
------- ----- ------ -----
Total 248,000 100.0% 32,000 100.0%
- --------------------------------------------------------------------------------
Commercial demand predominates in the local market, accounting for approximately
62% of the estimated 1996 room night demand. Meeting and group demand followed,
with a 19% share. Leisure rooms contributed a relatively strong 16%, and
contract demand accounted for the remaining 4% of room night demand. The subject
property's segmentation differed from that of the competitive market to some
degree. Approximately 66% of the Howard Johnson's 1996 estimated year-end
occupancy is attributable to the commercial segment; leisure rooms accounted for
25%, and the meeting and group segment contributed the remaining 9%. The subject
property does not currently participate in the contract segment of the market.
Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual business people who are visiting
various firms in the subject property's market. Commercial demand is strongest
Tuesday and Wednesday nights in this market, with
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Sunday and Friday nights as shoulder nights (hotels typically sell out during
Tuesday and Wednesday nights). The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
Because of the improved room product and improving image of the subject
property, the Howard Johnson Plaza is favorably positioned to benefit from the
improving New Jersey economic outlook. Demand in this segment is generated from
companies located as far north as Paramus, and as far east as New York City. As
New York City hotel demand continues to improve, the area will also benefit from
increased demand overflow.
Area corporate demand is generated by a variety of corporations with offices and
corporate headquarters generally situated within a ten-mile radius of the
subject property. Some of these installations include the following: the Federal
Paper Board, A & P, Toys R Us, TW Services, Hertz, Ingersoll-Rand, Becton
Dickinson, American Cynamid, GAF, Union Camp, Grand Union, Noritsu, and Ricoh. A
number of small industrial plants, office complexes, and warehouses which
generate commercial demand are also located in the subject property's immediate
area. Many of these local companies have negotiated corporate accounts with the
subject property; two of the largest accounts include Sealed Air and National
Chemical Research. Finally, the Marriott, a secondary competitor of the subject
property, eliminated approximately 60 exterior-corridor rooms from its room
count during its last renovation, which had the effect of providing more
overflow business for the subject property and its primarily competitive set.
Based on our analysis of the Bergen County economy, together with a review of
national economic trends, we estimate that commercial demand will increase by 3%
for the first projection year, and at a conservative level of 2% per annum
throughout the remainder of our projection period.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of
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vacations, the summer months represent the slowest period for this market
segment; winter demand varies. The average length of stay for typical meetings
and groups ranges from three to five days. Most commercial groups meet during
the weekday period of Monday through Thursday, but associations and social
groups will sometimes gather on weekends. Commercial groups tend to have a low
double occupancy of 1.3 to 1.5 people per room, while social groups are likely
to have double occupancy rates ranging from 1.5 to 1.9.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
Area meeting demand is largely generated by local corporations; these meetings
typically involve training or company planning. Most corporate meeting business
accounts are derived from companies located in the greater Paramus, New Jersey
area (Paramus is just west of Saddle Brook). Significant meeting accounts at the
subject property include AT&T, National Chemical Research, and Sealed Air.
Because of its improved overall product, inclusive of the meeting space, the
subject property should be able to continue to capture smaller corporate
training meetings as well as educational meetings. The only constraining factor
may be the limited banquet kitchen facilities of the hotel as well as the
reputation for questionable service and food quality of the current restaurant
operator.
The subject property also houses meetings for the educational test preparation
firm the Princeton Review. This company produces approximately $70,000 annually
for the subject property in room night rental; this contract is renewed
annually. Similar review classes for the CPA test are held by Fox Garity; this
installation generates approximately $50,000 annually for the subject property
in room rental; this contract is renewed monthly. No room nights or food and
beverage revenues are associated with these groups; however, the room rental
revenue generated is considerable, and this revenue source requires little
labor, which results in a high profit margin.
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Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus,
growth in this segment tends to lag slightly behind increases in commercial
demand. We believe that growth in the meeting and group segment will occur at
the rate of 2.0% in 1997, at 1.5% in 1998, and at 1.0% per annum throughout the
remaining projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations.
The Northern New Jersey area offers a variety of local attractions, including
the Meadowlands Sports Complex, which has been discussed previously in this
report. Although the subject property houses leisure demand related to these
local attractions, the majority of leisure demand is generated by tourists
visiting New York City. As mentioned previously, with the economy strengthening,
New York City hotels are charging increasingly higher room rates, which are
compounded by higher lodging taxes. This pricing trend gives hotels situated
outside of Manhattan a competitive sales tool with respect to this
rate-sensitive segment of the market. These suburban hotels, including the
subject property and its competitors, offer reasonable room rates when compared
to room rates offered in Manhattan. The resulting room prices are very
attractive to tour groups and other area leisure
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demand. Leisure demand is therefore expected to remain strong in the short term,
given the current upswing in the economic cycle.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections. Based upon our review of the local area and national
trends, we estimate that leisure demand should increase at a rate of 2% in 1997
and 1998, and by 1% throughout the remaining projection period.
Contract Segment
A small portion of the area demand is associated with airline contract business.
Airline demand is generated by flight crews and delayed passengers. The airlines
typically contract rooms in nearby lodging facilities for extended periods to
ensure the availability of accommodations. Because they are able to guarantee a
specific level of usage on a daily basis, airlines can usually negotiate deeply
discounted room rates. This type of demand is advantageous because it provides a
base level of occupancy over a long period that normally includes weekends and
slow seasons. The occupancy benefit is offset by low contract room rates, which
have an adverse impact on average rate. Skilled hotel operators use airline
patronage to fill in during periods of low occupancy, and quickly displace this
demand when higher-rated market segments offer better potential.
Currently, only the Holiday Inn Hasbrouck Heights hotel participates in this
segment; thus, only 4% of the total market demand accommodates any contract
demand. We have assumed a zero growth trend in this segment, as participation in
this segment is largely based on any particular hotel's management marketing
strategy at any given time.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, four segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
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================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rate
-----------------------------------------
1997 1998 1999 2000 2001 2002
- -------------------------------------------------------------------------------
Commercial 3.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Meeting and Group 2.0 1.5 1.0 1.0 1.0 1.0
Leisure 2.0 1.0 1.0 1.0 1.0 1.0
Contract 0.0 0.0 0.0 0.0 0.0 0.0
Annual Average Growth 2.5% 1.7% 3.5% 1.6% 1.6% 1.6%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Northern New Jersey suburban area
is served by a wide array of hotels and motels. The subject property is situated
in the Saddle Brook market area; additional concentrations are of lodging
facilities are located in the Secaucus/Meadowlands area, in the vicinity of
Newark Airport, as well as near the major concentrations of office space in the
area and along the highways which serve as major arteries through the region.
We have identified three properties that are considered primarily competitive
with the Howard Johnson Plaza. Including those of the subject property, these
primary competitors contain a total of 710 rooms. Three additional lodging
facilities are judged to be only secondarily competitive; although the
facilities, rate structures, or market orientations of these hotels prevent
their inclusion among the primarily competitive supply, they do compete with the
subject property to some extent. The room count of each secondary competitor has
been weighted to reflect the degree to which it competes with the Howard Johnson
Plaza; the aggregate weighted room count of the secondary competitors is 260.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets
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forth each property's penetration factors; penetration is the ratio between a
specific hotel's operating results and the corresponding data for the market. If
the penetration factor is greater than 100%, the property is performing better
than the market as a whole; conversely, if the penetration is less than 100%,
the hotel is performing at a level below the marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
Meeting Meeting --------------------------------- --------------------------
Year Number Space Space/Room Meeting Average
Property/Location Opened of Rooms (Sq. Ft.) (Sq. Ft.) Comm. & Group Leisure Contract Occupancy Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
129 Pehle Avenue East 1969 141 6,193 44 65% 10% 25% 0% 55.7% $60.93 $33.94
Holiday Inn Hasbrouck Heights
283 Route 17 South 1967 250 5,900 24 55 20 10 15 77.0 61.00 46.97
Holiday Inn Saddle Brook
50 Kenney Place 1965 144 6,100 42 60 30 10 0 68.0 71.00 48.28
Ramada Rochelle Park
372 West Passaic Street 1974 175 8,000 46 70 15 15 0 68.0 64.00 43.52
- ------------------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 710 6,548 39 62% 19% 14% 6% 68.7% $63.73 $43.80
Secondary Competition 260 61% 18% 21% 0% 71.0% $73.48 $52.17
Totals and Averages 970 62% 19% 16% 4% 69.5% $66.63 $46.28
<CAPTION>
Estimated 1996
-------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate RevPAR Penetration Penetration
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
129 Pehle Avenue East 63.0% $63.00 $39.69 90.1% 81.3%
Holiday Inn Hasbrouck Heights
283 Route 17 South 76.0 66.00 50.16 108.6 102.8
Holiday Inn Saddle Brook
50 Kenney Place 68.0 73.00 49.64 97.2 101.7
Ramada Rochelle Park
372 West Passaic Street 75.0 66.00 49.50 107.2 101.4
- --------------------------------------------------------------------------------------
Sub-Totals and Averages 71.5% $66.82 $47.81 102.3% 98.0%
Secondary Competition 66.0% $78.50 $51.81 94.3% 106.2%
Totals and Averages 70.0% $69.76 $48.80 100.0% 100.0%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the primarily competitive market shows a representation of
nationally-recognized, franchised lodging chains. The hotels range in size from
141 to 250 rooms, and in age from 22 to 31 years. The market demand has a strong
corporate orientation, which results in commercial representing the majority of
the demand in the market. In addition, several properties enjoy considerable
meeting and group business. As a result of its proximity to the New York City
area, this market is able to capture some leisure business as well.
For estimated year-end 1996, the primary competitors achieved an overall
occupancy of 71.5% at an average rate of $66.82, yielding a RevPAR of $47.81.
The Holiday Inn Hasbrouck Heights is forecasted to maintain the highest
occupancy in 1996, at 76.0%, which equates to an occupancy penetration of
108.6%. This strong performance is due to this hotel's airline contract, which
bolsters occupancy during the slower periods of the week and year. The Ramada
Rochelle Park follows closely, with an occupancy of 75.0% and an occupancy
penetration rate of 107.2%. The Holiday Inn Saddle Brook commands the highest
average rate, at $73.00, for estimated year-end 1996.
In both 1995 and 1996, the subject property has achieved the lowest occupancy
and average rate in the market area. This poor performance, which is effectively
measured by the occupancy and yield penetration rates of 90.1% and 81.3%,
respectively, is a result of the hotel's poor image in the local market. In
large part, this image is attributable to the inferior condition of the physical
facilities prior to the completion of the recent renovation. Additionally, the
Howard Johnson brand is somewhat dated in market image, and generally constrains
the hotel's ability to appeal to the commercial segment of the market. The
completion of the recent renovation, together with an effective marketing
effort, should enable the subject property to achieve an improved competitive
position within the market area.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Holiday Inn Hasbrouck Heights
The Holiday Inn Hasbrouck Heights is full-service, first-class lodging facility
which opened on June 30, 1967. The property is owner operated under a Holiday
Inn franchise; the owners are reportedly a group of local business people. The
Holiday Inn features 250 guestrooms, a restaurant and lounge, and roundly 5,900
square feet of meeting space. The meeting and banquet space can accommodate
groups of up to 250 persons. Additional facilities
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include an outdoor swimming pool, a health club with an exercise room, and a hot
tub. Guestroom amenities offered include hair dryers and premium cable channels.
According to management, this hotel continuously renovates, and no major
renovations are currently planned. However, the hotel is somewhat dated in
appearance.
The high average rate achieved at the Holiday Inn is evidence of its superior
room product and its location within the busy Hasbrouck Heights area. The
property benefits from strong commercial generated from the Teaneck/
Tenafly/Paramus area, and is closer to New York City and the Meadowlands Complex
than the rest of the competitive set. These factors allow the property to
attract considerable patronage primarily from the commercial and the meeting and
group segments. This property also enjoys a higher occupancy, reflecting its
accommodation of an airline contract. This Holiday Inn currently derives
approximately 55% of its occupancy from the commercial segment, 20% from the
meeting and group segment, 10% from the leisure segment, and 15% from the
contract segment. The hotel enjoys the highest occupancy and yield penetration
in the market, at 108.6% and 102.8%, respectively, for estimated year-end 1996.
Holiday Inn Saddle Brook
Highly visible along I-80, the Holiday Inn Saddle Brook is a full-service,
first-class lodging facility which opened in 1965, and is therefore the oldest
of the primarily competitive properties. The hotel is owned by GP Inns, and is
managed by Coventry Hotels under a Holiday Inn franchise. This property features
144 guestrooms configured in a circular guestroom tower. Additional facilities
include a nightclub, a restaurant and lounge, and roundly 6,100 square feet of
meeting space, which can accommodate groups of up to 500 persons. Additional
facilities include an indoor swimming pool and an exercise room. According to
management, this property renovated two guestroom floors in 1995, and an
additional two floors are planned for renovation in 1997. The meeting space on
the second floor of the hotel was renovated in 1994. At this time, the hotel has
no plans for expansion.
The limited size of the Holiday Inn precludes the property from fully utilizing
its meeting space; as a result, the hotel contracts with local companies for
training of employees who primarily reside in the New Jersey region. The hotel
also hosts many area reunions on weekends, and accommodates demand associated
with the local catering facilities. The Holiday Inn currently derives
approximately 60% of its occupancy from the commercial segment, 30% from the
meeting and group segment, and 10% from the
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leisure segment. The hotel enjoys the highest average rate in the market, at $73
for estimated year-end 1996. However, its limited size - similar to the subject
property's 141 rooms - precludes its from handling larger meetings and groups.
Hence, its 1996 year-end occupancy is estimated to be 68%, which equates to a
97.2% occupancy penetration. Yield penetration for this property is estimated at
101.7% for 1996 year-end.
Ramada Rochelle Park
The Ramada Rochelle Park is first-class, full-service lodging facility which
opened in 1974, and is the newest property in the competitive set. The Ramada
features 175 guestrooms, a restaurant, a lounge named the Sports Authority, and
roundly 4,100 square feet of meeting space. The meeting and banquet space can
accommodate groups of up to 250 persons. Additional facilities include an indoor
swimming pool and an exercise room. The property is currently undergoing a soft
goods renovation, at a reported cost of $1.2 million; however, the rooms remain
in fair condition.
The Ramada currently derives approximately 70% of its occupancy from the
commercial segment, and equal portions of 15% from the meeting and group and the
leisure segments. The Ramada operates four courtesy vans to accommodate
corporate clients, and the hotel provides transportation between the property
and various local companies. This complimentary transportation is a component of
their negotiated corporate accounts which contributes to the hotel's primarily
commercial market orientation. Although the meeting space of the Ramada is
somewhat limited, this property markets heavily to the local wedding market; the
hotel demand associated with these weddings comprises the majority of the
Ramada's leisure segment. The hotel is forecast to achieve a year-end average
rate in 1996 similar to the Holiday Inn Hasbrouck Heights, at $66. Its 1996
estimated year-end occupancy is 75%, which equates to a 107.2% occupancy
penetration. Yield penetration for this property is estimated at 101.4% for
year-end 1996.
Secondary Competitors
Secondary competitors of the subject property comprise three full-service
hotels: the Marriott Saddle Brook, the Howard Johnson Clifton, and the Ramada
Clifton. The Clifton area is located south of the subject property, along Route
21, just east of the Garden State Parkway. The Marriott Saddle Brook is situated
directly south of the subject property, at the intersection of Interstate 80 and
the Garden State Parkway.
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The Ramada Clifton and Howard Johnson Clifton are considered competitive based
on these properties' brand affiliations and their locations in the general
Saddle Brook/Paterson vicinity. However, because of their distance from the
subject property and their location on a secondary highway, these properties are
considered to be only 50% competitive with the primary competitors.
The Marriott Saddle Brook is a full-service, upper-tier property located
directly south of the subject property. This property originally featured 281
rooms, which included a low-rise wing with 80 exterior-corridor guest- rooms;
however, in April of this year, the property converted the 20 guestrooms closest
to the main tower to an interior-corridor configuration, and demolished the
remaining 60 rooms. The room count of the Marriott is now 221 rooms. Because of
this property's rate positioning, quality of product, and its placement in the
upper-tier market, this property is considered to be only 50% competitive.
In aggregate, the secondary competitors will achieve an estimated year-end 1996
occupancy of 66%, and an average rate of $78.50. The occupancy level represents
a five-point decline from 1995, due to both the re-positioning of the Marriott
and the construction at that property during the past year, and a roundly $5
increase in average rate.
The following table illustrates the operating statistics of the three secondary
competitors.
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Table 6-5 Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
--------------------------------- ---------------------------------
Number Percentage Weighted Mtg. & Average
Property of Rooms Competitive Room Count Comm. Conv. Leisure Contract Occupancy Rate RevPAR
- ---------------------------------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Saddle Brook Marriott 221 50% 110.5 60% 25% 15% 0% 76% $84.00 $63.84
Howard Johnson Clifton 116 50 58.0 65 5 30 0 76 60.00 45.60
Ramada Clifton 183 50 91.5 60 20 20 0 61 64.00 39.04
- ---------------------------------------------------------------------------------------------- ---------------------------------
Totals and Averages 520 260.0 61% 18% 21% 0% 71% $73.48 $52.17
</TABLE>
Estimated 1996
-------------------------------
Average
Property Occupancy Rate RevPAR
- -----------------------------------------------------------
Saddle Brook Marriott 64% $90.00 $57.60
Howard Johnson Clifton 76 67.00 50.92
Ramada Clifton 61 73.00 44.53
- -----------------------------------------------------------
Totals and Averages 66% $78.50 $51.81
- --------------------------------------------------------------------------------
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Proposed Competitors
Based on our field work in the market and our discussions with local hotel
operators, developers, and government officials, no properties appear to be
proposed or under construction that are likely to compete with the Howard
Johnson Plaza. However, it should be noted that the competitive market registers
a healthy occupancy of roundly 70% for estimated year-end 1996. Our experience
indicates that once markets surpass occupancies of 70%, there is often some
demand that cannot be accommodated by the existing hotels. Moreover, investors
and developers rapidly become interested in such strong markets, particularly
when the area is characterized by a degree of economic growth, thereby
increasing the likelihood of new construction. Finally, the hotel industry is
currently in a strong development cycle, particularly with respect to the
limited-service segment of the industry; the inventory of these products is
currently undergoing rapid expansion. In light of these factors and in order to
recognize the cyclical nature of the lodging industry, our analysis will
incorporate a hypothetical new competitor. This hotel is assumed to be a
120-room, limited-service hotel that is anticipated to enter the local lodging
supply in January of 1999.
It is also important to note that many limited-service hotels are outperforming
their full-service counterparts, and as a result of the lower cost of
operations, they often achieve higher yields. The selection of the January, 1999
opening date takes into account the relatively short time frame required to
construct a limited-service hotel. As the national economy improves and hotel
financing becomes more readily available, the development process can be further
hastened.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market has shown signs of recovery from 1992 onward, corresponding to
the economic recovery nationwide. According to Smith Travel Research, these
growth patterns have continued through August of 1996. While supply has remained
constant over recent years, growth in demand has driven occupancy upwards,
allowing the hotels in the market to follow with average rate increases.
Based on our review of the local area, four market segments were defined within
the subject property's lodging market. Growth rates for each market segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period.
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We have identified three properties that are considered competitive with the
subject hotel. The subject property is under-performing in the market, and is
not attaining its fair share in terms of occupancy, average rate, and RevPAR.
The completion of the recent renovations is expected to enable the property to
achieve an improved competitive position, although the continued affiliation
with the subject Howard Johnson will likely limit the hotel's success,
particularly in the commercial segment of the market.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and rooms revenue per available room (RevPAR). For the purpose of
comparison, we have also presented corresponding data (as provided by Smith
Travel Research) for the competitive hotels described in the previous section.
In addition to the annual percent change calculations, we have determined the
subject property's occupancy, average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year-to-Date Through August
---------------------------
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property *
Occupancy 55.4% 55.7% 48.0% 58.3%
Percent Change --- 0.5% --- 21.5%
Occupancy Penetration 79.7% 79.3% 68.8% 80.9%
Average Rate $52.65 $60.93 $60.10 $63.10
Percent Change --- 15.7% --- 5.0%
Average Rate Penetration 86.0% 96.1% 96.4% 93.9%
RevPAR $29.17 $33.94 $28.85 $36.79
Percent Change --- 16.4% --- 27.5%
RevPAR Penetration 68.6% 76.3% 66.3% 75.9%
Areawide (STR)
Occupancy 69.5% 70.2% 69.8% 72.1%
Percent Change 8.6% 1.0% --- 3.3%
Average Rate $61.20 $63.40 $62.33 $67.20
Percent Change 4.8% 3.6% --- 7.8%
RevPAR $42.53 $44.51 $43.51 $48.45
Percent Change 13.8% 4.6% --- 11.4%
* Subject property data for 1994 represents a partial year, beginning in April
- --------------------------------------------------------------------------------
The above data illustrates that the subject property has historically
under-performed the market. Occupancy penetration was roundly 80% in both 1994
and 1995; furthermore, while the market gained 1.0% in occupancy in 1995, the
subject property gained only 0.5%. However, the subject property has achieved
considerable occupancy growth in 1996, through August, when compared to its
performance during the similar period in 1995, which should allow the subject
property to improve its competitive position by year-end, 1996, due to an
improved market image and the recent renovation.
While historical changes in occupancy were limited, the subject property has
been able to improve its average rate - and its resulting average rate
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penetration considerably. The subject property attained a substantial 15.7%
average rate increase in 1995, while the market average rate increased by only
3.6%. Year-to-date trends illustrate a continued, strong rate growth of 5.0% for
the subject property; the market has been able to surpass this mark to date in
1996, with a growth rate of 7.8%. This strong growth trend in average rate will
likely remain in this market during the short-term while the economy and
resulting hostelry demand remains strong and supply remains constant.
Resulting RevPAR increases for the subject property have been significant: 16.4%
in 1995 and 27.5% for year-to-date 1996. These increases have been well above
the market RevPAR increases of 4.6% in 1995 and 11.4% for year-to-date 1996.
This trend bodes well for the subject property, and illustrates well both the
subject property's improving position in the market and the success of
management's market repositioning and product improve- ments.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
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Table 7-2 1996 Estimated Year-end Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------
Percentage Percentage
Market Segment Marketwide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 152,000 62.0 % 21,000 65.6 %
Meeting and Group 46,000 19.0 3,000 9.4
Leisure 39,000 16.0 8,000 25.0
Contract 10,000 4.0 0 0.0
------- ----- ------ -----
Totals 248,000 100.0 % 32,000 100.0 %
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were actually used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand.
Unaccommodated Demand
Unaccommodated demand refers to individuals who are unable to secure
accommodations in the market because all of the local hotels are filled. These
travelers must defer their trips, settle for less desirable accommodations, or
stay in properties located outside the market area. Because this demand did not
yield occupied room nights, it is not included in the estimate of historical
accommodated room night demand.
Currently, the subject property and its competitors generally fill on Tuesday
and Wednesday nights of any typical business week, excluding holiday weeks. This
trend suggests that unaccommodated demand exists during these days of the week.
Furthermore, it should be noted that the competitive market is expected to
register a healthy occupancy of roundly 70% by year-end 1996. Our experience
indicates that once markets surpass occupancies of 70%, there is often some
demand that cannot be accommodated by the existing hotels. In this analysis, we
estimate that approximately 3% of commercial demand is unaccommodated in this
market.
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Table 7-3 1996 Accommodated and Unaccommodated Demand
- --------------------------------------------------------------------------------
Accommodated
Room Night Unaccommodated Unaccommodated
Market Segment Demand Demand Percentage Room Night Demand
- --------------------------------------------------------------------------------
Commercial 152,000 3.0% 4,571
Meeting and Group 46,000 0.0 0
Leisure 39,000 0.0 0
Contract 10,000 0.0 0
------- -----
Totals 248,000 4,571
- --------------------------------------------------------------------------------
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
The following table shows the projected annual change in accommodated and usable
room night demand in the subject property's competitive market. The
unaccommodated demand becomes accommodatable when the hypothetical proposed
property enters the market in 1999.
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Table 7-4 Total Usable Room Night Demand
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<TABLE>
<CAPTION>
Historical 1997 1998 1999 2000 2001 2002 2003
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- 3.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 152,378 156,949 160,088 163,290 166,556 169,887 173,285 176,751
Usable Latent -- 0 0 4,898 4,996 5,096 5,198 5,302
Meeting and Group
Growth Rate -- 2.0% 1.5% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 46,355 47,282 47,991 48,471 48,956 49,446 49,940 50,439
Usable Latent -- 0 0 0 0 0 0 0
Leisure
Growth Rate -- 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 38,576 39,348 39,741 40,138 40,539 40,944 41,353 41,767
Usable Latent -- 0 0 0 0 0 0 0
Contract
Growth Rate -- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Accommodated Demand 10,403 10,403 10,403 10,403 10,403 10,403 10,403 10,403
Usable Latent -- 0 0 0 0 0 0 0
Totals
Commercial 152,378 156,949 160,088 168,188 171,552 174,983 178,483 182,053
Meeting and Growth 46,355 47,282 47,991 48,471 48,956 49,446 49,940 50,439
Leisure 38,576 39,348 39,741 40,138 40,539 40,944 41,353 41,767
Contract 10,403 10,403 10,403 10,403 10,403 10,403 10,403 10,403
------- ------- ------- ------- ------- ------- ------- -------
TOTAL DEMAND 247,712 253,982 258,223 267,200 271,450 275,776 280,179 284,662
Annual Forecasted Growth -- 2.5% 1.7% 3.5% 1.6% 1.6% 1.6% 1.6%
</TABLE>
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 970 guestrooms.
Based on our research and discussions with local planning officials, no new
hotels are proposed or under construction in the area. However, as a result of
the market's relatively high occupancy, we assume that a 120-room,
limited-service hotel will open on January 1, 1999. This new property is
projected to add 43,800 rooms to the guestroom supply in 1999. The following
table shows the projected competitive supply of available rooms and available
room nights. To calculate the annual number of available room nights, the number
of available rooms is multiplied by 365.
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Table 7-5 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------------------------
Historical 247,712 354,050 70 %
1997 253,982 354,050 72
1998 258,223 354,050 73
1999 267,200 397,850 67
2000 271,450 397,850 68
2001 275,776 397,850 69
2002 280,179 397,850 70
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
In developing our forecasts, we have attempted to mirror long-term cyclical
patterns in the lodging industry. The previous table illustrates that the
overall competitive occupancy is expected to reach 73% by 1998. Following the
assumed opening of the 120-room, limited-service hotel in January of 1999, this
level is expected to decline to 67% in 1999, and to grow to 68% by 2000. The
overall competitive occupancy is then projected to recover after 2000, reaching
a level of 70% in 2002.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or contract), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate each property's position in the market based
on its ability to compete with other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market range from 147 to 192. The Ramada Rochelle Park is the most competitive
property in the commercial market in 1996, with an index of 192, followed by the
Holiday Inn Hasbrouck Heights, at 153. The subject
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 89
Average Rate
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HVS
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International
=============
property's commercial segment index of 149 is higher than the aggregate index of
the secondary competitors.
As a result of the recent renovation and the continued repositioning of the
subject property, we expect the Howard Johnson Plaza to penetrate the commercial
market more effectively. To reflect the more focused management strategy and
improved facilities, the subject property's commercial segment competitive index
is projected to increase to 160 in 1997, and to remain at this level in
subsequent years. This stabilized level is lower than that of the Ramada
Rochelle Park; the Ramada is expected to remain the leader in this market, due
to the hotel's corporate strength in this particular segment. The new
limited-service hotel is expected to attain a stabilized commercial segment
index of 175 in 2001, which is above the level of subject property, but below
that of the Ramada. The following table shows the projected commercial segment
competitive indexes of the area's hotels.
================================================================================
Table 7-6 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Historical 1997 1998 1999 2000 2001 2002
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property 149 160 160 160 160 160 160
Holiday Inn Hasbrouck Heights 153 153 153 153 153 153 153
Holiday Inn Saddle Brook 149 149 149 149 149 149 149
Ramada Rochelle Park 192 192 192 192 192 192 192
Secondary 147 147 147 147 147 147 147
Proposed Hotel --- --- --- 155 165 175 175
</TABLE>
- --------------------------------------------------------------------------------
Meeting and Group Segment
As a result of their relatively large inventory of function space (coupled with
a relatively small number of guestrooms), the Holiday Inn Saddle Brook is the
most competitive property in this segment, at 74. Again, as a result of the
renovation that took place in 1995, the Howard Johnson's meeting and group
competitive index is expected to increase to 30 in 1997. The proposed hotel is
expected to achieve a stabilized index of 35 in this segment, which is just
above that of the subject property; because the proposed property is
limited-service in nature, it is not expected to be very competitive in this
segment. No other changes are anticipated for meeting and group segment demand.
The following table illustrates the competitive indexes in the meeting and group
segment.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 90
Average Rate
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HVS
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International
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================================================================================
Table 7-7 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Historical 1997 1998 1999 2000 2001 2002
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property 23 30 30 30 30 30 30
Holiday Inn Hasbrouck Heights 55 55 55 55 55 55 55
Holiday Inn Saddle Brook 74 74 74 74 74 74 74
Ramada Rochelle Park 41 41 41 41 41 41 41
Secondary 44 44 44 44 44 44 44
Proposed Hotel -- -- -- 25 30 35 35
</TABLE>
- --------------------------------------------------------------------------------
Leisure Segment
We anticipate the subject property's leisure segment competitive index to
decline to 50 in 1997, as leisure demand is displaced due to a greater amount of
accommodated commercial and meeting and group demand at the subject property.
The proposed hotel is expected to enter the market with a competitive index of
55, which would position this hotel as the market leader for leisure demand from
its opening, and to reach a stabilized index of 70 in this segment. This leisure
segment index is considered appropriate, given the limited-service nature of the
proposed hotel; the lack of meeting space inherent in most limited-service hotel
designs typically leads to more marketing effort towards the leisure traveler
and less effort toward meeting and group travelers. No other changes are
expected in this segment. The following table illustrates the competitive
indexes in the leisure segment.
================================================================================
Table 7-8 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Historical 1997 1998 1999 2000 2001 2002
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property 57 50 50 50 50 50 50
Holiday Inn Hasbrouck Heights 28 28 28 28 28 28 28
Holiday Inn Saddle Brook 25 25 25 25 25 25 25
Ramada Rochelle Park 41 41 41 41 41 41 41
Secondary 49 49 49 49 49 49 49
Proposed Hotel -- -- -- 55 60 70 70
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 91
Average Rate
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=============
HVS
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International
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Contract Segment
As a hotel's occupancy improves, its reliance on contract demand generally
diminishes. Because this segment commands deeply discounted rates, operators
prefer to accommodate more lucrative types of demand whenever possible.
Historically, only the Holiday Inn Hasbrouck Heights has accommodated this
demand. For the purposes of this appraisal, we have assumed that this will
remain the case, and that no additional properties will accommodate contract
demand.
================================================================================
Table 7-9 Contract Segment Competitive Indexes
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Historical 1997 1998 1999 2000 2001 2002
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property 0 0 0 0 0 0 0
Holiday Inn Hasbrouck Heights 42 42 42 42 42 42 42
Holiday Inn Saddle Brook 0 0 0 0 0 0 0
Ramada Rochelle Park 0 0 0 0 0 0 0
Secondary 0 0 0 0 0 0 0
Proposed Hotel -- -- -- -- -- -- --
</TABLE>
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 92
Average Rate
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=============
HVS
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International
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================================================================================
Table 7-10 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial
Demand 156,949 160,088 168,188 171,552 174,983 178,483
Market Share 0.1464 0.1464 0.1306 0.1297 0.1289 0.1289
Capture 22,979 23,439 21,972 22,257 22,547 22,998
Meeting and Group
Demand 47,282 47,991 48,471 48,956 49,446 49,940
Market Share 0.0895 0.0895 0.0842 0.0832 0.0822 0.0822
Capture 4,233 4,296 4,080 4,072 4,065 4,106
Leisure
Demand 39,348 39,741 40,138 40,539 40,944 41,353
Market Share 0.1877 0.1877 0.1596 0.1575 0.1534 0.1534
Capture 7,385 7,458 6,407 6,384 6,280 6,343
Contract
Demand 10,403 10,403 10,403 10,403 10,403 10,403
Market Share 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Capture 0 0 0 0 0 0
------ ------ ------ ------ ------ ------
Total Capture 34,597 35,193 32,460 32,714 32,892 33,446
</TABLE>
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 141 x 365) produces the
projected occupancy percentage.
================================================================================
Table 7-11 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Room Nights
Captured/Year 34,597 35,193 32,459 32,713 32,892 33,447
Available Room Nights 51,465 51,465 51,465 51,465 51,465 51,465
Occupancy 67.22% 68.38% 63.07% 63.56% 63.91% 64.99%
Rounded 67% 68% 63% 64% 64% 65%
</TABLE>
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 93
Average Rate
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HVS
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International
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================================================================================
Table 7-12 Occupancy Forecast for the Subject Property
- --------------------------------------------------------------------------------
Year Occupancy
------------------------------------
1997 67%
1998 68
Stabilized 64
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
occupancies ranging from 63% in 1999 to 65% in 2002, we have chosen to use a
stabilized occupancy level of 64%. The stabilized occupancy is intended to
reflect the anticipated results of the property over its remaining economic
life, given any and all changes in the life cycle of the hotel. Thus, the
stabilized occupancy excludes from consideration any abnormal relationship
between supply and demand, as well as any non-recurring conditions that may
result in unusually high or low occupancies. Although the subject property may
operate at occupancies above this stabilized level, we believe that it is
equally possible for new competition and temporary economic downturns to force
the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Competitive Positioning
The Howard Johnson Plaza's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 94
Average Rate
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=============
HVS
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International
=============
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one cannot
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by RevPAR, which reflects a property's
ability to maximize rooms revenue. The following table summarizes the 1996
average rate and RevPAR of the subject property and its competitors.
================================================================================
Table 7-13 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
- --------------------------------------------------------------------------------
Subject Property $63.00 $39.69
Holiday Inn Hasbrouck Heights 66.00 50.16
Holiday Inn Saddle Brook 73.00 49.64
Ramada Rochelle Park 66.00 49.50
------ ------
Averages $66.82 $47.81
- --------------------------------------------------------------------------------
The Holiday Inn Saddle Brook maintains the highest average rate in 1996,
projected at $73 for year-end 1996, followed by the Holiday Inn Hasbrouck
Heights and the Ramada Rochelle Park, at $66. It is also important to note that
the average rate at the Holiday Inn Hasbrouck Heights is discounted due to its
accommodation of contract business, which accounts for approximately 15% of
their accommodated demand. The subject property trails, with a projected 1996
year-end rate of $63. This discounted rate is largely due to the historically
poor positioning of the hotel. The hotel reportedly used to accommodate trucking
contracts and local demand which produced low average rates. Additionally, the
historically poor condition of the property necessitated a discounting rate
strategy.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 95
Average Rate
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HVS
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International
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Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This temporary condition may
allow other competitors to achieve corresponding gains by effectively
raising the amount the market will bear. However, if the addition to
supply has a severe impact on the occupancy levels of other hotels, price
competition may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Our forecast of the subject property's average rate recognizes the recent
renovation, which has enhanced the hotel's ability to compete with other local
lodging facilities. We have also taken into account the re-positioning
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 96
Average Rate
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=============
HVS
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International
=============
of the hotel's marketing efforts. Marketwide average rates rose by 4.8% in 1994,
by 3.6% in 1995, and by 7.8% for year-to-date 1996 (according to Smith Travel
Research). In consideration of these trends, as well as the improving market
image of the property and market re-positioning, we believe that it is
reasonable to expect the Howard Johnson's average rate to increase by 4.0% in
1997. In the second projection year, while demand remains strong and supply
remains constant, we expect an increase of 5.0% in average rate. From the third
projection year onward, average rate gains are expected to stabilize at the
underlying inflation rate of 3.5% annually. Based on these considerations, the
following table shows our projection of average rate increases.
================================================================================
Table 7-14 Average Rate Forecast
- --------------------------------------------------------------------------------
Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
- -------------------------------------------------------------------------------
Positioned Base --- --- --- $63.00
1997 72 % 3% to 5% 4.0 % 65.53
1998 73 4 to 6 5.0 68.80
Stabilized 67 3 to 4 3.5 71.21
- --------------------------------------------------------------------------------
The following average rates will be used to project the subject property's rooms
revenue.
================================================================================
Table 7-15 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
-------------------------------------------------------------------
1997 67% $65.53
1998 68 68.80
Stabilized 64 71.21
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Highest and Best Use 97
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HVS
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International
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This differential may occur when a site has existing improvements and
the highest and best use of the land differs from the current use. Nonetheless,
the current property use will continue until the value of the land under its
highest and best use exceeds the value of the property in its current use, plus
the cost to remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
<PAGE>
HVS International, Mineola, New York Highest and Best Use 98
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HVS
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be a transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 99
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HVS
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
<PAGE>
HVS International, Mineola, New York Approaches to Value 100
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HVS
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
<PAGE>
HVS International, Mineola, New York Approaches to Value 101
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HVS
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hotel valuation process. As noted in Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 102
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HVS
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International
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================================================================================
10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any non-recurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 103
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HVS
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(2) Ibid.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 104
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HVS
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International
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique." 14
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Howard Johnson Plaza is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1969, and achieved
occupancy levels of 55.4% in 1994 (partial year April through December), 55.7%
in 1995, and 60.4% for year-to-date August 1996. The following income and
expense statements were provided by Ashford Hotel Corporation, and are
unaudited. Where applicable, we have reorganized the statements in accordance
with the Uniform System of Accounts for Hotels.
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Table 10-1 Historical Operating Performance ($+,000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Partial Year Ending August: 1996 1995
--------------------------------------------- ---------------------------------------------
Total Rooms: 141 141
Occupied Rooms: 20,069 16,451
Complimentary Rooms: 711 1,766
Days Open: 244 Amount per Amount per 243 Amount per Amount per
Occupancy: 60.4% Percentage Available Occupied 53.2% Percentage Available Occupied
Average Rate: $63.10 of Revenue Room Room $60.10 of Revenue Room Room
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,266 89.6 % $8,981 $63.10 $989 88.6 % $7,012 $60.10
Telephone 59 4.2 419 2.94 42 3.8 299 2.56
Net Other Income 88 6.2 626 4.40 85 7.6 603 5.17
Total 1,414 100.0 10,026 70.44 1,116 100.0 7,913 67.82
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES
Rooms 240 18.9 1,700 11.94 224 22.6 1,586 13.60
Telephone 31 52.9 222 1.56 26 60.7 181 1.55
Total 271 19.2 1,922 13.50 249 22.3 1,767 15.15
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,143 80.8 8,104 56.94 867 77.7 6,146 52.68
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 190 13.4 1,347 9.46 164 14.7 1,166 9.99
Management Fee 43 3.1 307 2.16 35 3.1 245 2.10
Marketing 77 5.5 548 3.85 134 12.0 952 8.16
Franchise Fees 67 4.7 473 3.32 53 4.7 373 3.20
Property Oper. & Maint. 127 9.0 902 6.34 91 8.2 648 5.56
Energy 126 8.9 893 6.27 157 14.1 1,113 9.54
Total 630 44.6 4,469 31.40 634 56.8 4,497 38.54
- ------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 513 36.2 3,635 25.54 232 20.9 1,649 14.14
- ------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 100 7.1 709 4.98 85 7.6 600 5.14
Insurance 24 1.7 174 1.22 23 2.0 162 1.39
Reserve for Replacement 53 3.8 376 2.64 46 4.1 326 2.80
Ground Lease 130 9.2 923 6.48 130 11.7 923 7.91
Total 308 21.8 2,182 15.33 284 25.4 2,011 17.24
- ------------------------------------------------------------------------------------------------------------------------------
NET INCOME $205 14.4 % $1,453 $10.21 ($51) -4.5 % ($362) ($3.10)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
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Table 10-2 Historical Operating Performance ($+,000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Year 1995 1994 (Partial Year, Starting April)
------------------------------------------- -------------------------------------------
Total Rooms: 141 141
Occupied Rooms: 26,038 17,517
Complimentary Rooms: 2,637 1,236
Days Open: 365 Amount per Amount per 240 Amount per Amount per
Occupancy: 55.7% Percentage Available Occupied 55.4% Percentage Available Occupied
Average Rate: $60.93 of Revenue Room Room $52.65 of Revenue Room Room
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,586 88.3 % $11,251 $60.93 $922 88.4 % $6,540 $52.65
Telephone 71 4.0 505 2.74 30 2.9 215 1.73
Net Other Income 138 7.7 981 14.02 91 8.7 645 5.19
Total 1,796 100.0 12,738 68.98 1,043 100.0 7,400 59.57
- --------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES
Rooms 365 23.0 2,589 14.02 199 21.6 1,415 11.39
Telephone 48 66.8 337 1.83 22 72.0 154 1.24
Total 413 23.0 2,926 15.84 221 21.2 1,569 12.63
- --------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,383 77.0 9,812 53.13 822 78.8 5,831 46.94
- --------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 260 14.5 1,842 9.97 164 15.7 1,165 9.38
Management Fee 55 3.1 393 2.13 32 3.1 226 1.82
Marketing 211 11.7 1,496 8.10 51 4.9 364 2.93
Franchise Fees 84 4.6 592 3.21 49 4.7 347 2.79
Property Oper. & Maint. 144 8.0 1,020 5.53 103 9.8 728 5.86
Energy 221 12.3 1,569 8.50 93 8.9 661 5.32
Total 975 54.2 6,913 37.43 492 47.1 3,491 28.10
- --------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 409 22.8 2,899 15.70 330 31.7 2,340 18.84
- --------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 127 7.1 902 4.88 66 6.4 471 3.80
Insurance 34 1.9 239 1.29 31 2.9 218 1.76
Reserve for Replacement 74 4.1 524 2.84 0 0.0 0 0.00
Ground Lease 195 10.9 1,384 7.50 114 10.9 807 6.50
Total 430 24.0 3,049 16.51 211 20.2 1,497 12.05
- --------------------------------------------------------------------------------------------------------------------------------
NET INCOME ($21) -1.2 % ($150) ($0.81) $119 11.5 % $843 $6.79
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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These historical income and expense statements show that operating efficiencies
have been achieved in the rooms department year-to-date, showing a decline from
22.6% to 18.9%. Efficiencies have also been achieved in the telephone
department; expenses in this department were 72.0% of telephone revenue in 1994,
and 66.8% in 1995; year-to-date efficiencies have also been achieved,
illustrating a decline from 60.7% to 52.9%. Operating expenses have remained
relatively stable; a fluctuation in marketing expense is attributed to a
regional marketing director's salary that was temporarily allocated in its
entirety to the subject property. Declines achieved in energy for year-to-date,
1996 are attributed to the assignment of energy expenses allocated with the
restaurant to the restaurant lessee.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed-and-variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed, and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
55.7%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-3 Base-Year Statement of Income and Expense ($+,000)
- --------------------------------------------------------------------------------
Calendar Year: 1995
--------------------------------------------
Number of Rooms: 141
Occupancy: 55.7% Percent of Amount per Amount per
Average Rate: $60.93 Total Available Occupied
Occupied Rooms: 26,038 Revenue Room Room
- --------------------------------------------------------------------------------
Revenue:
Rooms $1,586 88.3 % $11,251 $60.93
Telephone 71 4.0 505 2.74
Net Other Income 138 7.7 981 5.31
Total Revenue 1,796 100.0 12,738 68.98
- --------------------------------------------------------------------------------
Expenses:
Rooms * 397 25.0 2,813 15.23
Telephone * 40 56.8 287 1.55
Administrative & General 278 15.5 1,969 10.66
Management Fee 54 3.0 382 2.07
Marketing 163 9.1 1,156 6.26
Franchise Fees 63 3.5 450 2.44
Property Oper. & Maint. 158 8.8 1,122 6.08
Energy 183 10.2 1,295 7.01
Property Taxes 144 8.0 1,023 5.54
Insurance 42 2.4 300 1.62
Reserve for Replacement 72 4.0 510 2.76
Ground Lease 195 10.9 1,383 7.49
Total Expenses 1,789 99.6 12,689 68.72
- --------------------------------------------------------------------------------
Net Income $7 0.4 % $49 $0.26
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-4 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
----- -----
Averages 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5%.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
----------------------------------------------------------
1997 2.4%
1998 5.0
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed-and-variable component relationships.
Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
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Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 Stabilized
---------------------------------------------------------------------------
Forecast of Occupancy Percentage 67.0 % 68.0 % 64.0 %
Forecast of Average Rate $65.53 $68.80 $71.21
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Number Forecast of
Calendar Projected Average Number of Days Rooms Revenue
Years Occupancy Room Rate of Units in Year (+,000)
- --------------------------------------------------------------------------------
1997 67.0 X $65.53 X 141 X 365 = $2,260
1998 68.0 X 68.80 X 141 X 365 = 2,408
Stabilized 64.0 X 71.21 X 141 X 365 = 2,346
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the de-regulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. De-regulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased - in some cases,
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the
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hotel loses the revenue associated with long-distance tariffs and mark-ups, and
only receives an access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed-and-variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-8 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Revenue (+,000) $ 90 $ 95 $ 93
Percent of Total Revenue 3.6% 3.6% 3.6%
Amount Per Available Room $ 638 $ 674 $ 660
Amount Per Occupied Room $ 2.61 $ 2.71 $ 2.82
- --------------------------------------------------------------------------------
Net Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
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o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed-and-variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-9 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Net Other Income (+,000) $ 157 $ 164 $ 166
Percent of Total Revenue 6.3% 6.1% 6.4%
Amount Per Available Room $ 1,113 $ 1,163 $ 1,177
Amount Per Occupied Room $ 4.55 $ 4.69 $ 5.04
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
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Table 10-10 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Rooms Expense (+,000) $ 480 $ 500 $ 503
Percent of Rooms Revenue 21.2% 20.8% 21.4%
Amount per Available Room $ 3,404 $ 3,546 $ 3,567
Amount per Occupied Room $ 13.92 $ 14.29 $ 15.27
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-11 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Telephone Expense (+,000) $ 46 $ 48 $ 49
Percent of Telephone Revenue 51.1% 50.5% 52.7%
Amount per Available Room $ 326 $ 340 $ 348
Amount per Occupied Room $ 1.33 $ 1.37 $ 1.49
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges;
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provision for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
================================================================================
Table 10-12 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Administrative &
General Expense (+,000) $ 325 $ 339 $ 344
Percentage of Total Revenue 13.0% 12.7% 13.2%
Amount per Available Room $ 2,305 $ 2,404 $ 2,440
Amount per Occupied Room $ 9.43 $ 9.69 $ 10.44
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive
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portion is often subordinated to debt service and does not appear in a forecast
of net income before debt service. Basic hotel management fees are almost always
based on a percentage of total revenue, which means they have no fixed
component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Employers Corporation; the
management contract allows for a sum equal to 3% of gross revenues to be paid as
a management fee. Based on our review of the current market for management
contracts, we are of the opinion that this fee is consistent with prevailing
market terms. Applying this management fee structure to the projection of total
revenue yields the following forecast of the subject property's management fee.
================================================================================
Table 10-13 Forecast of Management Fee (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Management Fee Expense (+,000) $ 75 $ 80 $ 78
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique, in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
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Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed, with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a
fixed-and-variable component model.
================================================================================
Table 10-14 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Marketing Expense (+,000) $ 190 $ 199 $ 202
Percentage of Total Revenue 7.6% 7.5% 7.8%
Amount per Available Room $ 1,348 $ 1,411 $ 1,433
Amount per Occupied Room $ 5.51 $ 5.69 $ 6.13
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Howard Johnson for the use of the
company's name, trade marks, and service marks. The following table illustrates
the projection of the subject property's franchise fee.
================================================================================
Table 10-15 Forecast of Franchise Fee (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Franchise Fees Expense $ 89 $ 94 $ 92
- --------------------------------------------------------------------------------
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Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure, and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
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================================================================================
Table 10-16 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Property Oper
& Maint. Expense (+,000) $ 175 $ 181 $ 186
Percentage of Total Revenue 7.0% 6.8% 7.1%
Amount per Available Room $ 1,241 $ 1,284 $ 1,319
Amount per Occupied Room $ 5.08 $ 5.17 $ 5.65
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-17 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Total Energy Expense (+,000) $ 201 $ 209 $ 215
Percentage of Total Revenue 8.0% 7.8% 8.3%
Amount per Available Room $ 1,426 $ 1,482 $ 1,525
Amount per Occupied Room $ 5.83 $ 5.97 $ 6.53
- --------------------------------------------------------------------------------
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Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-18 Forecast of Property Taxes (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Forecast of Property Taxes $ 155 $ 160 $ 166
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $45,000 in 1997 - the first projection period. In subsequent
years, this amount is assumed to increase in tandem with inflation. The
following table outlines our projection of insurance expense.
================================================================================
Table 10-19 Forecast of Insurance Expense (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Forecast of Insurance Expense $ 45 $ 47 $ 49
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
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Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-20 Forecast of Reserve for Replacement (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Reserve for Replacement Expense $ 100 $ 107 $ 104
- --------------------------------------------------------------------------------
Ground Lease
The subject property is subject to a ground lease. The terms of this lease are
included in the Addenda to this report. The following table summarizes the
projected ground lease payments.
================================================================================
Table 10-21 Ground Lease Payment Projections (+,000)
- --------------------------------------------------------------------------------
1997 1998 Stabilized
- --------------------------------------------------------------------------------
Ground Lease $ 209 $ 216 $ 224
- --------------------------------------------------------------------------------
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Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning January 1, 1997, and are
expressed in inflated dollars for each year.
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================================================================================
Table 10-22 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History: Howard Johnson Plaza, Saddle
Brook, New Jersey
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
---------------------------------
Calendar Years: 1995 1997
Number of Rooms: 141 141
Occupancy: 55.7% 67.0%
Average Rate: $60.93 $65.53
Days Open: 365 365
Occupied Rooms: 26,038 %Gross PAR POR 34,482 %Gross PAR POR
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,586 88.3 % $11,251 $60.93 $2,260 90.1 % $16,028 $65.54
Telephone 71 4.0 505 2.74 90 3.6 638 2.61
Net Other Income 138 7.7 981 5.31 157 6.3 1,113 4.55
Total Revenues 1,796 100.0 12,738 68.98 2,507 100.0 17,780 72.71
- ---------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 365 23.0 2,589 14.02 480 21.2 3,404 13.92
Telephone 48 66.8 337 1.83 46 51.1 326 1.33
Total Dept. Expenses 413 23.0 2,926 15.84 526 21.0 3,730 15.25
- ---------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,383 77.0 9,812 53.13 1,981 79.0 14,050 57.45
- ---------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 260 14.5 1,842 9.97 325 13.0 2,305 9.43
Management Fee 55 3.1 393 2.13 75 3.0 532 2.18
Marketing 211 11.7 1,496 8.10 190 7.6 1,348 5.51
Franchise Fees 84 4.6 592 3.21 89 3.6 631 2.58
Property Oper. & Maint. 144 8.0 1,020 5.53 175 7.0 1,241 5.08
Energy 221 12.3 1,569 8.50 201 8.0 1,426 5.83
Total Operating Expenses 975 54.2 6,913 37.43 1,055 42.2 7,482 30.60
- ---------------------------------------------------------------------------------------------------------
HOUSE PROFIT 409 22.8 2,899 15.70 926 36.8 6,567 26.85
- ---------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 127 7.1 902 4.88 155 6.2 1,099 4.50
Insurance 34 1.9 239 1.29 45 1.8 319 1.31
Reserve for Replacement 74 4.1 524 2.84 100 4.0 709 2.90
Ground Lease 195 10.9 1,384 7.50 209 8.3 1,482 6.06
Total 430 24.0 3,049 16.51 509 20.3 3,610 14.76
- ---------------------------------------------------------------------------------------------------------
NET INCOME ($21) (1.2) (149) ($0.81) $417 16.5 $2,957 $12.09
=========================================================================================================
Telephone/Rooms 4.5% 4.0%
Other Income/Rooms 8.7% 6.9%
<CAPTION>
Calendar Years: 1998 Stabilized
Number of Rooms: 141 141
Occupancy: 68.0% 64.0%
Average Rate: $68.80 $71.21
Days Open: 365 365
Occupied Rooms: 34,996 %Gross PAR POR 32,938 %Gross PAR POR
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,408 90.3 % $17,078 $68.81 $2,346 90.0 % $16,638 $71.23
Telephone 95 3.6 674 2.71 93 3.6 660 2.82
Net Other Income 164 6.1 1,163 4.69 166 6.4 1,177 5.04
Total Revenues 2,667 100.0 18,915 76.21 2,605 100.0 18,475 79.09
- --------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 500 20.8 3,546 14.29 503 21.4 3,567 15.27
Telephone 48 50.5 340 1.37 49 52.7 348 1.49
Total Dept. Expenses 548 20.5 3,887 15.66 552 21.2 3,915 16.76
- --------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,119 79.5 15,028 60.55 2,053 78.8 14,560 62.33
- --------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 339 12.7 2,404 9.69 344 13.2 2,440 10.44
Management Fee 80 3.0 567 2.29 78 3.0 553 2.37
Marketing 199 7.5 1,411 5.69 202 7.8 1,433 6.13
Franchise Fees 94 3.5 667 2.69 92 3.5 652 2.79
Property Oper. & Maint. 181 6.8 1,284 5.17 186 7.1 1,319 5.65
Energy 209 7.8 1,482 5.97 215 8.3 1,525 6.53
Total Operating Expenses 1,102 41.3 7,816 31.49 1,117 42.9 7,922 33.91
- --------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,017 38.2 7,213 29.06 936 35.9 6,638 28.42
- --------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 160 6.0 1,135 4.57 166 6.4 1,177 5.04
Insurance 47 1.8 333 1.34 49 1.9 348 1.49
Reserve for Replacement 107 4.0 759 3.06 104 4.0 738 3.16
Ground Lease 216 8.1 1,532 6.17 224 8.6 1,589 6.80
Total 530 19.9 3,759 15.14 543 20.9 3,851 16.49
- --------------------------------------------------------------------------------------------------------
NET INCOME $487 18.3 $3,454 $13.92 $393 15.0 $2,787 $11.93
========================================================================================================
Telephone/Rooms 3.9% 4.0%
Other Income/Rooms 6.8% 7.1%
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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Table 10-23 Ten-Year Forecast of Income and Expense, Howard Johnson Plaza,
Saddle Brook, New Jersey
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years: 1997 1998 1999 2000 2001 2002
-------------- -------------- -------------- -------------- -------------- -------------
Number of Rooms: 141 141 141 141 141 141
Occupied Rooms: 34,482 34,996 32,938 32,938 32,938 32,938
Occupancy: 67.0% % of 68.0% % of 64.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $65.53 Gross $68.80 Gross $71.21 Gross $73.70 Gross $76.28 Gross $78.95 Gross
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,260 90.1% $2,408 90.3% $2,346 90.0% $2,428 90.0% $2,513 90.1% $2,601 90.0%
Telephone 90 3.6 95 3.6 93 3.6 96 3.6 99 3.5 103 3.6
Net Other Income 157 6.3 164 6.1 166 6.4 172 6.4 178 6.4 184 6.4
Total 2,507 100.0 2,667 100.0 2,605 100.0 2,696 100.0 2,790 100.0 2,888 100.0
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
DEPARTMENTAL EXPENSES *
Rooms 480 21.2 500 20.8 503 21.4 521 21.5 539 21.4 558 21.5
Telephone 46 51.1 48 50.5 49 52.7 51 53.1 52 52.5 54 52.4
Total 526 21.0 548 20.5 552 21.2 572 21.2 591 21.2 612 21.2
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
DEPARTMENTAL INCOME 1,981 79.0 2,119 79.5 2,053 78.8 2,124 78.8 2,199 78.8 2,276 78.8
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
OPERATING EXPENSES
Administrative & General 325 13.0 339 12.7 344 13.2 356 13.2 368 13.2 381 13.2
Management Fee 75 3.0 80 3.0 78 3.0 81 3.0 84 3.0 87 3.0
Marketing 190 7.6 199 7.5 202 7.8 209 7.8 216 7.7 224 7.8
Franchise Fees 89 3.6 94 3.5 92 3.5 95 3.5 99 3.5 102 3.5
Property Oper. & Maint. 175 7.0 181 6.8 186 7.1 193 7.2 200 7.2 207 7.2
Energy 201 8.0 209 7.8 215 8.3 223 8.3 230 8.2 238 8.2
Total 1,055 42.2 1,102 41.3 1,117 42.9 1,157 43.0 1,197 42.8 1,239 42.9
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
HOUSE PROFIT 926 36.8 1,017 38.2 936 35.9 967 35.8 1,002 36.0 1,037 35.9
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
FIXED EXPENSES
Property Taxes 155 6.2 160 6.0 166 6.4 171 6.3 177 6.3 184 6.4
Insurance 45 1.8 47 1.8 49 1.9 50 1.9 52 1.9 54 1.9
Reserve for Replacement 100 4.0 107 4.0 104 4.0 108 4.0 112 4.0 116 4.0
Ground Lease 209 8.3 216 8.1 224 8.6 232 8.6 240 8.6 248 8.6
Total 509 20.3 530 19.9 543 20.9 561 20.8 581 20.8 602 20.9
- ---------------------------- -------------- -------------- -------------- -------------- -------------- -------------
NET INCOME $417 16.5% $487 18.3% $393 15.0% $406 15.0% $421 15.2% $435 15.0%
============================ ============== ============== ============== ============== ============== =============
<CAPTION>
Calendar Years: 2003 2004 2005 2006
------------- -------------- -------------- -------------
Number of Rooms: 141 141 141 141
Occupied Rooms: 32,938 32,938 32,938 32,938
Occupancy: 64.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $81.72 Gross $84.58 Gross $87.54 Gross $90.60 Gross
- ---------------------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,692 90.1% $2,786 90.0% $2,883 90.0% $2,984 90.0%
Telephone 106 3.5 110 3.6 114 3.6 118 3.6
Net Other Income 190 6.4 197 6.4 204 6.4 211 6.4
Total 2,988 100.0 3,093 100.0 3,201 100.0 3,313 100.0
- ---------------------------- ------------- -------------- -------------- -------------
DEPARTMENTAL EXPENSES *
Rooms 578 21.5 598 21.5 619 21.5 640 21.4
Telephone 56 52.8 58 52.7 60 52.6 62 52.5
Total 634 21.2 656 21.2 679 21.2 702 21.2
- ---------------------------- ------------- -------------- -------------- -------------
DEPARTMENTAL INCOME 2,354 78.8 2,437 78.8 2,522 78.8 2,611 78.8
- ---------------------------- ------------- -------------- -------------- -------------
OPERATING EXPENSES
Administrative & General 395 13.2 408 13.2 423 13.2 437 13.2
Management Fee 90 3.0 93 3.0 96 3.0 99 3.0
Marketing 232 7.8 240 7.8 248 7.7 257 7.8
Franchise Fees 106 3.5 109 3.5 113 3.5 117 3.5
Property Oper. & Maint. 214 7.2 221 7.1 229 7.2 237 7.2
Energy 247 8.3 255 8.2 264 8.2 274 8.3
Total 1,284 43.0 1,326 42.8 1,373 42.8 1,421 43.0
- ---------------------------- ------------- -------------- -------------- -------------
HOUSE PROFIT 1,070 35.8 1,111 36.0 1,149 36.0 1,190 35.8
- ---------------------------- ------------- -------------- -------------- -------------
FIXED EXPENSES
Property Taxes 190 6.4 197 6.4 204 6.4 211 6.4
Insurance 56 1.9 58 1.9 60 1.9 62 1.9
Reserve for Replacement 120 4.0 124 4.0 128 4.0 133 4.0
Ground Lease 257 8.6 266 8.6 275 8.6 285 8.6
Total 623 20.9 645 20.9 667 20.9 691 20.9
- ---------------------------- ------------- -------------- -------------- -------------
NET INCOME $447 14.9% $466 15.1% $482 15.1% $499 14.9%
============================ ============= ============== ============== =============
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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================================================================================
Table 10-24 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
----------------------------------------------------------------------
1st Quarter 1996 7.79% 7.37%
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find
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that lenders who are active in the market are using loan-to-value ratios of 65%
to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-25 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $ 23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-26 Equity Yield Requirements
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Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus, it inherently incorporates the cost of debt and
equity capital. The terminal capitalization rate can be derived through a
mortgage and equity band of investment technique which calculates the weighted
average cost of the capital used in a hotel investment. Combining the mortgage
financing terms derived previously - namely, a 70% loan-to-value ratio and a
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0.111856 debt service constant, with a cash-on-cash equity dividend rate of 12%
produces the following overall capitalization rate.
Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70 x 0.11186 = 7.82990
Equity 30 x 0.12000 = 3.60000
--------
Overall Capitalization Rate 11.42990
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 12%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-27 Summary of Valuation Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $3,375,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22%, then $3,375,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $ 2,363,000
Equity Component (30%) 1,013,000
-----------
Total $11,099,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $ 2,363,000
Mortgage Constant 0.111856
-----------
Annual Debt Service $ 264,315
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-28 Forecast of Net Income to Equity
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Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
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1997 $ 398,000 - $ 266,000 = $ 132,000
1998 467,000 - 266,000 = 201,000
1999 401,000 - 266,000 = 135,000
2000 416,000 - 266,000 = 150,000
2001 432,000 - 266,000 = 166,000
2002 447,000 - 266,000 = 181,000
2003 461,000 - 266,000 = 195,000
2004 477,000 - 266,000 = 211,000
2005 493,000 - 266,000 = 227,000
2006 511,000 - 266,000 = 245,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ( $516,000 / 0.120 ) $ 4,300,000
Less: Brokerage and Legal Fees 129,000
Mortgage Balance 1,702,000
-----------
Net Sale Proceeds to Equity $ 2,469,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-29 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
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Total Property $ 3,375,000 14.2%
Mortgage 2,363,000 9.4
Equity 1,013,000 22.0
Note: Whereas the mortgage constant and value are calculated on the basis of
monthly mortgage payments, the mortgage yield in this proof assumes single
annual payments. As a result, the proof's derived yield may be slightly
less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $3,375,000 value is correct, based on the assumptions
used in this approach.
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Table 10-30 Total Property Yield
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Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.2% Cash Flow
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1997 $ 417,000 x 0.875650 = $ 365,000
1998 487,000 x 0.766763 = 373,000
1999 393,000 x 0.671416 = 264,000
2000 406,000 x 0.587926 = 239,000
2001 421,000 x 0.514817 = 217,000
2002 435,000 x 0.450800 = 196,000
2003 447,000 x 0.394743 = 176,000
2004 466,000 x 0.345657 = 161,000
2005 482,000 x 0.302674 = 146,000
2006 4,670,000 * x 0.265037 = 1,238,000
-----------
Total Property Value $ 3,375,000
* 10th year net income of $499,000 plus sales proceeds of $ 4,171,000
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Table 10-31 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $ 264,000 x 0.914362 = $ 241,000
1998 264,000 x 0.836058 = 221,000
1999 264,000 x 0.764460 = 202,000
2000 264,000 x 0.698993 = 185,000
2001 264,000 x 0.639133 = 169,000
2002 264,000 x 0.584399 = 154,000
2003 264,000 x 0.534352 = 141,000
2004 264,000 x 0.488592 = 129,000
2005 264,000 x 0.446750 = 118,000
2006 1,966,000 * x 0.408491 = 803,000
----------
Value of Mortgage Component $2,363,000
* 10th year debt service of $264,000
plus outstanding mortgage balance of $1,702,000
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Table 10-32 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.0% Cash Flow
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1997 $ 153,000 x 0.819535 = $ 125,000
1998 223,000 x 0.671637 = 150,000
1999 129,000 x 0.550430 = 71,000
2000 142,000 x 0.451097 = 64,000
2001 157,000 x 0.369689 = 58,000
2002 171,000 x 0.302973 = 52,000
2003 183,000 x 0.248297 = 45,000
2004 202,000 x 0.203488 = 41,000
2005 218,000 x 0.166766 = 36,000
2006 2,704,000 * x 0.136670 = 370,000
----------
Value of Equity Component $1,012,000
* 10th year net income to equity of $235,000 plus sales proceeds of $2,469,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.29%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 13% to 15%, it is our opinion that a 14% discount factor would be
appropriate for the Howard Johnson Plaza. The following table illustrates the
discounted cash flow analysis using a 14% discount factor.
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Table 10-33 Discounted Cash Flow Analysis
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Discount
Calendar Net Factor Discounted
Year Income @ 14.0% Cash Flow
--------------------------------------------------------------
1997 $ 417,000 0.87719 $ 365,789
1998 487,000 0.76947 374,731
1999 393,000 0.67497 265,264
2000 406,000 0.59208 240,385
2001 421,000 0.51937 218,654
2002 435,000 0.45559 198,180
2003 447,000 0.39964 178,638
2004 466,000 0.35056 163,361
2005 482,000 0.30751 148,219
2006 4,670,000 * 0.26974 1,259,704
Estimated Market Value: $3,412,924
(Say): $3,400,000
Reversion Analysis
------------------
11th Year's Net Income $516,000
Capitalization Rate 12.0%
Total Sales Proceeds $4,300,000
Less: Broker & Legal @ 3.0% 129,000
----------
Net Sales Proceeds $4,171,000
* 10th year net income of $499,000 plus sales proceeds of $4,171,000
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled, Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors. . . . This technique is simple, but less reliable
because the derivation of the discount rate has little support." In light of
this consideration, we have relied on the $3,375,000 value conclusion indicated
by Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and
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unsubstantiated adjustments. Each adjustment represents a potential for error,
and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
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As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly - to 92 - in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
All of the following sales reflect the transfer of a fee simple interest. As the
subject of this appraisal is the leasehold interest in the subject property, the
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comparable sales must be adjusted accordingly. In each of the projection years,
the amount paid by the subject property as ground rent represents roundly 36% of
the net income before payment of ground rent (i.e., the net income to the fee
simple position). Thus, the leasehold interest retains only 64% of the fee
simple net income, while the leased fee interest collects 36% of the net income.
This data forms the basis for the adjustment for the difference in property
rights transferred, whereby the price per room of each transaction is adjusted
downward by 36%.
Sale #1:
- --------
Property: Ramada Hotel
Location: Montvale, NJ
Date of Sale: May, 1996
Sales Price: $6,700,000
Grantor: Lennar Corporation
Grantee: Gami Lovale
Year Opened: 1970
Number of Rooms: 187
Price per Room: $35,829
Price per Room, after
Leasehold Adjustment: $22,931
Confirmed By: Grantee
Sale #2:
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Property: Days Inn
Location: Bensalem, PA
Year of Sale: July, 1995
Sales Price: $4,950,000
Grantor: South Charles Realty
Grantee: Growth Property Investment Managers
Number of Rooms: 136
Price per Room: $36,397
Price per Room, after
Leasehold Adjustment: $23,294
Confirmed By: Landauer Hotel Group
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Sale #3:
- --------
Property: Comfort Inn
Location: Abingdon, Virginia
Date of Sale February, 1995
Sales Price: $2,600,000
Grantor: B&R Enterprises
Grantee: MRS
Number of Rooms: 80
Price per Room: $32,500
Price per Room, after
Leasehold Adjustment: $20,800
Confirmed by: Broker
Sale #4:
- --------
Property: Comfort Inn
Location: Hershey, PA
Date of Sale: March, 1995
Sale Price: $5,200,000
Grantor: N/A
Grantee: Manor Care
Number of Rooms: 125
Price per Room: $41,600
Price per Room, after
Leasehold Adjustment: $26,624
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Sale #5:
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Property: Quality Inn
Location: Woodbury, NY
Date of Sale: August, 1995
Sales Price: $2,900,000
Grantor: Estate of Frederick Phillips, et. al.
Grantee: Woodbury Realty Associates
Number of Rooms: 85
Price per Room: $34,118
Price per Room, after
Leasehold Adjustment: $21,836
Confirmed by: Goodman, Marks Associates
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In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in 1995. The details of this
transaction are summarized as follows
Subject Property:
- -----------------
Property: Howard Johnson Inn (now the Howard Johnson Plaza)
Location: 129 Pehle Avenue East
Saddle Brook, NJ
Date of Sale: August 25, 1994
Allocated Sales Price: $2,378,000
Grantor: Nippon Credit Bank, Ltd.
Grantee: Saddle Brook New Jersey Hotel Limited Partnership
- an entity controlled by Ashford Financial
Corporation
Year Opened: 1969
Number of Rooms: 147 (6 have subsequently been converted to meeting
rooms)
Price per Room: +/-$16,177
Confirmed By: Ashford Financial Corporation
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The subject property was
acquired by Ashford Financial Corporation from Nippon Credit Bank, Ltd. in March
of 1994 as part of a purchase of a mortgage loan secured by 15 hotel properties.
The outstanding principal balance of the non-performing mortgage loan at the
time of acquisition was $72,840,000, and the purchase price was $18,730,000. At
the time of the closing, the mortgage loan was the subject of a settlement
agreement between Nippon Credit Bank, Ltd. and Northeast Hotel Association,
Inc., which was the owner of the subject property. The settlement agreement
called for the conveyance of property deeds in lieu of foreclosure, as well as a
cash payment of $2,000,000 for the settlement of guaranty obligations. The
above-listed price represents an allocation of the total package price rather
than a negotiated value for this single asset. Based on our understanding of the
terms of this transaction, we do not believe that this sale was reflective of
either the market value of the individual hotel or of market value.
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The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecasted to continue this positive trend. As previously discussed, the market
for hotel investments has also improved significantly, due to changes in lender
and investor attitudes. Finally, the property itself has undergone a significant
renovation, with a total of $833,000 spent on upgrading the facilities and
amenities. For these reasons, we are of the opinion that the August, 1995 sale
involving the subject property is not a reliable indicator of the current value
of the hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
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market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
adjusted sales prices range from approximately $20,800 to $26,624 per room, or
$2,900,000 - $3,800,000 for the 141-unit subject property. The income
capitalization approach indicates a value of roundly $25,000 per room, or
roundly $3,400,000, which falls within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1969, and will be approximately 28 years
old, as of the date of this appraisal. There are several issues of obsolescence
with the subject property. As mentioned previously, the structure of the subject
property was not constructed of materials which adequately muffle the noise
created by the adjacent parkway. Furthermore, the subject features a
considerable amount of unused space on the basement level of the property, which
had been previously used for a beauty salon and spa. The transformation of this
space for an alternate use (i.e., meeting space) would require a considerable
capital investment. Following the 1994 acquisition by Ashford Financial
Corporation and the subsequent recent renovation, the physical plant is in good
condition, and planned improvements should address needed renovations in the
pool area in 1997.
The depressed hotel market conditions that prevailed in the late 1980s and the
early 1990s has also led to a degree of external obsolescence. In our opinion,
it is impossible to identify and quantify the impact of these factors on the
property's value with any accuracy, so we will estimate only the replacement
cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled, The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy; the standard category has been used for the
subject property. The results of this survey are presented in the following
table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- - ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $45,000 141 $ 6,345,000
FF&E 12,000 141 1,692,000
Pre-Opening 3,000 141 423,000
Operating Capital 2,200 141 310,200
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Totals $62,200 $ 8,770,200
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
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subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the land.
Land value is then calculated by dividing the economic rent by an appropriate
capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Howard Johnson Plaza appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 4.0% and 5.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.5% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $ 2,224,556
Rental Percentage 0.045
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Economic Ground Rent $ 100,105
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 12%. Applying this indicated capitalization rate to the
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subject property's economic ground rent yields the following estimate of land
value.
Economic Ground Rent $100,105 $ 834,208
------------------------ = ------------ =
Capitalization Rate 0.12
Estimated Land Value (Say) $ 830,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 16% of the subject
property's total value as indicated by the income capitalization approach (on a
fee simple basis).
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $ 8,770,200
Land Value 830,000
-----------
Total Replacement Cost $ 9,600,200
Total Replacement Cost (Say) $ 9,600,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions, and creates an effective barrier to entry for
new competition, thereby reducing the risk associated with the subject
property's income-generating potential. An upward adjustment of the value
indicated by the income capitalization approach is also justified by this
barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation
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estimates, it is our opinion that the cost approach is inapplicable in
estimating the market value of the Howard Johnson Plaza. However, we have
estimated the subject property's replacement cost as new, which may set the
upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 155
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $3,375,000
Sales Comparison(1) $2,900,000 - $3,800,000
Cost (Replacement Cost) $9,600,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
(1) This value indication is based on the assumption that fee-simple property
rights are conveyed.
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $32,500 to $41,600 per available room. The income capitalization approach, on
a fee-simple basis, indicates a per-room value of approximately $37,000. This
sales range does not necessarily warrant any adjustment of the value indicated
by the income capitalization approach.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. In the case of the subject property, the replacement cost is
considerably higher than the value indicated by the income capitalization
approach or the sales comparison approach. This suggests that a slight
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upwards adjustment to the value indicated by the income capitalization approach
may be warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market of the
leasehold interest in the Howard Johnson Plaza - Saddle Brook, as of January 1,
1997, is:
$3,500,000
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly +/-$25,000 per room, which is well
supported by market sales and approximately 3.2% higher than the value indicated
by the income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can
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decrease the property value by as much as the cost to replace the inventory plus
the loss of income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the Howard Johnson Plaza indicates that the personal property and
fixtures are fair condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $12,000 per available room. Assuming an average
useful life of ten years and an effective age of seven years, the value of the
furniture, fixtures, and equipment currently in place is approximately $3,600
per room, or a total of $507,600.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that ". . . any business interest or other intangible item should be
valued separately within the appraisal."(2) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(2) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
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HVS International, Mineola, New York Statement of Assumptions and 159
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
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6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is within the
boundaries of the property described, and that there is no encroachment or
trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 161
Limiting Conditions
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15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor make
provision for the effect of any sharp rise or decline in local or national
economic conditions. To the extent that wages and other operating expenses
may advance during the economic life of the property, we expect that the
prices of rooms, food, beverages, and services will be adjusted to at
least offset those advances. We do not warrant that the estimates will be
attained, but they have been prepared on the basis of information obtained
during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 162
Limiting Conditions
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21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 163
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Rodney G. Clough personally inspected the property described in this
report; that Anne R. Lloyd-Jones and Stephen Rushmore participated in the
analysis and reviewed the findings but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
<PAGE>
HVS International, Mineola, New York Certification 164
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10. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
11. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Rodney G. Clough
-----------------------------------
Rodney G. Clough
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
-----------------------------------
Anne R. Lloyd-Jones
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore, CRE, MAI, CHA
-----------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
SADDLE BROOK
SCHEDULE A
ALL that certain tract, lot and parcel of land lying and being in the Township
of Saddle Brook, County of Bergen, and State of New Jersey, being more
particularly described as follows:
BEGINNING at the intersection of the northerly line of Pehle
Avenue with the dividing line between lands formerly of Rosario Ciuppa and
wife on the south and lands now or formerly of William Smidt and wife on
the north, said point having N.J. Plane Coordinates of N. 755, 908. 142
and E. 2157491.645 and running thence;
Westerly along the northerly line of Pehle Avenue on a bearing
based on N.J. Plane Coordinate System, South 70 degrees 28 minutes 14
seconds West distant 515.00 feet to a point; thence
Northwesterly along coordinate bearing North 67 degrees 32
minutes 00 seconds West distant 79.00 feet to a point; thence
Northerly North 20 degrees 32 minutes 00 seconds West distant
196.00 feet to a point; thence,
Northeasterly, North 33 degrees 43 minutes 00 seconds East
distant 87.00 feet to a point; thence
Northeasterly, North 63 degrees 43 minutes 00 seconds East
distant 327.00 feet to a point; thence;
Southeasterly, South 77 degrees 47 minutes 00 seconds East
distant 162.95 feet to a point; thence
Northeasterly North 63 degrees 01 minutes 30 seconds East
distant 44.51 feet to a point in the dividing line between lands formerly
of Rosario Ciuppa and wife and lands now or formerly of William Smidt and
wife as mentioned in describing the point or place of beginning; thence
Southerly along the said dividing line, South 19 degrees 31
minutes 46 seconds East distant 259.37 feet to the northerly line of Pehle
Avenue, the point or place of BEGINNING.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the exterior of the Subject Property
[GRAPHIC OMITTED]
View of the Subject Property's lobby
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
View of a standard guestroom at the Subject Property
[GRAPHIC OMITTED]
View of the Subject Property's ballroom
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property's indoor swimming pool
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of a standard bathroom at the Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Holiday Inn Saddlebrook
[GRAPHIC OMITTED]
Ramada Rochelle Park
<PAGE>
HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Holiday Inn Hasbrouck Heights
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Howard 1
Johnson License Agreement
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Synopsis of Howard Johnson License Agreement
Date: August 25, 1994
Licensor: Howard Johnson Franchise Systems, Inc.
Licensee: Saddle Brook New Jersey Hotel Limited Partnership
- an entity controlled by Ashford Financial
Corporation
Premises: 129 Pehle Avenue East, Saddle Brook, New Jersey
Term: 15 years
Renewal: No renewal rights conveyed
Fees: Royalty: 4% of gross room revenues
Marketing Fees: 2% of gross room revenues
Room Sales Charge: 2.5% of gross room revenues
Licensor Services: Reservation system, marketing, training
Licensee Obligations: Insurance, minor renovations, courtesy lodging
Termination: Upon default
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Restaurant Lease 1
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Synopsis of Restaurant Lease
Date: March 30, 1967
Current Licensor: Saddle Brook New Jersey Hotel Limited Partnership
- an entity controlled by Ashford Financial
Corporation
Licensee: Allan V. Rose
Term: Original lease: 25 years, with 3 five-year extensions
Amendment: 3 additional five-year extensions
Fixed Annual Rent: Year 1: $12,000
Years 2 - 6: $40,000
Years 7 - 21: $45,000
Years 22 - 26: $50,000
Additional: 5% of gross annual sales over $1,000,000
Comments: Lessor makes structural repairs
Lessee pays all utilities
Lessee pays real estate and personal property taxes
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Hotel 1
Management Agreement
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Synopsis of Hotel Management Agreement
Date: May 16, 1994
Owner: Saddle Brook New Jersey Hotel Limited Partnership
- an entity controlled by Ashford Financial
Corporation
Manager: Remington Employers Corporation
Premises: Howard Johnson Plaza
Term: 15 years
Renewal: 2 five-year extensions
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: Under various conditions of default
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Ground Lease 1
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Synopsis of Ground Lease
Date: March 30, 1967
Current Landlord: Paul Ferber (T/A PLF Company)
Current Lessee: Saddle Brook New Jersey Hotel Limited Partnership
- an entity controlled by Ashford Financial
Corporation
Premises: Howard Johnson Plaza, Saddle Brook, New Jersey
Term: 26 years, commencing 90 days from the execution of
the Lease (expiration date is June 28, 1993)
Renewal: Three extension options, two for periods of 21
years, and one for a period of 33-1/3 years,
provided Tenant notifies landlord of its election
to extent at least 180 days prior to the
expiration of the term (or any extended term)
Rent: Years 2-3: $40,000/per year
Years 7-21: $45,000/per year
Years 22-26: $50,000/per year
Provisions are provided for CPI escalations.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 1
Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 2
Valuation Formula
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This process can be expressed in two algebraic equations that set forth the
mathematical relationships between the known and unknown variables using the
following symbols.
NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
de = Annual cash available to equity
dr = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
fp = Annual constant required to amortize the entire loan during the
projection period
Rr = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/Sn = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (de) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 3
Valuation Formula
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NI - (f x M x V) = de
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
the terminal capitalization rate (Rr). The following formula represents the
property's tenth-year reversionary value.
(NI^11/Rr) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11/Rr), are
calculated by application of the following formula.
b(NI^11/Rr) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (fp) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(fp - i) = P
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 4
Valuation Formula
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If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (dr) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/Rr) - (b(NI^11/Rr) - ((1 - P) x M x V) = dr
Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = de^1
NI^2 - (f x M x V) = de^2
NI^10 - (f x M x V) = de^10
(NI^11/Rr) - (b(NI^11/Rr) - ((1 - P) x M x V) = dr
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 5
Valuation Formula
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Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(de^1 x 1/S^1) + (de^2 x 1/S^2) + . . .
+ (de^10 x 1/S^10) + (dr x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/Rr) - (b(NI^11/Rr)) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the property's value (V) is the only unknown, this equation can be
solved readily.
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 6
Valuation Formula
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Table 1: Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
================================================================================
Table 2: Present Worth of $1 Factor at the Equity Yield Rate
- --------------------------------------------------------------------------------
Present Worth of $1
Calendar Year Factor @22.0%
-------------------------------------------------------------
1997 0.819535
1998 0.671637
1999 0.550430
2000 0.451097
2001 0.369689
2002 0.302973
2003 0.248297
2004 0.203488
2005 0.166766
2006 0.136670
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 x 0.70 x V = 0.078299 V
<PAGE>
HVS International, Mineola, New York Explanation of the Simultaneous 7
Valuation Formula
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Inserting the known variables into the hotel valuation formula produces the
following.
( 417,000 - 0.078299 V ) x 0.819672 +
( 487,000 - 0.078299 V ) x 0.671862 +
( 393,000 - 0.078299 V ) x 0.550707 +
( 406,000 - 0.078299 V ) x 0.451399 +
( 421,000 - 0.078299 V ) x 0.369999 +
( 435,000 - 0.078299 V ) x 0.303278 +
( 447,000 - 0.078299 V ) x 0.248589 +
( 466,000 - 0.078299 V ) x 0.203761 +
( 482,000 - 0.078299 V ) x 0.167017 +
( 499,000 - 0.078299 V ) x 0.136899 +
((( 516,000 / 0.120 ) - ( 0.03 x ( 516,000 / 0.120 )) -
(( 1 - 0.279638 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
Like terms are combined as follows.
$2,282,286 - 0.376214 V = (1 - 0.70) V
$2,282,286 = 0.67621 V
V = $ 2,282,286 / 0.67621
V = $ 3,375,097
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $ 3,400,000
<PAGE>
HVS International, Mineola, New York Qualifications of Rodney G. Clough
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HVS
INTERNATIONAL
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Rodney G. Clough
Employment
1995 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports
and Investment Counseling)
1994 THE MIRAGE HOTEL AND CASINO
Las Vegas, Nevada
Summer, 1993 HYATT REGENCY DENVER DOWNTOWN
Denver, Colorado
1991 THE STATLER HOTEL AND JW MARRIOTT
EXECUTIVE EDUCATION CENTER
Ithaca, New York
1988 UNIVERSITY OF COLORADO CATERING
Boulder, Colorado
Education BS - School of Hotel Administration, Cornell University
(Managing Director, HEC 69)
Professional Cornell Society of Hotelmen
Affiliations
Examples of Bay County Conference Center Keenan & Hewitt
Corporate and Planning Authority Mountain Spa Development
Institutional Capitol Hotel Group OCWEN Financial Corporation
Clients Served City of Portsmouth ITT Sheraton
Fairmont Hotel Management Co. Samoth, Inc.
Grand Heritage Hotels Sumitomo Bank Ltd.
<PAGE>
HVS International, Mineola, New York Qualifications of Rodney G. Clough
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INTERNATIONAL
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Examples of Hotels Florida
Appraised or Evaluated - Floridan Hotel, Tampa
- Proposed Sheraton, Tampa
- Grenelefe Golf and Tennis Resort, Haines City
Illinois
- The Fairmont, Chicago
- Days Inn, Chicago
Kansas
- Broadview Hotel, Wichita
Massachusetts
- Copley Plaza Hotel, Boston
Michigan
- Proposed Conference Center, Bay City
Nevada
- Proposed Mountain Spa Resort, Las Vegas
New York
- Hotel Gregory, Brooklyn
- LaGuardia Ramada, East Elmhurst
- Staten Island Hotel, Staten Island
South Carolina
- Proposed Inn, Charleston
Texas
- Proposed Sheraton, San Antonio
- Holiday Inn Riverwalk North, San Antonio
- Crossroads Inn, San Antonio
Virginia
- Doubletree Hotel, Crystal City
- Proposed Downtown Hotel, Portsmouth
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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INTERNATIONAL
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Rushmore, CRE, MAI, CHA
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
<PAGE>
Hospitality Valuation Services Mineola, New York
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
APPRAISAL
OF
WESTSHORE MALL
HOLLAND, MICHIGAN
LANDAUER
REAL ESTATE COUNSELORS
<PAGE>
APPRAISAL
OF
WESTSHORE MALL
HOLLAND, MICHIGAN
AS OF
DECEMBER 31, 1996
PREPARED FOR
MORGAN STANLEY MORTGAGE CAPITAL, INC.
1585 BROADWAY, 37TH FLOOR
NEW YORK, NY 10036
PREPARED BY
LANDAUER ASSOCIATES, INC.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
<PAGE>
[LETTERHEAD OF LANDAUER REAL ESTATE COUNSELORS]
January 24, 1997
Mr. James E. Flaum
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway, 37th Floor
New York, NY 10036
Re: Westshore Mall
Holland, Michigan
Dear Mr. Flaum:
As directed, we have made an appraisal of the above-captioned property. The
subject property is a regional shopping center which contains 393,949 square
feet of gross leasable area situated on 51.4 acres. The improvements were
completed in 1988. Owned square footage includes the mall anchors: Sears (52,515
square feet), Younkers (69,148 square feet), Steketee's (40,755 square feet) and
JC Penney (51,399 square feet). Two outlot ground leases with a restaurant and
bank are part of the ownership. In addition, a strip center containing 26,087
square feet, located adjoining a Target department store, is part of the
ownership. The ownership also contains about 22.8 acres of vacant land and pad
site; however, the vacant land has not been valued at the instruction of the
client.
The purpose of this self-contained appraisal report is to estimate the Market
Value of the Leased Fee Interest in the real property described herein, subject
to the existing leases and encumbrances, and the general and specific
assumptions and limiting conditions as discussed in the attached report.
The estimate of Market Value is made as of December 31, 1996. It is assumed that
physical and economic conditions affecting the property at the valuation date
are the same as those existing at the date of our inspection. Kevin D. Gray
inspected the property in August 1996. John P. Baker personally inspected the
subject property on January 9, 1997 and John I. Wrzesinski inspected the
property on January 21, 1997.
Based upon our analysis, we estimate the Market Value of the Leased Fee Interest
in Westshore Mall, subject to the existing leases and the assumptions and
limiting conditions contained in this report, as of December 31, 1996, to be:
THIRTY-THREE MILLION DOLLARS
$33,000,000
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
Morgan Stanley Mortgage Capital, Inc.
January 24, 1997
Page Two
A summary of our analyses, opinions, and conclusions is contained in the
following report, of which this letter is a part. Thank you for the opportunity
to be of service.
Respectfully submitted,
LANDAUER ASSOCIATES, INC.
/s/ JCK /s/ John I. Wrzesinski
James C. Kafes, MAI, CRE John I. Wrzesinski, MAI, CRE
Executive Managing Director Senior Managing Director
Certified Michigan Appraiser License #1201002445
/s/ Kevin D. Gray /s/ John P. Baker
Kevin D. Gray, CRE John P. Baker, MAI
Managing Director Director
JCK/JIW/KDG/JPB:mjk
LAI File No. C-302-961/6302
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
TABLE OF CONTENTS
Page
Assumptions and Limiting Conditions..........................................1
Certification................................................................6
Summary of Salient Facts and Conclusions.....................................7
Nature of the Appraisal......................................................8
Identification of the Property and Interest Appraised....................8
Purpose, Function and Date of Appraisal..................................8
Scope of the Appraisal...................................................9
History of Property.....................................................10
Neighborhood Analysis.......................................................11
Property Description........................................................12
Site Analysis...........................................................12
Zoning..................................................................13
Real Estate Taxes.......................................................13
Improvements............................................................14
Highest and Best Use........................................................18
As If Vacant............................................................18
As Improved.............................................................18
Demographic/Area Review.....................................................20
Population Trends.......................................................20
Income Levels...........................................................21
Employment..............................................................21
Conclusion..............................................................23
Retail Market Overview......................................................24
Overview................................................................24
Trade Area Delineation..................................................25
Trade Area Population...................................................26
Income Estimates and Comparisons........................................28
Trade Area Expenditure Potential........................................28
Competitive Retail Analysis.............................................30
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
TABLE OF CONTENTS
Page
Valuation Methodology.......................................................33
Cost Approach...............................................................34
Sales Comparison Approach...................................................35
Elements of Comparison..................................................35
Applicability of Adjustments............................................37
Analysis and Interpretation of Data.....................................38
Income Approach.............................................................40
Discounted Cash Flow ("DCF") Analysis Assumptions.......................40
Revenue.................................................................44
Expenses................................................................49
Occupancy Costs.........................................................53
Capital Items...........................................................54
Cash Flow...............................................................55
Discounted Cash Flow Analysis...........................................56
Rate Selection..........................................................57
Valuation by Discounted Cash Flow Analysis..............................60
Market Value Analysis as of December 31, 1996...........................60
Correlation and Conclusion .................................................62
ADDENDA
Legal Description
Photographs of Subject Property
Recent Leases
Rent Roll
Lease Abstract Reports
Professional Qualifications
<PAGE>
[GRAPHIC OMITTED]
Photo
<PAGE>
[GRAPHIC OMITTED]
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<PAGE>
LANDAUER 1
REAL ESTATE COUNSELORS
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal report has been made with the following general assumptions:
o Title to the property is assumed to be good and marketable unless
otherwise stated. No responsibility is assumed for the legal description
or any legal matter. The property is considered to be under responsible
ownership, management, subject to responsible leasing efforts, and free of
all liens and encumbrances except as specifically discussed herein.
o The definition of value, together with other definitions and assumptions
on which our analyses are based are set forth in appropriate sections of
this report and are to be part of these General Assumptions as if included
here in their entirety.
o The information furnished to the appraisers by the client and others, as
contained in this report, is considered to be from reliable sources and,
where feasible, has been verified; however, no responsibility is assumed
for the accuracy of the information. The appraisers reserve the right to
modify the value conclusion should the accuracy of that information change
subsequent to delivery of this report.
o All engineering is assumed to be correct.
o It is assumed that there are no hidden or unapparent conditions in the
property, soil, subsoil, or structures which would render the property
more or less valuable. No responsibility is assumed for such conditions or
for arranging for engineering which would be required to discover them.
All materials used in the structures on the appraised property are assumed
to be free of asbestos, toxic materials, or any other potential health
risks unless otherwise so stated and identified herein. No opinion is
expressed on structural or mechanical conditions.
o Landauer has reviewed and relied upon the tenant leases or abstracts
provided by the client.
<PAGE>
LANDAUER 2
REAL ESTATE COUNSELORS
o It is assumed that there is full compliance with all applicable federal,
state and local environmental regulations and laws, that all applicable
zoning and use regulations and restrictions have been complied with,
unless a non-conformity has been stated, defined and considered in the
appraisal report.
o It is assumed that all required licenses, certificates of occupancy,
legislative or administrative consents from any local or national
governmental or private entity or organization have been or can be
obtained or renewed for any use on which the value estimate contained in
this report is based.
o It is assumed that the utilization of the land and/or improvements is
within the boundaries or property lines of the property described herein
and that there is no encroachment or trespass unless noted within the
report.
The appraisal report has been made with, and is subject to, the following
general limiting conditions:
o The appraisers herein, by reason of this appraisal report, are not
required to give further consultation, testimony or to be in attendance in
court or at any governmental or other hearing with reference to the
property without prior arrangements having been made relative to such
additional employment.
o The distribution, if any, of the total valuation in this report between
land and improvements applies only under the stated program of
utilization. The separate allocations for land and buildings must not be
used in conjunction with any other appraisal and are invalid if so used.
o Use and disclosure of the contents of this report is governed by the
bylaws and regulations of the Appraisal Institute.
<PAGE>
LANDAUER 3
REAL ESTATE COUNSELORS
o The client may show the reports in their entirety to interested parties
outside its organization. Furthermore, the client may reference Landauer
as its appraiser of record and the limited reports in their entirety only
in any registration statement, prospectus, proxy materials, other offering
materials or other communication (whether oral or written) distributed to
third parties, subject to Landauer's prior written consent to any such
reference. It is the understanding of Landauer that among the uses of the
reports will be the disclosure of their contents in offering materials for
the sale of securities and in various filings pursuant to state and
federal securities laws.
o This appraisal report is based upon and supported by available factual
economic and market data and our interpretation of market conditions as of
the date of the appraisal. Though we believe that our assumptions and
forecasts are well supported, we cannot be held responsible for events
which may alter market and property conditions between the date of
inspection and the effective date of the opinion of value.
o The information furnished to the appraisers by the client and others, as
contained in this report, is considered to be from reliable sources;
however, no responsibility is assumed for its accuracy. The appraisers
reserve the right to modify the value conclusion should the accuracy of
that information change subsequent to delivery of this appraisal report.
o The Americans with Disabilities Act ("ADA") became effective January 26,
1992. Landauer has not made a specific compliance survey and analysis of
this property to determine whether or not it is in conformity with the
various detailed requirements of the ADA. It is possible that a compliance
survey of the property, together with a detailed analysis of the
requirements of the ADA, could reveal that the property is not in
compliance with one or more of the requirements of the Act. If so, this
fact could have a negative effect upon the value of the property. Since we
have no direct evidence relating to this issue, we did not consider
possible non-compliance with the requirements of ADA in estimating the
value of the property.
<PAGE>
LANDAUER 4
REAL ESTATE COUNSELORS
The appraisal report has been made with, and is subject to, the following
specific limiting conditions.
o We have relied upon information supplied by the property manager and the
owner. Additional details including landlord's tenant finish contribution,
environmental reports, and some lease amendments were not provided.
o A legal description was provided for the appraisal; however, we have
relied upon areas cited by the Assessor of Holland Township, Ottawa
County, Michigan. The legal descriptions are included in the Addenda.
o We have used a rent roll, leases and verbal confirmation of occupancy and
tenant retention as the basis for our estimate of potential gross income.
o We have relied upon 1993, 1994 and 1995 operating expense data of the
previous owner. A 1997 budget was not provided.
o From the information provided, there appears to be about 24 different
expense recovery methods used to calculate tenant recoveries. In the
appraisal, three basic recovery methods are applied for the enclosed mall
tenants and plaza tenants. Special recovery methods as stated in the
leases were applied to the anchor and outlot tenants and some specific
mall tenants.
o It is assumed that the anchor tenants whose initial leases expire during
the analysis period, will exercise the renewal options specified within
their leases.
o Although the ownership includes vacant land parcels, these parcels are not
valued according to the instructions of the client.
<PAGE>
LANDAUER 5
REAL ESTATE COUNSELORS
o Special Limiting Conditions are also stated in various portions of the
Self-Contained Appraisal Report and are to be carefully noted in accepting
the limited restricted appraisal report.
<PAGE>
LANDAUER 6
REAL ESTATE COUNSELORS
CERTIFICATION
The undersigned certify to the best of their knowledge and belief that:
The statements of fact contained in this appraisal report and upon which the
analyses, opinions and conclusions expressed herein are based are true and
correct. This report is made subject to the Assumptions and Limiting Conditions
set forth on the following pages which set forth all of the limiting conditions
(imposed by the terms of the assignment or by the appraisers) affecting the
analyses, opinions and conclusions contained in this report.
Employment and compensation for making this appraisal are not contingent upon
the reporting of a predetermined value or direction in value that favors the
cause of the client, the attainment of a stipulated result, or the occurrence of
a subsequent event. We have no direct or indirect current or prospective
personal interest or bias in the subject matter of this appraisal report or to
the parties involved. The appraisal assignment was not based on a requested
minimum valuation, a specific valuation, or the approval of a loan.
This report has been performed in accordance with the Uniform Standards of
Professional Appraisal Practice as promulgated by the Appraisal Standards Board
of the Appraisal Foundation adopted by the Appraisal Institute, and the Code of
Professional Ethics of the Appraisal Institute. The use of this report is
subject to the requirements of the Appraisal Institute relating to review by
their duly authorized representatives. As of the date of this report, James C.
Kafes, John I. Wrzesinski and John P. Baker have completed the requirements of
the continuing education program of the Appraisal Institute. No one other than
the undersigned prepared the analyses, opinion and conclusions concerning real
estate that are set forth in this report. Kevin D. Gray inspected the property
in August 1996. John P. Baker inspected the property on January 9, 1997, and
John I. Wrzesinski inspected the property on January 21, 1997.
/s/ JCK /s/ John I. Wrzesinski
James C. Kafes, MAI, CRE John I. Wrzesinski, MAI, CRE
Executive Managing Director Senior Managing Director
Certified Michigan Appraiser License #1201002445
/s/ Kevin D. Gray /s/ John P. Baker
Kevin D. Gray, CRE John P. Baker, MAI
Managing Director Director
<PAGE>
LANDAUER 7
REAL ESTATE COUNSELORS
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
Property Identification: Westshore Mall
Holland, Michigan
Location: Northeast corner of US-31 and James Street,
Holland, Michigan.
Improvements/Site: The improvements consist of a 393,949 square foot
regional shopping center situated on a site of
approximately 51.4-acres. Located on the site is
the regional mall including four anchors, a strip
center adjacent to a Target department store, a
restaurant and bank. The ownership also includes
four vacant parcels of land totaling about 22.8
acres which are not valued as part of this
appraisal, according to the instructions of the
client.
Zoning: C-2, General Commercial District
Occupancy: 96.4 percent leased and occupied with permanent
enclosed mall tenants, excludes the anchor stores
and outlots. Including anchor stores and outlot
tenants the mall is 98.3 percent leased and
occupied.
Highest and Best Use: Present Use; Regional Mall
Interest Appraised: Leased Fee Interest, subject to the existing and
pending tenant leases and assumptions and limiting
conditions stated herein.
Date of Valuation: December 31, 1996
Date of Inspection: January 9, 1997 and January 21, 1997
Market Value Indications
Cost Approach: Not Applicable
Sales Comparison Approach: $30,000,000 to $35,000,000
Income Approach: $33,000,000
Final Value Conclusion: $33,000,000
===========
<PAGE>
LANDAUER 8
REAL ESTATE COUNSELORS
NATURE OF THE APPRAISAL
IDENTIFICATION OF THE PROPERTY AND INTEREST APPRAISED
Westshore Mall consists of 393,949 square feet of retail space situated on
approximately 51.4 acres of land at the northeast corner of US-31 and James
Street in Holland Township, Ottawa County, Michigan. The attached anchors,
Sears, JC Penney, Younkers and Steketee's are part of the ownership. Two outlot
pads and buildings are also part of the ownership, as is a strip retail center.
The property is in excellent condition with no deferred maintenance noted.
On-site asphalt surface parking is available with 2,292 spaces.
A copy of the legal description is included in the Addenda.
The property rights appraised in this report consist of the Leased Fee Estate.
Leased Fee Estate, as defined by the Appraisal Institute Dictionary of Real
Estate Appraisal, Third Edition, page 204, is:
an ownership interest held by a landlord with the rights of use and
occupancy conveyed by lease to others. The rights of lessor (the leased
fee owner) and the leased fee are specified by contract terms contained
within the lease.
PURPOSE, FUNCTION AND DATE OF APPRAISAL
The purpose of the appraisal is to estimate the Market Value of the Leased Fee
Estate as of December 31, 1996. The function of the appraisal is to assist
Morgan Stanley Mortgage Capital, Inc. with loan underwriting.
<PAGE>
LANDAUER 9
REAL ESTATE COUNSELORS
The Uniform Standards of Professional Appraisal Practice defines Market
Value as:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
- Buyer and seller are typically motivated.
- Both parties are well informed or well advised, and
acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open
market.
- Payment is made in terms of cash in U.S. dollars or in
terms of financial arrangements comparable thereto.
- The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.
SCOPE OF THE APPRAISAL
The scope of this complete appraisal involved the systematic research and
analysis necessary to reach a market value conclusion for the subject.
The initial step was to inspect the property, the general market area and the
neighborhood. After investigating the area regarding economic, political, social
and physical factors, research was conducted relevant to the valuation process,
including gathering land sales, financial information, data concerning
competitive shopping center properties and comparable improved sales, and other
information pertinent to the valuation. This information was reviewed, confirmed
and analyzed through the use of the Sales Comparison and Income Approaches to
value. These approaches are detailed in the appropriate sections of the report.
The Cost Approach is not considered to provide a meaningful value indication and
is excluded from the analysis as agreed upon by the client.
<PAGE>
LANDAUER 10
REAL ESTATE COUNSELORS
Lastly, a final value estimate was concluded based on the above analyses, which,
in turn, were influenced by the most reliable and appropriate data. This
narrative report is the result of our findings and analyses.
HISTORY OF PROPERTY
The subject property was purchased by Ivanhoe-Wilmorite Midwest, LLC. from
Westshore Mall Limited Partnership on December 31, 1996 for a reported
$30,159,000, net of closing costs. A 10.5 percent capitalization rate applied to
the first year's income was used in developing this value. Prior to its most
recent sale, the subject has been in the continuous ownership of the seller,
Westshore Mall Limited Partnership, since its construction in 1988.
<PAGE>
[GRAPHIC OMITTED]
Area Map
<PAGE>
OTTAWA COUNTY, MI
REGIONAL ECONOMIC & DEMOGRAPHIC FACT SHEET
(1990-2001)
<TABLE>
<CAPTION>
Compound Annual
1996 2001 Percent Growth
1990 (est.) (proj.) 1980-1990 1990-1996 1996-2001
---- ------ ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Population
Ottawa County, MI 187,768 214,965 235,865 1.8% 2.3% 1.9%
Grand Rapids-Muskegon-Holland, MI, MSA 937,891 1,010,591 1,063,089 1.1% 1.3% 1.0%
State of Michigan 9,295,297 9,610,928 9,802,134 0.1% 0.6% 0.4%
United States 248,708,990 265,253,151 276,918,306 1.0% 1.1% 0.9%
Households
Ottawa County, MI 62,664 75,501 80,894 2.2% 2.7% 1.9%
Grand Rapids-Muskegon-Holland, MI, MSA 333,911 368,804 389,309 1.5% 1.7% 1.1%
State of Michigan 3,419,331 3,626,743 3,713,927 0.7% 1.0% 0.5%
United States 91,947,195 100,066,882 104,497,652 1.4% 1.4% 0.9%
Avg. Household Income
Ottawa County, MI $41,938 $48,503 $58,196 6.6% 2.5% 3.7%
Grand Rapids-Muskegon-Holland, MI, MSA $37,744 $43,293 $51,744 6.2% 2.3% 3.8%
State of Michigan $38,065 $43,407 $51,764 5.6% 2.2% 3.6%
United States $38,464 $44,580 $53,841 6.6% 2.5% 3.8%
Per Capita Income
Ottawa County, MI $13,996 $16,870 $20,339 6.9% 3.2% 3.6%
Grand Rapids-Muskegon-Holland, MI, MSA $13,438 $16,001 $19,202 6.5% 3.0% 3.7%
State of Michigan $14,002 $16,494 $19,746 6.2% 2.8% 3.7%
United States $14,220 $17,043 $20,545 6.8% 3.1% 3.8%
Aggregate Income (000)
Ottawa County, MI $2,628 $3,627 $4,797 8.8% 5.5% 5.8%
Grand Rapids-Muskegon-Holland, MI, MSA $12,603 $16,171 $20,414 7.6% 4.2% 4.8%
State of Michigan $130,156 $158,527 $193,553 6.2% 3.3% 4.1%
United States $3,536,695 $4,520,610 $5,689,345 7.9% 4.2% 4.7%
Non-Agricultural Employment
Ottawa County, MI 79,868 103,264 116,084 4.0% 4.4% 2.4%
Grand Rapids-Muskegon-Holland, MI, MSA 446,717 510,980 555,175 2.9% 2.3% 1.7%
State of Michigan 3,970,179 4,284,925 4,557,404 1.4% 1.3% 1.2%
United States 109,685,073 118,346,895 129,163,244 2.0% 1.3% 1.8%
Retail Sales (000)
Ottawa County, MI $1,781,018 $2,370,129 5.9%
Grand Rapids-Muskegon-Holland, MI, MSA $9,435,839 $12,247,136 5.4%
State of Michigan $91,523,947 $110,915,868 3.9%
United States $2,355,241,609 $2,871,024,805 4.0%
</TABLE>
Source: Urban Decision Systems; Market Statistics; Data Resources, Inc.
Retail Sales data is for 1995 and 2000
Growth Rates - 1996 to 2001
[GRAPHIC OMITTED]
<PAGE>
LANDAUER 12
REAL ESTATE COUNSELORS
DEMOGRAPHIC/AREA REVIEW
POPULATION TRENDS
The Grand Rapids-Muskegon-Holland Metropolitan Statistical Area (MSA)
encompasses four counties in western Michigan: Ottawa, Allegan, Kent and
Muskegon Counties. Henceforth in this report, whenever the MSA is referenced, it
is called either the "Grand Rapids MSA" or "GR- MSA". The GR- MSA includes the
cities of Muskegon, Holland and Grand Rapids, which is Michigan's second largest
city.
As summarized in the table on the facing, the projected 1996 population for the
Grand Rapids MSA is 1,010,591, representing an increase of 73,060 persons from
1990 levels or a 1.3 percent compound annual increase. The estimated population
in 2001 is 1,063,089 persons or total increase of 52,490 persons. From 1996, the
population is estimated in increase at an annual rate of 1.0 percent. In
general, the compound annual growth rate for the GR- MSA is twice that of the
State of Michigan and comparable to the U.S. as a whole.
INCOME LEVELS
Per capita income in the Grand Rapids MSA is projected to be $16,0001,
approximately 6.1 percent lower than the national average but about the same as
the State of Michigan. However, Ottawa County's per capita income is about 5.4
percent higher than the GR- MSA. A similar trend is indicated when Average
Household Income is analyzed. The GR- MSA Average Household Income for 1996 is
about 3.1 percent lower than the national average but about the same as the
State. However, Average Household Income in Ottawa County is about 12.0 percent
higher than the GR- MSA
Since 1990, per capita income in the Grand Rapids MSA has grown at a compound
annual rate of 3.0 percent, consistent with Ottawa County, State of Michigan and
nation. This growth rate is expected to increase to 3.7 percent through 2001, an
increase consistent with state and national projections.
<PAGE>
LANDAUER 13
REAL ESTATE COUNSELORS
EMPLOYMENT
The Grand Rapids MSA has historically served as a manufacturing center where
nearly 30 percent of its workers are employed in the industrial sector. The
GR-MSA has the highest concentration of manufacturing employees in the nation.
Furthermore, the trade and services employment sectors have a substantial
presence in the area. DRI/McGraw-Hill reports that manufacturing employment grew
by about 3.9 percent per year over the last two years, but they are predicting
total manufacturing growth will slow by 0.3 percent in the near future.
Major employers in the GR-MSA are listed below:
Major Employers
Grand Rapids MSA
Major Employers Services
--------------- --------
Steelcase Furniture Manufacturing
Meijer Grocery Retail Trade
Amway Health-Care Services
General Motors Automotive Manufacturing
Butterworth Hospital Health-Care Services
D&W Food Centers Grocery Retail Trade
Miko Care Health-Care Services
Blodgett Memorial Medical Center Health-Care Services
St. Mary's Health Services Health-Care Services
Old Kent Bank and Trust Financial Services
An historical perspective of the area's unemployment rate suggests that there is
some economic stability. It is important to note that the unemployment rates for
the GR-MSA are lower than the state and nation.
Unemployment Rates
Proj.
Area 1994 1995 1996 1997
---- ---- ---- ---- ----
GR-MSA 4.5% 4.1% 4.1% 4.5%
Michigan 5.9% 5.3% 4.7% 5.0%
United States 6.1% 5.5% 5.8% 5.7%
<PAGE>
[GRAPHIC OMITTED]
Holland Vicinity Map
<PAGE>
LANDAUER 14
REAL ESTATE COUNSELORS
The table on the facing page displays the employment characteristics of Ottawa
County and the Grand Rapids MSA, in comparison to the state and nation. In the
GR- MSA, the largest percentage of jobs (1996 estimate) is in the manufacturing
sector with 29.2 percent. The services sector has 24.8 percent of the market
share of employment with the trade sector having 23.9 percent. In 1990, the
manufacturing share was 30.0 percent while the services and trade sectors had a
22.0 percent and 25.2 percent share, respectively. The trade sector lost a
substantial market share of total employment since 1990 while the services
sector posted a significant gain. The location quotient for the manufacturing
and trade sectors exceed 100 percent which shows the dominance of these sectors
in the overall economy.
The total employment growth in the GR-MSA was 14.4 percent (1990 to 1996) and
represents a 2.3 percent annual increase. As projected, total employment will
increase by 8.6 percent (1996 to 2001), an 1.7 percent annual change. By
employment sector the greatest projected between 1996 and 2001, the greatest
changes will be realized in the trade and services sectors
HOLLAND, OTTAWA COUNTY, MICHIGAN
Holland was settled in 1947 and officially incorporated in 1867. The area's
settlers were primarily Dutch immigrants, and this Dutch influence remains
today. The city of Holland is located with in Ottawa and Allegan Counties, with
only about 18 percent of its population residing in Allegan County. Holland is
located about 27 miles west of Grand Rapids, Michigan's second largest city, and
Muskegon lies 35 mile to the north. Chicago is located 146 miles away to the
west and Detroit is located 173 miles to the east. A vicinity map is found on
the following facing page.
Primary highway access to the area is by way of I-96, Business Route 196 and
US-31. Public transportation is provided by Dial-A-Ride. Kent County
International Airport is located in Grand Rapids and is served by ten airlines,
and the Muskegon County Airport is served by three airlines. Railroad passenger
service is provided for by Amtrak which offers service between Holland and
<PAGE>
OTTAWA COUNTY, MI
REGIONAL EMPLOYMENT FACT SHEET
(1980-2001)
<TABLE>
<CAPTION>
Compound Annual
% Growth
1996 2001 1980 to 1990 to 1996 to Industry Location
1990 (est.) (proj.) 1990 1996 2001 Weight (1) Quotient (2)
---- ------ ------- ---- ---- ---- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ottawa County, MI
Mining 221 133 124 9.5% -8.1% -1.4% 0.1% 26.3%
Construction 3,926 4,588 4,873 4.3% 2.6% 1.2% 4.4% 99.9%
Manufacturing 30,370 38,011 39,639 3.2% 3.8% 0.8% 36.8% 238.2%
Transportation & Utilities 2,718 2,855 3,102 3.8% 0.8% 1.7% 2.8% 53.5%
Trade 15,099 19,336 22,377 3.9% 4.2% 3.0% 18.7% 79.5%
Finance, Insurance & Real Estate 2,346 3,276 3,658 5.0% 5.7% 2.2% 3.2% 54.6%
Services 15,577 23,026 28,411 7.5% 6.7% 4.3% 22.3% 78.4%
Government 9,611 12,039 13,900 2.1% 3.8% 2.9% 11.7% 70.2%
----- ------ ------ --- --- --- ---- ----
Total Non-Agricultural Employment 79,868 103,264 116,084 4.0% 4.4% 2.4% 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------------
Grand Rapids-Muskegon-Holland, MI, MSA
Mining 977 888 833 5.0% -1.6% -1.3% 0.2% 35.4%
Construction 19,623 21,346 22,152 3.2% 1.4% 0.7% 4.2% 93.9%
Manufacturing 133,998 149,028 149,086 1.5% 1.8% 0.0% 29.2% 188.7%
Transportation & Utilities 16,488 17,569 18,280 1.1% 1.1% 0.8% 3.4% 66.5%
Trade 112,650 122,160 135,372 4.2% 1.4% 2.1% 23.9% 101.5%
Finance, Insurance & Real Estate 17,766 21,218 22,697 3.5% 3.0% 1.4% 4.2% 71.4%
Services 98,081 126,711 149,689 5.1% 4.4% 3.4% 24.8% 87.2%
Government 47,133 52,060 57,066 0.8% 1.7% 1.9% 10.2% 61.3%
------ ------ ------ --- --- --- ---- ----
Total Non-Agricultural Employment 446,717 510,980 555,175 2.9% 2.3% 1.7% 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------------
State of Michigan
Mining 9,397 7,644 7,156 -2.8% -3.4% -1.3% 0.2% 36.4%
Construction 142,525 161,758 163,754 1.9% 2.1% 0.2% 3.8% 84.9%
Manufacturing 943,721 945,989 923,264 -0.6% 0.0% -0.5% 22.1% 142.8%
Transportation & Utilities 158,390 165,994 167,790 0.4% 0.8% 0.2% 3.9% 74.9%
Trade 949,446 1,020,203 1,102,603 2.6% 1.2% 1.6% 23.8% 101.0%
Finance, Insurance & Real Estate 190,950 197,776 206,599 2.0% 0.6% 0.9% 4.6% 79.4%
Services 941,656 1,143,427 1,302,597 3.9% 3.3% 2.6% 26.7% 93.8%
Government 634,092 642,145 683,638 0.1% 0.2% 1.3% 15.0% 90.2%
------- ------- ------- --- --- --- ---- ----
Total Non-Agricultural Employment 3,970,179 4,284,925 4,557,404 1.4% 1.3% 1.2% 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------------
United States
Mining 706,935 580,297 555,131 -3.6% -3.2% -0.9% 0.5% 100.0%
Construction 4,999,505 5,265,186 5,550,150 1.5% 0.9% 1.1% 4.4% 100.0%
Manufacturing 19,114,481 18,291,693 18,206,940 -0.6% -0.7% -0.1% 15.5% 100.0%
Transportation & Utilities 5,788,409 6,121,598 6,348,340 1.2% 0.9% 0.7% 5.2% 100.0%
Trade 25,866,231 27,888,031 31,009,236 2.4% 1.3% 2.1% 23.6% 100.0%
Finance, Insurance & Real Estate 6,692,006 6,881,294 7,374,991 2.6% 0.5% 1.4% 5.8% 100.0%
Services 27,876,068 33,655,628 38,961,776 4.5% 3.2% 3.0% 28.4% 100.0%
Government 18,641,411 19,663,109 21,156,568 1.2% 0.9% 1.5% 16.6% 100.0%
---------- ---------- ---------- --- --- --- ---- -----
Total Non-Agricultural Employment 109,685,073 118,346,895 129,163,244 2.0% 1.3% 1.8% 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Change in Employment
[GRAPHIC OMITTED]
Source: Data Resources, Inc.
1) Number of jobs in this industry as a percentage of the total jobs in all
industries.
2) The industry weight for the area referenced here (either county, MSA or
state) divided by the industry weight for the nation.
<PAGE>
LANDAUER 15
REAL ESTATE COUNSELORS
Chicago. Rail freight service is provided by CSX. Holland also has access to
commercial Great Lakes shipping through the major Lake Michigan ports at
Muskegon and Grand Haven.
The projected 1996 population of the Holland area (Ottawa County) is 214,965
which is an annual increase of 2.3 percent over the 1990 population of 187,768.
The population estimate for 2001 is 235,865, an annual increase of 1.9 percent.
There are about 73,501 households which would mean there are 2.9 persons per
household in 1996. Households are estimated to increase to 80,894 in 2001, and
the average household size would be the same at 2.9 persons.
Holland has a diverse housing market with homes as large as 10,000 square feet
found on Lake Macatawa. Holland's older residential areas a located south of
downtown between Michigan Avenue and State Street. There are a number of
apartment and condominium developments in the Holland area. According the
Holland Chamber of Commerce and 1990 census data, average home prices in the
Holland area are about $74,600 slightly higher than Michigan's average home
value of $60,600. New home construction averages about $134,500. Apartment rents
are about $402 per month in Ottawa County and $305 per month in Allegan County.
The employment base of the Holland area is also diverse and includes three
primary industries which account for about 60 percent of the employment
opportunity. Office furniture manufacturing, food processing and automotive
component manufacturing are the three largest employment groups. The Haworth
Company manufactures office furniture and is Holland's largest employer with
6,000 employees worldwide and 3,500 employees located in Holland. Herman-Miller,
Inc. in Zeeland, has 6,000 worldwide employees with 2,800 in the west Michigan
area. The Prince Corporation and Donnelly Corporation both manufacture
automotive components and employ 4,500 and 1,600 persons, respectively. Food
processing companies are represented by Bil Mar Foods (1,500 employees),
Planters Lifesavers Company and Heinz, USA.
Retail development is located throughout the area with the area along US-31 near
Business Route 196 at James Street becoming the primary retail area. Found at
this location are the Westshore Mall,
<PAGE>
LANDAUER 16
REAL ESTATE COUNSELORS
Horizon Outlet Center, Target, Kohl's, Sam's Club and WalMart. Downtown Holland
is a unique shopping district with about 70 specialty stores and restaurants.
Downtown Holland has a snow melt system in four blocks of the shopping district.
Retail sales in the Ottawa County are projected to be $2,370,129,000 in 1996 up
from $1,1781,018,000 in 1990; this is an increase of 5.9 percent per year.
Employees With Over 500 Employees
Holland, Michigan
Name Product
---- -------
Herman Miller, Inc. Modular Office Systems
Haworth Co. Office Furniture
Donnelly Corp. Automotive Mirrors
Bil Mar Foods Turkey Products
Prince Corp. Auto Interior Components
Perrigo Co. Health & Beauty Products
Planters Lifesavers Confections
Hart & Cooley, Inc. Heating/Cooling Registers
S2 Yachts Boat Manufacture
Thermotron Industries Environmental Test Equipment
According to data published by the Holland Chamber of Commerce, the 1995
civilian labor force of Ottawa County totaled 113,175 persons, with 108,225
persons employed. This results in an unemployment rate of 4.4 percent. In the 12
years between 1983 and 1994, the unemployment rate of Ottawa County has declined
from 10.2 percent (1983) to 3.8 percent (1994) and averaged 6.2 percent.
Although the 1995 unemployment data indicates a slight rise in the rate from the
previous year, the rate is well below the 12-year average. Between 1993 and
1995, the unemployment rate has averaged 4.3 percent. For the time being,
employment in the area could be considered stabilized.
CONCLUSION
The Grand Rapids MSA and Ottawa County demographic and economic characteristics
suggest stability. Population and income are estimated to increase at rates that
are similar to the State of Michigan and the nation. The MSA area unemployment
level is stabilized at about 4.4 percent. The MSA has a diverse manufacturing
economy which office furniture, food processing and automobile
<PAGE>
LANDAUER 17
REAL ESTATE COUNSELORS
component manufacturing companies representing the foundation of the employment
base. Recreation and tourism are also major components of the local economy.
Retail sales have increased at a brisk annual rate of 5.9 percent in Ottawa
County and 5.4 percent in the MSA. The economic characteristic and trends of the
MSA and Ottawa County provide a favorable influence on the subject, Westshore
Mall, as a retail center and regional mall serving the Holland area.
<PAGE>
[GRAPHIC OMITTED]
Neighborhood Map
<PAGE>
LANDAUER 19
REAL ESTATE COUNSELORS
NEIGHBORHOOD ANALYSIS
The subject property is located in the north of the city of Holland in Ottawa
County, Michigan at James Street and US-31. Ottawa County as well as Allegan,
Kent and Muskegon Counties comprise the Grand Rapids-Muskegon-Holland, Michigan
Metropolitan Statistical Area (MSA). The immediate neighborhood is considered a
commercial strip on both sides of US-31, centering on James Street. The
neighborhood boundaries are Riley Street on the north, Business Route 196 on the
south, 128th Avenue on the west and 120th Avenue on the east. Extending beyond
US-31, the area is considered suburban to the west and rural to the east. A
neighborhood map on the previous page shows the general neighborhood boundaries;
also, the photographs in the front of the report show the land uses around the
subject.
US-31 is a multi-lane highway that links Muskegon, Grand Haven and Holland with
I-96. Riley, James and Lakewood Streets are east-west local streets. Eighth
Street, located south of Business Route 196, provides access to Downtown
Holland. The interchange of US-31 and Business Route 196 is located about one
mile south of the subject, and Business Route 196 connects with I-96 about
5-miles east of US-31. Also, US-31 has an interchange with I-96 south of Holland
about 6-miles from the subject.
The area is primarily developed with retail uses including the Westshore Mall,
Horizon Outlet Center, Sam's Club, WalMart, Lowes, Circuit City, Target and
Kohl's. Other retailers include Ark Van, New York Carpet World, General Food
Service, and Pier One Imports. There are numerous hotels located in the
neighborhood including Hampden Inn, Fairfield Inn, Queen's Inn and Country Inn.
Restaurants include Arby's, McDonalds, Red Lobster, Mesquite Willies, Branns and
Steak N' Shake.
There is an abundance of vacant land zoned for commercial development in the
neighborhood. Recent commercial land sales range from $46,000 to $75,000 per
acre for development sites and $275,000 to $405,000 for pad sites located along
US-31. At present, only a small amount of commercial development is being
contemplated in the area, as reported by the Holland Township Zoning official.
It
<PAGE>
LANDAUER 20
REAL ESTATE COUNSELORS
is reported that an assemblage of sites is being undertaken at the southeast
corner of Riley Street and US-31 and that a service station development might be
located on the assembled parcel. Most vacant land is located north of the
subject; however, it is noted that the mall ownership has about 21.5 acres of
commercial land and pad sites available for commercial development.
The neighborhood is a developing area, and the potential for more residential
development enhances the continued use of the subject as a regional mall. It is
unlikely that another regional mall will be developed in the neighborhood;
however, the abundance of vacant commercially zoned land suggests that other
commercial development could potentially provide competition for the Westshore
Mall tenants. The additional development of off-price retailers and discounters
such as Target, WalMart and Sam's Club and the potential for other departments
stores such as Kohl's could pose a risk to the future retail sales at the
subject.
<PAGE>
LANDAUER 21
REAL ESTATE COUNSELORS
RETAIL MARKET OVERVIEW
OVERVIEW
Westshore Mall is the Holland area's first regional mall. Other regional malls
are located in the Grand Rapids MSA including Westwood and Eastbrook in Grand
Rapids, Muskegon Mall in Muskegon and The Orchards Mall in Benton Harbor. A new
regional mall is planned for Grandville, Michigan about 20-miles east of the
subject on I-96. Also competing for customers are a number of free-standing
department and discount stores.
Department stores serving the area include Kohl's, Sears, JC Penny, Steketee's
and Younkers. Sears, JC Penney, Steketee's and Younkers are represented at the
subject and most of the other regional shopping centers. Wholesale clubs and
big-box retailers such as Target, Sam's Club and WalMart are active in the area.
TRADE AREA DELINEATION
The ability of a retail store or group of stores to attract customers from
within a specific market is limited by physical (geographic) are retail
merchandising constraints. Consideration must be given to such factors as
distance, driving times, the access convenience provided by existing and future
highway systems, distribution of the resident population within the related
region and the natural as well as man-made barriers which direct or channel the
movement of residents within the area, (such as rivers, large bodies of water,
marshlands, large public open spaces, political boundaries, and expressways or
railroads). Other factors such as merchandising profile and strength exhibited
by on-site retailers relative to competing shopping facilities may also have a
profound impact on the trade area's definition.
Typically, the majority of a mall's recurring sales are generated by residents
located within a "Primary Trade Area", while additional sales are generated by
persons residing outside of this area, either in a "Secondary Trade Area" or
outside of the region altogether. The subject property is a suburban mall,
<PAGE>
LANDAUER 22
REAL ESTATE COUNSELORS
located in an area having a relatively low population density. In a "shopper
exit interview study" performed by the previous owner and manager, about 48.6
percent of all shoppers reside in an area with Holland, Michigan zip codes. The
remaining 51.4 percent of shoppers are located in Zeeland, Grand Haven, and
other surrounding communities. Grand Rapids and Muskegon were not mentioned in
the exit survey. However, it was reported to the appraisers by the mall
management, that Holland area shoppers would travel to Woodland Mall in Grand
Rapids as an alternative to the subject primarily because of the larger size of
Woodland Mall and its large anchors.
According to the exit survey, the Westshore Mall trade area consists of the
townships of Spring Lake, Grand Haven, Allendale, West Olive, Zeeland,
Husdonville, Holland, Saugatuck, Hamilton and Fennville. In general the trade
area is linear, radiating along US-31 and Business Route 196. The distance of
the trade area boundaries vary from the subject, but most of the shoppers appear
to come from an area within 15-miles. For the analysis, we have chosen an area
contained within a 15-mile radius from the subject property.
TRADE AREA POPULATION
The table below shows the population of the subject's trade area, comparing the
1990 census data with 1996 estimates and 2001 projections. Urban Decision
Systems, Inc. (UDS) estimates the 1996 trade area population was 170,301
persons, and this is a 16.6 percent increase from 1990 census levels. Based on
the 2001 population projections, the total population is expected to increase an
additional 11.1 percent. The upward trend is a characteristic of a growing
community having and abundance of vacant land for expansion and growth.
Westshore Mall
Trade Area Population Estimates
1990 Census 1996 Est. 2001 Proj.
----------- --------- ----------
Trade Area 146,041 170,301 189,227
Grand Rapids MSA 937,891 1,010,591 1,063,089
- ----------
Source: Urban Decision Systems, Inc.
<PAGE>
LANDAUER 23
REAL ESTATE COUNSELORS
The preceding table shows population in the trade area increasing from 1996 to
2001 at a compound annual rate of 2.13 percent. This is above the 1.0 percent
compound annual growth expected for the GR- MSA.
The following table displays the number of households included in the trade area
as estimated by UDS. As with population, the total number of households in the
trade area has increased 19.3 percent from 1990 census figures, a trend expected
to continue at a slower rate (11.1 percent ) through the year 2001. Compared to
the MSA, the trade area households have increased and are projected to increase
at a faster rate.
Westshore Mall
Trade Area Household Estimates
1990 Census 1996 Est. 2001 Proj.
----------- --------- ----------
Trade Area 48,211 57,514 64,091
Grand Rapids-Holland 333,911 368,804 389,309
- ----------
Source: Urban Decision Systems, Inc.
INCOME ESTIMATES AND COMPARISONS
The income characteristics of the population of the subject property's trade
area has a direct bearing on the property's economic viability. The following
table presents a comparison of the income characteristics of the subject
property's trade area to the Grand Rapids MSA and the nation.
Westshore Mall
Average Household Income Comparison
1990 Census 1996 Est. 2001 Proj.
----------- --------- ----------
Trade Area $42,268 $48,650 $58,148
Grand Rapids MSA $37,744 $43,293 $51,744
United States $38,464 $44,680 $53,841
- ----------
Source: Urban Decision Systems, Inc.
<PAGE>
LANDAUER 24
REAL ESTATE COUNSELORS
The preceding table indicates that the average household income level for the
trade area is slightly above that of the GR- MSA and the nation. Since the 1990
census, the trade area has seen average household income increase at a compound
annual rate of 2.4 percent, in comparison to 2.3 percent for the GR- MSA and a
2.5 percent for the nation. The average household income for the trade area is
projected to be faster over the next five years, with a compound annual growth
rate of 3.6 percent projected through 2001. This is about the same for the GR-
MSA and slightly slower than the nation.
TRADE AREA EXPENDITURE POTENTIAL
The retail expenditure potential of the subject property's trade area is key to
the mall's success. Landauer estimates the retail expenditure potential of a
mall's trade area using a three step process: First, the total gross income of
the trade area is calculated by multiplying the average 1990, 1996 and 2001
household income by the number of households; Second, the total gross income is
multiplied by a disposable income factor (income remaining after taxes); and
Third, disposable income is multiplied by a GAFO factor (the percentage of
expenditures for general merchandise, apparel, furnishings and other retail
purchases--the expenditure categories most directly related to a typical
regional mall tenant mix) to estimate the amount of trade area income available
for retail purchases. The disposable income factor in Michigan was estimated to
be approximately 86.8 percent in 1990 and 86.9 percent for 1996 and 2001. GAFO
expenditures (expenditures for general merchandise, apparel, furnishings and
other retail purchases) are estimated to be 20.0 percent of disposable income.
For purposes of comparison, the expenditure calculations for the subject trade
area are illustrated below for the years 1990, 1996 and 2001.
<PAGE>
LANDAUER 25
REAL ESTATE COUNSELORS
Westshore Mall
Trade Area GAFO Expenditures
1990 1996 2001
-------- -------- --------
Total Households 48,211 57,514 64,091
Average Household Income $42,268 $48,650 $58,148
Total Income (000) $2,037,783 $2,798,056 $3,726,763
Disposability Factor 0.868 0.869 0.869
Disposable Income (000) $1,768,796 $2,431,511 $3,238,557
GAFO Factor 0.20 0.20 0.20
GAFO Expenditures (000) $353,759 $486,302 $647,711
- ----------
Source: Urban Decision Systems, Inc., Landauer Associates, Inc.
GAFO expenditures are projected to increase by 5.9 percent per year between 1996
and 2001 which is faster than the 5.5 percent annual rate from 1990 to 1996. In
our analysis, we are projecting 1997 mall sales to be $70,273,000, inclusive of
all anchors which is expected to increase to $80,269,000 by 2001, a 4.0 percent
annual growth rate. Our sales projections indicate that the Westshore Mall is
expected to capture 13.7 percent of potential trade area GAFO expenditures in
1997, declining to a 12.4 percent capture rate by 2001. Typical capture rates
for regional malls range between 7.0 and 15.0 percent of GAFO and the subject's
capture rate is within the range. Also, affecting total sales would be the
amount of sales at Steketee's which are well below the sales reported for Sears,
JC Penney and Younkers. The new owner of Westshore Mall has indicated the low
sales for this anchor represents a potential for future growth by replacing it
with a stronger anchor, should the opportunity present itself..
Growth rates for retail sales and market rents used later in this appraisal are
developed based on projected growth in trade area retail expenditures. Utilizing
the above analysis, historic and projected compound annual sales growth figures
are extracted and analyzed. Between 1990 and 1996, estimated GAFO sales grew at
a compound annual rate of 5.4 percent. Between 1996 and 2001, GAFO sales are
expected to grow at a slightly faster rate of 5.9 percent. However, as there is
potential for future competition with the development of Gandville Mall and
future commercial development in the
<PAGE>
LANDAUER 26
REAL ESTATE COUNSELORS
neighborhood, we have tempered the growth rate and have applied a general
inflation rate of 3.5 percent.
COMPETITIVE RETAIL ANALYSIS
Westshore Mall is a strong performer within its market. The center's location,
size and tenant mix all act to enhance its competitive position and is
considered superior to its competing malls. The merchandise mix of the center
appears to cater well to the population within its market. However, the subject
is a small retail mall and significant retail dollars apparently go to the power
center developments located nearby, with fashion expenditures going outside the
market area to Woodland Mall in Grand Rapids.
Retail development in the MSA has been driven by national and regional big-box
retailers. Also, discount department stores (Target, WalMart, Sam's Club and
Kohl's) are continuing to expand in the market area. In the last few years a
number of category killers have built facilities in the Grand Rapids area to
gain market share and distribution and advertising efficiencies. These stores
include Meijer's, Target, Barnes & Noble and others. Kohl's, Elder-Beerman and
Toys R Us are also entrants into the market.
There are no commercial market reports which detail market statistics for the
Holland area; however, the Holland Chamber of Commerce estimates a total retail
GLA of 2,010,000 square feet with about 520,000 square feet in the Westshore
Mall development, including the mall, Target and Kohl's. There is a factory
outlet development adjacent to the subject, south of James Street.
Several retail mall developments, including Muskegon Mall (Muskegon), Woodland
and Eastbrook Malls (Grand Rapids) and Orchard Mall (Benton Harbor) provide some
competition for the subject. Woodland Mall is considered the strongest
competitor for the subject. Future developments include a shopping center
proposed by Horizon in Fruitport which may not occur and Grandville Mall in
<PAGE>
LANDAUER 27
REAL ESTATE COUNSELORS
Grandville which is proposed to be opened in 1998 or 1999 by General Growth
Properties. Numerous department stores and the retail shops in Downtown Holland
also provide competition for the subject.
o Woodland Mall is anchored by JC Penney, Sears and Hudson's and contains
approximately 1,100,000 square feet of retail space including the anchors.
The enclosed mall area contains about 425,000 square feet, and there are
about 135 stores of which nine were vacant when the mall was inspected.
The mall does not have a dedicated food court area. First opened in 1968,
this center is owned and managed by The Taubmann Company. The mall's
appearance is dated, but sales are reported to be high because of the lack
of competition in the metropolitan area. Economic data on the mall are not
available from the owner/manager but other area brokers report mall sales
upwards from $350 per square foot and rents upwards from $35 per square
foot.
o Eastbrook Mall is located near Woodland Mall and is managed by Visser
Development, Inc. This is a single-level mall anchored by Steketee's and
non-typical regional mall anchors including Kingman's Furniture Store,
Minard's and Burlington Coat Factory. The mall first opened in 1969, and
its appearance is dated. The mall contains about 950,000 square feet with
the anchors and 375,000 square feet without the anchors. On the day of
inspection the mall had about five vacant units. This mall is not
considered to be a strong competitor for the subject as its in-line tenant
sales are reported to be about $173 per square foot with rents in the
range of $10 to $18 per square foot.
o Muskegon Mall is located in downtown Muskegon; anchored by Steketee's and
Sears, it first opened in 1976. The mall contains about 600,000 square
feet, including anchors and 460,000 square feet, excluding the anchors. Of
the 48 in-line stores at the mall, only one appeared vacant when the mall
was inspected. This mall is reported to be a poor performer with in-line
tenant sales of about $190 per square foot and rents between $8 and $16
per square foot. The mall is reported to be marketed for sale
<PAGE>
LANDAUER 28
REAL ESTATE COUNSELORS
between $12 and $14 million dollars with no potential purchasers. This
mall is not considered to be a strong competitor for the subject.
o Orchard Mall is located in Benton Harbor, and its distance from the
subject makes it a weak competitor for the subject. This mall first opened
1979 and was last renovated in 1993. The mall is anchored by
Elder-Beerman, JC Penney and Sears. With anchors, the mall contains about
530,000 square feet with in-line tenant space of about 230,000 square
feet. At the time of inspection there were 33 vacancies out of about 87
in-line tenant stores. No other data is available for the mall.
In addition to the above described mall, local retail competition is provided by
a number of department stores in the vicinity of the subject and the specialty
shops located in downtown Holland. North Park Plaza is located at the southwest
corner of US-31 and James Street. This 326,000 square foot shopping center was
built in 1994 and is anchored by Sam's Club and WalMart. Kohl's and Target also
have a presence in the market place with stores located near the subject. The
specialty shops in Downtown Holland total about 300,000 square feet and presents
a unique shopping experience for customers. Lakeshore Marketplace is located in
Norton Shores, just south of Muskegon. This 503,000 square foot center was
developed by Horizon in 1995 and is anchored by Elder-Beerman, Toys R Us, Ben
Franklin and Witmark.
Two new retail projects are planned for future development in the GR- MSA. These
projects, when built, could provide additional competition for the subject.
o Lakeshore Mall, located in Fruitport, south of Muskegon, is 710,000 square
foot retail center proposed by Horizon. No anchors have been identified,
and this development may not occur.
o Grandville Mall is located south of I-96 approximately 25 minutes drive
from the subject in Grandville, Michigan. This regional mall is planned to
contain about
<PAGE>
LANDAUER 29
REAL ESTATE COUNSELORS
1,100,000 square feet with a planned opening no earlier than 1998. Anchors
competitive with the subject and Woodland Mall are anticipated. Holland
area customers that patronize Woodland Mall will likely be diverted to
Grandville Mall. Although the Westshore Mall would be somewhat negatively
affected by Grandville Mall, primarily because of its larger size and
greater number of potential stores, the development of the mall would
impact Woodland Mall to a greater degree because of its ease of access to
customers living on the west side of Grand Rapids.
With the exception of Grandville Mall and Lakeshore Marketplace, we have no
knowledge of any new retail center additions which are currently planned for
this market area. However, the abundance of zoned commercial land in the
neighborhood of the subject presents an opportunity for a large amount of
commercial development if market economics warrant.
<PAGE>
[GRAPHIC OMITTED]
Westshore Mall Site Plan
<PAGE>
LANDAUER 30
REAL ESTATE COUNSELORS
PROPERTY DESCRIPTION
SITE ANALYSIS
The subject site is located at the northeast corner of US-31 and James Street in
Holland Township, Ottawa County, Michigan. The site is bounded by James Street
on the south, US-31 on the west and Felch Street on the north. On the east, the
subject adjoins an Ottawa County office building. All the usual public utilities
are available to the site. A site plan with the Westshore Mall, anchors, outlots
and plaza strip center are outlined. No soils tests were available for our
review, and we assume that no adverse soil conditions exist. The area contained
in the ownership is summarized below with the data in bold representing the
developed sites.
Shopping Center Site
Parcel Size (Acres)
------ ------------
Developed Sites
Mall and Anchors 40.87
Plaza 5.92
Outlots 4.63
----
Total Developed 51.42
Undeveloped Sites
Outlot 1.31
Outlot 5.24
Retention Pond 9.98
East of Kohl's 6.00
----
Total Vacant 22.53
-----
Total Center 73.95
=====
The site is irregular in shape but generally at grade with its fronting streets,
US-31 and James Street. According to the Holland Township Engineering
Department, the subject property is identified on Flood Insurance Rate Map
(FIRM) 260492-0003D (Panel 3 of 7) dated September 28, 1990. The subject is
included in Zone X (Unshaded) which is the area outside of the 500-year flood
plain.
<PAGE>
LANDAUER 31
REAL ESTATE COUNSELORS
ACCESS AND VISIBILITY
Visibility to the site is good from both US-31 and James Street. Access is
available directly from James Street but indirectly from US-31 at Felch Street.
Signal lights permitting full turning movements area located at the subject on
James Street and at US-31 and Felch Street. US-31 is a major thoroughfare
connecting Holland with Muskegon.
ZONING
The subject property is zoned C-2, General Commercial Business, by Holland
Township. This zoning classification allows a variety of commercial and office
uses, including retail. It appears that the subject improvements are in
conformance with the zoning ordinance. A copy of the zoning ordinance is
retained in our files.
REAL ESTATE TAXES
The subject falls within the tax jurisdiction of the Holland Township, Ottawa
County, Michigan. Real estate taxes in the State of Michigan are assessed at
50.0 percent of the property's estimated True Cash Value.. Real estate taxes are
paid on a calendar year system and are due and payable in July and December of
each year. The 1997 Assessments and Tax Rates were not yet available as of the
effective date of this analysis.
Effective May 1, 1994, Michigan voters passed Proposition A, which shifted part
of the burden of funding education from local property taxes to the state sales
tax. The subject property's real estate taxes for year end 1995 reportedly take
into account any changes in the tax structure created by this legislation. It is
imperative to note that with the passage of Proposition A came a mandatory cap
on tax increases, the equivalent of which may not exceed the lower of 5.0
percent or the previous year's rate of inflation for the state of Michigan.
According to Township officials, the 1996 rate of inflation for the state of
Michigan was 2.6 percent. Therefore, unless a municipality's overall Tax Rate is
changed,
<PAGE>
WESTSHORE MALL ASSESSMENTS AND TAXES
<TABLE>
<CAPTION>
Preliminary
Year 1994 1995 1996 1997
Tax Parcel Number Millage Rate 42.9602 43.1602 42.918 42.918
===============================================================================================
<S> <C> <C> <C> <C> <C>
Plaza (Strip Center) True Cash Value $ 1,564,600 $ 1,676,600 $ 1,863,000 $ 1,866,400
70- 16- 16- 400- 048 Assessed Value $ 782,300 $ 838,300 $ 931,500 $ 933,200
Taxable Value $ 782,300 $ 838,300 $ 861,772 $ 885,901
Real Estate Tax $ 33,608 $ 36,181 $ 36,986 $ 38,021
First Am. Bank True Cash Value $ 719,600 $ 746,400 $ 870,000 $ 863,000
70- 16- 16- 400- 053 Assessed Value $ 359,800 $ 373,200 $ 435,000 $ 431,500
Taxable Value $ 359,800 $ 369,154 $ 379,490 $ 390,115
Real Estate Tax $ 15,457 $ 15,933 $ 16,287 $ 16,743
Jose Babushka True Cash Value $ 1,249,600 $ 1,276,200 $ 1,552,200 $ 1,558,000
70- 16- 16- 400- 060 Assessed Value $ 624,800 $ 638,100 $ 776,100 $ 779,000
Taxable Value $ 624,800 $ 638,100 $ 655,966 $ 674,333
Real Estate Tax $ 26,842 $ 27,541 $ 28,153 $ 28,941
Westshore Mall True Cash Value $22,539,800 $23,318,200 $26,611,600 $26,717,200
70- 16- 16- 400- 065 Assessed Value $11,269,900 $11,659,100 $13,305,800 $13,358,600
Taxable Value $11,269,900 $11,562,917 $11,886,670 $12,219,500
Real Estate Tax $ 484,157 $ 499,058 $ 510,152 $ 524,437
Mall Totals True Cash Value $26,073,600 $27,017,400 $30,896,800 $31,004,600
All parcel numbers Assessed Value $13,036,800 $13,508,700 $15,448,400 $15,502,300
Taxable Value $13,036,800 $13,408,471 $13,783,898 $14,169,849
Real Estate Tax $ 560,064 $ 578,712 $ 591,577 $ 608,142
</TABLE>
<PAGE>
LANDAUER 32
REAL ESTATE COUNSELORS
1997 real estate taxes for a specific property can not exceed a 2.6 percent
increase over 1996 levels. Capped tax increases do not apply however, if a
property transfers ownership, or if additional site or building improvements are
incorporated. As the subject sold in December 1996, it is likely the tax cap
will be removed.
The subject property is currently divided into five separate tax parcels as
identified in the chart on the facing page. We note that the Assessor's true
cash value is about $31,000,000 compared to the sale price of $30,159,000 which
is net of sales costs and the value indication of $33,000,000. As the true cash
value is near the reported sale price, it is likely that the taxable value for
the subject property will be reestablished with the property reassessed in 1998.
Because of the sale and removal of the tax cap, the taxes for the subject could
increase by about 10.0 percent provided that the millage rate remains the same
as in 1996. As it is unknown what the assessor will do when the sale is
reported, we have elected to not increase the taxes because of the sale of the
subject property, and have applied the 1997 preliminary tax amount of $608,142.
As applied in the analysis, the real estate taxes are projected to increase at
an annual rate of 3.5 percent per year.
IMPROVEMENTS
Westshore Mall is a single-level, masonry and steel, regional shopping center
containing a total of 393,949 square feet including enclosed mall, four anchor
stores, two outlots and a strip center (Plaza). The subject property consists of
143,034 square feet of in-line stores in the enclosed mall. The center's square
footage is distributed as follows:
<PAGE>
[GRAPHIC OMITTED]
Westshore Mall Single Level
<PAGE>
LANDAUER 33
REAL ESTATE COUNSELORS
Westshore Mall
Area Delineations
(square feet)
Enclosed Mall Stores 143,034
Sears 52,515
Younkers 69,148
Steketee's 40,755
JC Penney 51,399
------
Anchor Total 213,817
First of America 2.236
Jose Babushka 8,775
-----
Total Outlots 11,011
Plaza Center 26,087
------
Mall Total 393,949
=======
Westshore Mall was available for occupancy in late 1988, and most leases reflect
a 1988 or 1989 start date. The total mall occupancy (all tenants) is currently
98.3 percent. All of the vacancy is located in the enclosed mall which has three
vacant units and one leased to a temporary tenant. The vacant units are
highlighted in the plan on the facing page. For calculating the occupancy, we
have included the temporarily occupied unit as a vacant unit. The enclosed mall
area is presently about 96.4 percent occupied.
The following is a brief description of the physical components of the subject
property.
Foundations: Spread reinforced concrete footings.
Exterior Walls: Brown brick over concrete block.
Roof: Single ply membrane over R-13 rigid insulation. The
membrane is covered with a rock ballast.
Ceilings: Sheet rock and dropped ceilings with skylights the mall.
Floor: Ceramic floor tile on the mall corridor.
<PAGE>
LANDAUER 34
REAL ESTATE COUNSELORS
Lighting: Metal halide down lights with skylights in the mall
corridor. Because of the large number of skylights,
natural light is abundant in the mall.
HVAC System: All mall tenants are heated by individual
packaged units located on the roof. The mall has
packaged units located on the roof. Anchor tenants have
separate HVAC systems.
Fire Protection: The shopping center is fully sprinklered with
a wet system.
Condition: Based on our inspection, the property is considered to
be in excellent condition with no deferred maintenance
noted. The center is of average-quality construction
with an appealing single-level design. Circulation and
parking are adequate and appropriate for a multi-tenant
shopping center. Sears contains an automotive center,
and it is reported that Sears disposes used oil in an
above ground container before recycling. It is reported
that their are no detrimental environmental issues
associated with Westshore Mall.
<PAGE>
LANDAUER 35
REAL ESTATE COUNSELORS
HIGHEST AND BEST USE
Highest and best use is defined in The Appraisal of Real Estate, 10th Edition,
as: The reasonably, probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported, financially
feasible and that results in the highest value.
Inherent in this definition is the separation of land and improvements. That is,
the highest and best use for the land, as if vacant and available, could be
different from the highest and best use of the improved property. All criteria
must be met separately for both land and improvements.
AS IF VACANT
The subject property is located on a well-traveled highway. The best potential
use would be one that benefits from the site's exposure and accessibility. The
existing terrain is suitable for almost any type of commercial development. The
property is zoned for commercial development and has been approved as a regional
shopping center site by Holland Township. Surrounding land uses include
residential, commercial and office developments with commercial use as the
dominant use. Considering these factors, the highest and best use of the site,
if vacant, would be for a regional shopping center.
AS IMPROVED
The appraised property is improved with a regional shopping center. The design
and layout of the center are suitable for typical tenant needs. Having analyzed
competing retail centers, as well as the property's location, design, and
condition, we conclude that the present use represents the highest and best use
of the site, as improved.
<PAGE>
LANDAUER 36
REAL ESTATE COUNSELORS
VALUATION METHODOLOGY
All three approaches to value--the Cost Approach, Sales Comparison Approach, and
Income Approach--were considered in the valuation of the Leased Fee Estate in
the subject property.
The Cost Approach is based upon the theory of substitution, which implies that a
prudent investor will not pay more to purchase a property than it would cost to
create a comparable substitute property. The value of the underlying land as if
vacant and available for development is first estimated. To this is added the
estimated cost of reproducing or replacing the subject property, minus the
estimated amount of any depreciation (physical and functional) and obsolescence
(economic). The Cost Approach is not used in this appraisal are agreed to by the
client.
The Sales Comparison Approach involves a direct comparison of the subject
property with similar properties that have sold, in order to derive an estimate
of market value. It is also based on the theory of substitution, and implies
that a prudent investor would not pay more to buy the subject property than he
would to buy an equally desirable substitute property. Because of wide
differences in age, condition, tenancy, location, and (most importantly)
anticipated net income, this analysis often provides only broad indications of
general valuation parameters, such as price per square foot of gross building or
rentable area, and overall capitalization rates.
The Income Approach is usually relied upon as the primary indicator of value
when analyzing income-producing properties. Either through the direct
capitalization of net income or the discounting of projected cash flows into a
present worth indication, the analyst has reliable tools with which to formulate
an estimate of market value. Essential to this approach is an awareness of
market rents, operating costs, current investor yield requirements, and the
relative risks associated with varying types of investment instruments.
Based on the methodologies of the three approaches to value, we have conducted
our analysis of the subject property. Our assumptions and conclusions for each
approach are presented in the following sections of the report.
<PAGE>
LANDAUER 37
REAL ESTATE COUNSELORS
COST APPROACH
The Cost Approach to value has not been used in this report for two specific
reasons: Lack of truly comparable construction cost data; and the
inappropriateness of the valuation technique. Current land value and
construction cost estimates may be higher or lower than those estimated in the
last nine years since the mall was built; as a result, the lack of recent
construction data prevents us from quantifying the changes in replacement costs.
The lack of comparable regional mall development activity also precludes us from
making a reliable estimate of developer's profit. What was once achievable in
the market may not be achievable today, and without an active market, the
estimation of an appropriate profit margin becomes even more subjective.
Income producing properties like the subject property do not lend themselves to
reliable estimates of value by the Cost Approach. The purpose of this appraisal
is to estimate the market value of the leased fee interest in the subject
property. Because of the potential impact of above or below market leases,
specific anchor tenant operating agreements, ground leases, and other unique
lease requirements oftentimes found in shopping centers, the Cost Approach
cannot accurately measure the effect of such factors. In addition, the Cost
Approach does not reflect the motivations inherent in purchasing
income-producing properties. Shopping centers in many instances require
intensive leasing, management and operational skills in order to maximize their
performance. The above relationships are economic in nature, and in our opinion
are best measured by proper application of the Income Approach to value. As a
result of this, we have not undertaken an analysis of the property by the Cost
Approach as previously agreed to by the client and Landauer.
<PAGE>
LANDAUER 38
REAL ESTATE COUNSELORS
SALES COMPARISON APPROACH
The Sales Comparison Approach to value is a technique by which market value is
estimated by direct comparison of the subject property with current offerings
and/or actual sales transactions of like or similar properties that occurred
recently. The process is one of analyzing the listing or sale and correlating
the characteristics of the property involved and the known details of the
transaction so that such data can then be adjusted relative to the subject
property. Consideration is given to a variety of valuation factors, including:
1) The degree of comparability of each property with the subject property;
2) The date of the sale in relation to the date of the current appraisal,
taking into account market changes during the interim;
3) Reliability of the sales data; and
4) Appropriate adjustments for unusual conditions, if any, affecting price or
terms of the sale.
To apply the Sales Comparison Approach, an appraiser considers data on sales,
contracts, offers, refusals, and listings of properties considered comparable to
the subject property. First, the appraiser thoroughly researches the prices,
real property rights conveyed, financing terms, motivations of buyers and
sellers, and transaction dates of the sale properties. Then details on each
property's location, physical and functional condition, and income producing
characteristics must be examined.
ELEMENTS OF COMPARISON
These are the characteristics of properties and transactions that cause the
prices paid for real estate to vary. The appraiser considers and compares all
differences between the comparable properties and the subject property that
could affect value. Adjustments for dissimilarities are made to the price of
each comparable property to make the comparable equal to the subject on the date
of the appraisal.
<PAGE>
LANDAUER 39
REAL ESTATE COUNSELORS
There are several common elements of comparison that should always be considered
in a sales comparison analysis. Each is described as follows:
Real Property Rights Conveyed: A transaction price is always predicated upon the
real property interest conveyed. Many types of real estate, particularly income
producing property, are sold subject to existing leases. The revenue generating
potential of a property is often fixed or limited by the terms of existing
leases. In the valuation process, adjustments must be made to any limitations
which may inhibit the property's ability to generate a level of net operating
income constrained only by market events.
Financing Terms: The transaction price of one property may differ from that of
an identical property due to different financing arrangements. Estimates of
market value are generally based upon an all cash basis or subject to financing
terms typically available in the market. Calculations for atypical financing
vary depending upon the type of financing arrangement and the market perceptions
of the added value. These adjustments are commonly referred to as "cash
equivalency".
Conditions of Sale: These adjustments usually reflect the motivations of the
buyer and the seller. When non-market conditions of sales are detected in a
transaction, e.g. distressed sale, related parties or foreclosure, the sale can
be used as a comparable only after extensive investigation. The motivations of
the sale must be thoroughly researched before an adjustment is made.
Date of Sale: Market conditions generally change over time, but the date of an
appraisal is a specific time. Therefore, past sales must be examined in light of
the direction of change between the sale date of the comparable and the
valuation date of the subject property. This adjustment reflects change in value
and is often called a "time adjustment".
Location An adjustment may be required when the locational characteristics of a
comparable property are different from those of the subject property.
Adjustments for location are usually
<PAGE>
LANDAUER 40
REAL ESTATE COUNSELORS
expressed as percentages that reflect the increase or decrease in value
attributable to the property's location or neighborhood.
Physical Characteristics: If the physical characteristics of a comparable
property and the subject property differ in any way, each of these
dissimilarities may require comparison and adjustment to equal the attributes of
the subject. Physical divergences may include magnitude of improvement, quality
of construction, age/condition, functional utility, site size and amenities.
Income Characteristics: Factors that affect the income a property can generate
include the quality of management and resulting efficiencies of operations, as
well as demand, property condition, average rental rates and growth rates.
APPLICABILITY OF ADJUSTMENTS
In practice, when considering the purchase of a regional mall, buyers tend to
relate one mall to another in income-oriented terminology, i.e., discount rates,
capitalization rates. The rating process would include judgments of a center's
location, market potential, development or expansion potential, and competitive
advantage. This information would form the conclusions relating to capitalizing
net income or discounting cash flows.
Very little emphasis is given to the usual comparison factors utilized in the
Sales Comparison Approach such as price per square foot or gross income
multiplier. The presence or absence of owned anchor stores, ground leases or
other factors tend to result in a desperate price per square foot comparison,
while gross income characteristics can vary widely depending on escalation
practices, real estate tax levels, etc. The foregoing factors make it very
difficult to adjust the traditional comparison factors from one mall to another.
<PAGE>
REGIONAL MALL SALES
<TABLE>
<CAPTION>
Sale Price/ Owned
Sale Property Year Date SF Mortgage Interest GLA Occ'
No. Location Built of Sale Sold Amount Purchased $/SF of At Sale
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
1 Westshore Mall 1988 Dec-96 393,949 $30,159,000 100.0% $77 98.00%
Holland, MI N/A Leased Fee
$30,800,000 $78.18
Adjusted for
Cost of Sales
2 Three Michigan Malls Dec-96 N/A $134,000,000 100.0% N/A N/A
Lansing Mall, Lansing, MI N/A Leased Fee
Westwood Mall, Jackson, MI
Lakeview Mall, Battle Creek, MI
3 Confidential 1974 Nov-96 400,800 $43,686,000 100.0% $274 94.00%
Illinois 1992 $32,100,000 Fee Simple
4 Confidential 1971 Nov-96 550,000 $44,000,000 100.0% $80 90.00%
Tennessee 1992 N/A Fee Simple
5 Valley View Center 1975 Oct-96 467,200 $85,500,000 100.0% $183 85.00%
Dallas, TX 1993 N/A Leased Fee
1996
6 Paseo Nuevo 1990 Jun-96 158,120 $37,000,000 100.0% $234 88.00%
Santa Barbara, CA N/A Leasehold
7 Charlestowne Mall 1991 Apr-96 744,901 $85,000,000 87.7% $114 79.00%
St. Charles, IL 1993 N/A Partnership
1995 Interest
<CAPTION>
1st
Year Final Sale/
Sale Property OAR Year Mall Sales Price
No. Location COC OAR IRR Per SF Ratio
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
1 Westshore Mall 10.50% - - - - - - $178 0.43
Holland, MI - - -
10.28% $178 0.44
2 Three Michigan Malls 10.00% - - - - - - - - - - - -
Lansing Mall, Lansing, MI - - -
Westwood Mall, Jackson, MI
Lakeview Mall, Battle Creek, MI
3 Confidential 8.90% 8.90% - - - $330 0.83
Illinois - - - 1996
Projected
4 Confidential 9.90% 9.90% - - - $245 0.33
Tennessee - - -
5 Valley View Center 9.00% 9.00% - - - $228 0.80
Dallas, TX - - -
6 Paseo Nuevo 10.30% - - - - - - $340 0.69
Santa Barbara, CA - - -
7 Charlestowne Mall 9.56% - - - 12.00% $202 0.56
St. Charles, IL - - -
<CAPTION>
Sale Property
No. Location Remarks
- -----------------------------------------------------------------------------------------------------------
<C> <S> <C>
1 Westshore Mall The buyer purchased a second mall from the seller, but
Holland, MI both malls were priced separately. No details are avialable
on the other mall. The sale included four anchors: Sears,
JC Penney, Younkers and Steketee's. Steketee's sales
are lagging and the buyer anticipated a significant upside
potential with an anchor replacement if the opportunity
presents itself. The mall includes about 22.0 acres of
additional development land and pad, but no value was
allocated to the this land in the sale price cited. The retail
sales cited are the 1997 estimate for the entire mall.
Enclosed mall sales are estimated to be $210/sf in 1997.
2 Three Michigan Malls Three malls were purchased as a package. The buyer
Lansing Mall, Lansing, MI indicated the first year income was capitalized at the cited
Westwood Mall, Jackson, MI rate. Anchors were included at the Lansing Mall (2) and
Lakeview Mall, Battle Creek, MI Westwood Mall (1). Only retail shops were purchased with
the Lakeview Mall. The price shown is the aggregate
amount which includes $40 million in operating partnership
units in General Growth, $4 million in cash and assumed
debt of $90 million carryiing an interest rate of 9.7% with
3-23 years remaining on the notes.
3 Confidential Solid performer with strong anchors and virtually no
Illinois competition. Tertiary market location. Purchase included
mall area. Mall sales in 1995 were $317/sf. Seller's analysis.
4 Confidential Average center in a tertiary location with two strong
Tennessee performing anchors. Seller's analysis.
5 Valley View Center NOI is projected for 1996 as shown. The 1995 NOI was
Dallas, TX $7.7 million which would result in a 9.0 percent OAR. The
mall shops were 85 percent occupied and the buyer
anticipated a significant upside potential in increasing
the occupancy. J.C. Penney is a new lease in the mall in
a space that was vacant for an extended period.
Buyer's analysis.
6 Paseo Nuevo Unenclosed center of quality. Sale did not include the
Santa Barbara, CA department stores. High first year return is reflective of
the leasehold interest being purchased (with stipulated
ground rent payments reportedly limiting the buyer's
upside potential) and a few small environment and
engineering issues. Buyer's Analysis.
7 Charlestowne Mall Sale included the mall area and four anchors (Carson Pirie
St. Charles, IL Scott, JC Penney, Sears and Regal Cinema). A pending
lease with Regal Cinema is not reflected in the NOI.
</TABLE>
<PAGE>
LANDAUER 41
REAL ESTATE COUNSELORS
ANALYSIS AND INTERPRETATION OF DATA
A summary of the comparable sales can be found on the facing page. Sales 1 and 2
represent current sales in Michigan. All of the sales occurred between April
1996 and December 1996, and the sale prices range from $78 to $274 per square
foot, with first year capitalization rates of 8.9 to 10.5 percent. Details on
the transactions are included in the remarks column of the table.
Typically, the unit value of a sale is significantly affected by the inclusion
of anchor tenants; thus, a comparison among properties is most meaningful when
there is a match among the property components included in the transfer. Other
important price variables include differences in age, condition, quality, the
interest transferred, and the extent to which the properties are leased at
market rentals, as well as the impact of income from other sources not being
accounted for within the expression of a mall gross leasable area measure.
The sale of the subject is identified as Sale No. 1. The most comparable
property in terms of age is Sale No. 6, which indicates a price of $234 per
square foot; however, the sale did not include the department stores. The
property most similar to the subject in terms of sales per square foot of GLA
and sales-to-price ratio is Sale No. 4, which had retail sales of $80 per square
foot, indicating a ratio of retail sales to price of 0.33. Confounding this
traditional analysis is the fact that the subject property includes four anchor
stores which serves to reduce the sales per square foot comparison. Only Sale
Nos. 1 (the subject) and 7 included four anchors in the sale.
Sale No. 1 is the sale of the subject property which occurred in December 1996.
The seller transferred ownership of the subject and another mall, but they were
both separately priced. No information on the other mall could be obtained from
the buyer. The sale of the subject included all of the enclosed mall GLA, four
anchors (Sears, JC Penney, Younkers and Steketee's), two outlots, and a strip
center adjacent to a Target department store. The total GLA purchased was
393,949 square feet. The transaction also included about 22.8 acres of
development land and pad site which did not contribute any value to the final
transaction. The mall was never on the open market for sale and was negotiated
<PAGE>
LANDAUER 42
REAL ESTATE COUNSELORS
directly between the buyer and seller. The contract sale price was reported by
the purchaser to be $30,159,000 which is net of costs related to the sale such
as sales commissions, appraisal fees, environmental studies and other "due
diligence" costs. The buyer reported that the capitalization rate based on the
contract sales price was 10.5 percent. Sales commissions of 2.0 percent would
adjust the price to $30,800,000 or $78.18 per square foot and would, therefore,
lower the capitalization rate to about 10.28 percent. Using estimated 1997
retail sales, the retail sales to sale price ratio would be 0.43 based on the
contract price and would be 0.44 based on the adjusted price. Anchor sales per
square foot were reported to be healthy for Sears ($246), Younkers ($143), and
JC Penney ($175); however, the sales at Steketee's have been declining for the
last few years and were reported to be $82 per square foot in 1996. The
purchaser viewed an upside to the poor performance of this anchor, and believes
that it could place a stronger tenant in the Steketee's space if the opportunity
presented itself. At the time of sale, the mall was 98.3 percent occupied. It is
our opinion that the buyer received a good deal on the purchase of Westshore
Mall, and may have placed a greater risk to Steketee's vacating the building.
Also, the buyer indicated that capitalizing the in-place income was the primary
investment application when determining a fair price. It is our opinion that if
the mall was placed on the open market with typical sales costs paid and was not
part of a packaged sale, the sale price would have been higher. Therefore, it is
our opinion that the sale price is understated.
In general, the subject is a good-quality center in an area which is relatively
insulated from new competition in the near term. In our opinion, the price per
square foot applicable to the subject is in the upper end of the range, between
$80 and $90 per square foot. Similarly, the ratio of sale price to sales
applicable to the property is between 0.4 and 0.5 because of the inclusion of
the four anchors in the ownership. These result in the following value ranges.
393,949 square feet x $80 = $31,500,000
393,949 square feet x $90 = $35,500,000
and
1997 sales of $178 psf x 0.4 x 393,949 = $28,000,000
1997 sales of $178 psf x 0.5 x 393,949 = $35,100,000
In conclusion, the value indications at the upper end of the range are most
applicable to the subject. The value range indicated by the Sales Comparison
Approach is: $30,000,000 to $35,000,000.
<PAGE>
LANDAUER 43
REAL ESTATE COUNSELORS
INCOME APPROACH
Income property exists for the production of income. It is only natural that the
value of an income producing property should be a function of earning power.
This is the essence of the Income Approach to Value and all related theory and
techniques. This is not to say that the production of income is necessarily the
sole reason for such a property's existence, nor is it meant to suggest that
factors not related to earning power cannot influence value. There is no
question, however, that the expectation of monetary gain is the major
consideration in the valuation of income properties. Indeed, the anticipation of
future benefits, either amenities or dollars, is the very basis of the value of
any kind of property.
The theory of the Income Approach is based on the present worth of the net
income, cash flow, and reversionary value in the property it will produce during
the remainder of its productive life over a reasonable holding (ownership)
period. The Income Approach, therefore, is a process of measuring or estimating
the extent of future benefits which might reasonably be expected and translating
these benefits into a present value at a particular point in time.
DISCOUNTED CASH FLOW ANALYSIS ("DCF") ASSUMPTIONS
We have utilized a computer-generated (Pro-Ject) discounted cash flow analysis
program to estimate the future financial performance of the subject property.
The assumptions employed to structure the pro forma cash flow and determine
future income and expense estimates in addition to capital items are summarized
below. The model also allows for the entry of basic assumptions concerning
future lease revenues and expenses.
LEASING SUMMARY
The subject property has 59 enclosed mall retail tenants, 4 kiosk tenants, 4
anchors and 7 tenants located in the strip center (Plaza) adjacent to the Target
department store. Additionally, two outlot tenants (First of America Bank and
Jose Babushka) have ground leases. Four of the enclosed mall
<PAGE>
LANDAUER 44
REAL ESTATE COUNSELORS
enclosed mall, Kiosk, anchors, Plaza and outlot tenants. As the vacant units are
in the enclosed mall portion of the subject, the occupancy of the enclosed mall
tenants is 96.4 percent. Over the ten year holding period, the average occupancy
of the enclosed mall tenants is 97.8 percent. Below follows a brief summary of
the more pertinent details of the anchor leases, outlot leases and a general
description of the enclosed mall and plaza leases.
ANCHOR LEASES
Sears:
Sears contains 52,515 square feet and has a 15 year lease that commenced in
August 1988 and will terminate in August 2003. The rental rate for the initial
term was $156,744 per year or about $3.00 per square foot. In each year of the
lease, Sears is to pay percentage rent of 1.5 percent of sales between
$5,000,000 and $9,000,000 and 1.0 percent of sales exceeding $9,000,000. Sears
pays its pro rata share of real estate tax and insurance expenses over a base
year 1988 amount which was estimated by the appraisers as $1.42 per square foot.
However, 50 percent of the tenants expenses are recaptured in the percentage
rent payment. As projected for 1997, retail sales total about $13,070,000 which
results in overage rent of about $100,700, and expense recoveries are projected
to be $3,710. The total amount of Sears base rent, percentage rent and
recoveries is projected to be $261,955 or about $4.99 per square foot in 1997.
The tenant's occupancy costs is about 2.0 percent.
Sears has five, 5-year renewal options at the same terms and conditions as the
initial lease. As retail sales are about $249 per square foot in 1997 and the
tenant is paying percentage rent which is nearly equal to its base rent, there
is a strong probability that the tenant will renew its lease in September 2003.
In this analysis, we have projected that Sears will renew its lease; however, we
have given a $5.00 per square foot tenant finish contribution from the landlord
as an additional incentive for the tenant to renew. It is recalled that the
Grandville Mall will likely be opened just prior to the lease expiring, and this
potential competition for the anchor might require additional incentives from
the landlord.
<PAGE>
LANDAUER 45
REAL ESTATE COUNSELORS
Younker's:
Younker's contains 69,148 square feet and has a 15 year lease that commenced in
August 1988 and will terminate in August 2003. The rental rate for the initial
term was $224,808 per year or about $3.25 per square foot. In each year of the
lease, Younker's is to pay percentage rent of 2.5 percent of sales between
$7,500,000 and $9,499,000; 2.0 percent between $9,500,000 and $11,499,000; 1.5
percent between $11,500,000 and $13,499,000. Younker's pays its pro rata share
of real estate tax and insurance expenses. Enclosed mall and CAM expenses are
fixed at $0.30 per square foot for the first 5-years which increases by $0.05
per square foot every five years, including the option periods. As projected for
1997, retail sales total about $10,773,000 which results in overage rent of
about $75,465, and expense recoveries are projected to be $115,660. The total
amount of Younker's base rent, percentage rent and recoveries is projected to be
$415,932 or about $6.02 per square foot in 1997.
The tenant's occupancy cost is about 3.9 percent.
Younker's has four, 5-year renewal options at the same terms and conditions as
the initial lease. As retail sales are about $155 per square foot in 1997 and
the tenant is paying percentage rent equal about one-third of its base rent,
there is a strong probability that the tenant will renew its lease in September
2003. In this analysis, we have projected that Younker's will renew its lease;
however, we have given a $5.00 per square foot tenant finish contribution from
the landlord as an additional incentive for the tenant to renew.
Steketee's:
Steketee's contains 40,755 square feet and has a 15 year lease that commenced in
December 1988 but was amended in December 1993. The lease will terminate in July
2003. The rental rate for the initial term was $171,018 per year or about $4.20
per square foot as cited in a supplemental agreement to the
<PAGE>
LANDAUER 46
REAL ESTATE COUNSELORS
lease. In each year of the lease, Steketee's is to pay percentage rent of 3.0
percent of sales over $6,273,000. Steketee's pays a fixed amount ($1.00 per
square foot) CAM expenses and its pro-rata share of real estate taxes. As
projected for 1997, retail sales total about $3,273,361 ($80.32 per square foot)
which is below the sales breakpoint and no overage rent is paid. Expense
recoveries are projected to be $101,506. The total amount of Steketee's base
rent and recoveries is projected to be $272,677 or about $6.69 per square foot.
The tenant's occupancy cost is about 8.3 percent.
Steketee's has a renewal option for one or more terms at the same terms and
conditions as the initial lease, but not to exceed a total of 25 years. Although
the tenant's retail sales are low, about $80.32 per square foot in 1997, the
base rental at $4.20 per square foot is comparable to the other anchor tenants
sum of base and overage rent. Overall, the tenant's cost of occupancy is high
compared to the other anchors, which presents a risk that the tenant will not
renew its lease when it expires. Nevertheless, as the tenant continues to pay
its rent and expense recoveries, we have continued the tenant at Westshore Mall.
The new owner of the mall perceives an opportunity by replacing Steketee's with
a stronger tenant if the opportunity presents itself. In this analysis, we have
projected that Steketee's will renew its lease; however, we have given a $5.00
per square foot tenant finish contribution from the landlord as an additional
incentive for the tenant to renew.
JC Penney:
JC Penney contains 51,399 square feet and has a 15 year lease that commenced in
August 1988 and will terminate in August 2003. The rental rate for the initial
term was $188,370 per year or about $3.70 per square foot. In each year of the
lease, JC Penney is to pay percentage rent of 1.5 percent of sales over a
breakpoint of $9,418,500. Sears pays its pro rata share of real estate tax and
insurance expenses over a base year 1988 amount which was estimated by the
appraisers as $1.42 per square foot. Enclosed mall and CAM expenses are fixed at
$0.40 per square foot for the first 10-years which increases by $0.05 per square
foot for the last five years, including the option periods. As projected for
1997, retail sales total about $8,911,000 which results in no overage rent.
Expense recoveries are
<PAGE>
LANDAUER 47
REAL ESTATE COUNSELORS
projected to be $18,434. The total amount of JC Penney base rent and recoveries
is projected to be $208,574 or about $4.06 per square foot, and its occupancy
cost is about 2.3 percent.
JC Penney has six, 5-year renewal options at the same terms and conditions as
the initial lease. As retail sales are about $173 per square foot in 1997, the
tenant is not paying percentage; however, its total rental (base rent and
recoveries) is low at $4.06 per square foot, and its cost of occupancy is low at
2.3 percent compared to the other anchor tenants. There is a strong probability
that the tenant will renew its lease in September 2003 because of the low cost
of occupancy. In this analysis, we have projected that JC Penney will renew its
lease; however, we have given a $5.00 per square foot tenant finish contribution
from the landlord as an additional incentive for the tenant to renew.
OUTLOT LEASES
First of America Bank began in November 1988 and extends for 20-years to
November 2008. The rental rate began at $15.65 per square foot and steps to
$17.89 per square foot in November 1998 and $20.13 per square foot in November
2003. There is no percentage rent with this tenant. This tenant pays a
proportionate share of common area expenses and its own real estate taxes. The
bank has four 5-year renewal options, which we have projected will be exercised.
The per square foot rental for the each of the 5-year renewal options are:
$22.36, $24.60, $26.83 and $29.07.
Jose Babuska has a ten year lease beginning in July 1990 and terminating in June
2000. The rental is fixed at $14.81 per square foot. The tenant does not pay any
common area expenses to the landlord and pays its own real estate taxes. The
tenant has three, 5-year renewal options at the same terms and conditions as the
initial lease, including the rental rate. In this analysis, we have projected
that the tenant will renew its lease.
<PAGE>
LANDAUER 48
REAL ESTATE COUNSELORS
ENCLOSED MALL TENANT LEASES
The mall tenant leases vary in length, but average about 8-years in duration. In
most leases, enclosed mall expenses have a 15-percent administrative surcharge
added for calculating recoveries. Leases signed between 1988 and 1994 or 1995
require that the tenant pay enclosed mall expenses based on the total GLA of the
enclosed mall. However, more recent leases specify that the recovery calculation
be based on the occupied area of the mall. Tax recoveries include the anchor
taxes not paid by Sears and JC Penney because of their 1988 base year stop. This
tax recovery is not typical for regional malls and would increase the enclosed
mall tenants' occupancy costs. The enclosed mall is at a stabilized level with
an occupancy of about 96.4 percent and the new method for calculating enclosed
mall expense recoveries should result in a slightly higher amount of revenue to
the landlord. Common area and other common area (administration) expenses are
recovered based on the tenant's pro rata share of GLA for the enclosed mall and
Plaza. In most leases, the common area expenses have a 15-percent administrative
surcharge added for calculating recoveries. Most leases specify renewal options;
however, the renewal option rent is to be negotiated to a market level. For this
reason, renewal options are not modeled for the enclosed mall tenants.
Plaza tenant leases have a duration of about five years. These tenants do not
pay enclosed mall expenses but pay common area and other common area
(administration) expenses. In most leases, the common area expenses have a
15-percent administrative surcharge added for calculating recoveries. Most
leases specify renewal options; however, the renewal option rent is to be
negotiated to a market level. For this reason, renewal options are not modeled
for the enclosed mall tenants.
MARKET RENT
In estimating market rents for Westshore Mall, recent leases were analyzed,
actual spaces were examined and leasing plans were reviewed at the subject
center and at competitive centers. As summarized in the Addenda, since January
1993, 39 leases have commenced. For the Jewelry and outlot tenants, we have
included older leases because of the lack of new leases.
<PAGE>
LANDAUER 49
REAL ESTATE COUNSELORS
The weighted average by space category of the initial rents for these leases are
summarized as follows:
Recent Lease Summary
Size of Space No. of Average
(Sq. Ft.) Leases Rent/SF
--------- ------ -------
0-999 5 $27.81
1,000-1,999 8 $19.80
2,000 + 10 $15.82
Food 4 $35.40
Restaurant 2 $9.78
Kiosk 4 $122.67
Jewelry 4 $24.83
Plaza 7 $9.04
Total 44 $22.37 without Kiosk, Outlot & Plaza
At present, there are three vacant enclosed mall retail tenant units and one
enclosed mall food tenant unit. In this analysis, the market rent conclusion for
these spaces will be applied.
There is one ATM space at Westshore Mall, and we have applied a rental rate of
$185 per square foot for this space.
The four jewelry store tenants have an average rental of $24.83 per square foot.
The most recent jewelry store lease was $20.36 per square foot in 1995. The
older leases signed in 1998 suggest the rental rate for this tenant category has
not changed.
Market rents for Westshore Mall have been estimated on a tenant-by-tenant basis.
These estimates are influenced by recent leasing trends, the quality of the
location and the size of the space. Although rents vary by space, they generally
fall within a range dictated by the size of the space. Market rental rates for
1997 are summarized as follows:
<PAGE>
LANDAUER 50
REAL ESTATE COUNSELORS
Estimated Market Rent
Size of Space Market Rent
(Sq. Ft.) Per Sq. Ft.
--------- -----------
0-999 $30.00
1,000-1,999 $20.00
2,000 + $15.00
Food$35.00
Restaurant $10.00
Kiosk $125.00
Jewelry $25.00
Plaza $8.00
The forecasted basic lease structure and assumptions have been derived from the
market, as determined by the rent survey and activity at the subject. The
assumptions used in the DCF Analysis are:
Projection Period: The projection period begins January 1, 1997, and
extends for a term of 10 years through December,
2006. Calendar year 1997 (the first full year) is
used as the initial base year. The 11th year's (2007)
net operating income is capitalized to establish the
reversionary value and is added to the 10th year cash
flow.
Gross Leasable Area: 393,949 square feet
Lease Term: Typical enclosed mall retail leases at the
subject are for a 8-year term. Kiosk and
Plaza tenants have 5-year lease terms.
Growth Rates: Market rental rates have annual escalations of 3.5
percent from Year-1. Expense categories are escalated
annually at a rate of 3.5 percent through the
projection period, except for management fees which
are based upon a percentage of effective gross
income.
<PAGE>
ANCHOR CONTRIBUTIONS TO COMMON AREA MAINTENANCE EXPENSES
<TABLE>
<CAPTION>
Younkers Steketee's JC Penney Total Anchor
Sears 69,148 sq. ft. 40,755 sq. ft. 51,399 sq. ft. Contributions
Year Amount Per sq. ft. Amount Per sq. ft. Amount Per sq. ft. Amount Amount
================================================================================ ===============
<C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $ - $0.35 $ 24,202 $1.00 $40,755 $0.40 $20,560 $85,516
1998 $ - $0.35 $ 24,202 $1.00 $40,755 $0.40 $20,560 $85,516
1999 $ - $0.40 $ 27,659 $1.00 $40,755 $0.45 $23,130 $91,544
2000 $ - $0.40 $ 27,659 $1.00 $40,755 $0.45 $23,130 $91,544
2001 $ - $0.40 $ 27,659 $1.00 $40,755 $0.45 $23,130 $91,544
2002 $ - $0.40 $ 27,659 $1.00 $40,755 $0.45 $23,130 $91,544
2003 $ - $0.40 $ 27,659 $1.00 $40,755 $0.45 $23,130 $91,544
2004 $ - $0.45 $ 31,117 $1.00 $40,755 $0.50 $25,700 $97,571
2005 $ - $0.45 $ 31,117 $1.00 $40,755 $0.50 $25,700 $97,571
2006 $ - $0.45 $ 31,117 $1.00 $40,755 $0.50 $25,700 $97,571
2007 $ - $0.45 $ 31,117 $1.00 $40,755 $0.50 $25,700 $97,571
2008 $ - $0.45 $ 31,117 $1.00 $40,755 $0.50 $25,700 $97,571
2009 $ - $0.50 $ 34,574 $1.00 $40,755 $0.55 $28,269 $103,598
2010 $ - $0.50 $ 34,574 $1.00 $40,755 $0.55 $28,269 $103,596
2011 $ - $0.50 $ 34,574 $1.00 $40,755 $0.55 $28,269 $103,598
2012 $ - $0.50 $ 34,574 $1.00 $40,755 $0.55 $28,269 $103,598
2013 $ - $0.50 $ 34,574 $1.00 $40,755 $0.55 $28,269 $103,598
2014 $ - $0.55 $ 38,031 $1.00 $40,755 $0.60 $30,839 $109,626
2015 $ - $0.55 $ 38,031 $1.00 $40,755 $0.60 $30,839 $109,626
2016 $ - $0.55 $ 38,031 $1.00 $40,755 $0.60 $30,839 $109,626
2017 $ - $0.55 $ 38,031 $1.00 $40,755 $0.60 $30,839 $109,626
2018 $ - $0.55 $ 38,031 $1.00 $40,755 $0.60 $30,839 $109,626
2019 $ - $0.60 $ 41,489 $1.00 $40,755 $0.65 $33,409 $115,653
<CAPTION>
Allocation to Target's
Enclosed Common Common Total
Mall Area Area Enclosed Common
Year 72% 28% Contribution Mall Area
============================================================
<C> <C> <C> <C> <C> <C>
1997 $61,572 $23,945 $42,000 $61,572 $ 65,945
1998 $61,572 $23,945 $42,000 $61,572 $ 65,945
1999 $65,912 $25,632 $44,991 $65,912 $ 70,623
2000 $65,912 $25,632 $44,991 $65,912 $ 70,623
2001 $65,912 $25,632 $44,991 $65,912 $ 70,623
2002 $65,912 $25,632 $44,991 $65,912 $ 70,623
2003 $65,912 $25,632 $44,991 $65,912 $ 70,623
2004 $70,251 $27,320 $53,436 $70,251 $ 80,756
2005 $70,251 $27,320 $53,436 $70,251 $ 80,756
2006 $70,251 $27,320 $53,436 $70,251 $ 80,756
2007 $70,251 $27,320 $53,436 $70,251 $ 80,756
2008 $70,251 $27,320 $53,436 $70,251 $ 80,756
2009 $74,591 $29,008 $63,465 $74,591 $ 92,473
2010 $74,591 $29,008 $63,465 $74,591 $ 92,473
2011 $74,591 $29,008 $63,465 $74,591 $ 92,473
2012 $74,591 $29,008 $63,465 $74,591 $ 92,473
2013 $74,591 $29,008 $63,465 $74,591 $ 92,473
2014 $78,931 $30,695 $75,376 $78,931 $106,071
2015 $78,931 $30,695 $75,376 $78,931 $106,071
2016 $78,931 $30,695 $75,376 $78,931 $106,071
2017 $78,931 $30,695 $75,376 $78,931 $106,071
2018 $78,931 $30,695 $75,376 $78,931 $106,071
2019 $83,270 $32,383 $89,523 $83,270 $121,906
</TABLE>
<PAGE>
LANDAUER 51
REAL ESTATE COUNSELORS
REVENUE
Minimum Rent: Rental rates for current tenants are dependent on
specific lease terms which have been modeled in our
analysis. For currently vacant spaces and for lease
rollovers, tenant spaces have been assigned the
market rent for the appropriate category.
Most of the leases at the center are structured on a
net basis with the tenant responsible for their
defined pro rata share of operating expenses and real
estate taxes. According to a rent roll provided for
the appraisal more than 24 different expense recovery
schedules are identified. We have simplified the
recovery methods for most of the tenants, and the
general expense recovery structure applied in the
analysis is described below.
Enclosed Mall Expenses: Enclosed mall tenants pay a pro-rata share of
enclosed mall expenses based on a proportion of unit
size to either the enclosed mall GLA or the occupied
area of the enclosed mall, excluding anchor tenants.
The CAM recovery includes such expenses as insurance,
electricity, heat oil/gas, water and sewer, cleaning,
repair and maintenance and security. An
administrative fee of 15.0 percent is applied to this
total, and anchor tenant contributions are deducted
depending on terms specified in the individual anchor
leases. Anchor tenant contributions, as applied and
allocated, are shown on the facing page. It is
reported that Target pays a small amount toward costs
associated with maintaining the roads.
Common Area Expenses: This expense is related to the maintenance and repair
of the common area of the center (site, parking area,
etc.). Items included within this category include
landscaping, snow removal, insurance, lighting and
parking lot repairs. Most tenants pay a direct
pro-rata
<PAGE>
LANDAUER 52
REAL ESTATE COUNSELORS
share of these expenses based on the GLA at the mall.
This expense includes a 15.0 percent administrative
charge, and the expense total is offset by anchor
tenant contributions.
Other CAM Expenses: This expense category includes expense items such as
dues/subscriptions, office equipment, outside
services postage staff salaries and benefits, and
telephone. This expense category could also be
referred to as Administration. For recovery purposes,
no administrative surcharge is applied and the
expense is not offset by anchor tenant contributions.
Real Estate Taxes: Real estate taxes are recovered based on the tenants
prorated share of the GLA. As the anchor tenants are
not separately assessed for real estate taxes, they
also pay a prorated share of the expense. The two
outlots are separately assessed and pay their real
estate taxes, directly. In our analysis, we have
included the outlot taxes paid by the tenant, because
if these tenants ever vacate their buildings, the
landlord would be required to pay the taxes during
the time required to release the buildings. Two of
the anchors (Sears and JC Penney) pay real estate tax
increases over a 1988 base year amount, which we have
estimated to be $1.42 per square foot. This means
that anchor taxes totalling $146,848 would not be
recovered by the anchors. Leases for the enclosed
mall tenants are interpreted by the landlord; to
include a provision whereby these uncollected anchor
taxes are recovered by the enclosed mall tenants. We
have included this recovery method in the cash flow
model, but recognize it is not a typical tax recovery
method found in regional malls.
Percentage Rent: Also known as overage rent, percentage rent cited in
the existing leases vary from 2.0 to 15.0 percent of
sales above a natural or
<PAGE>
LANDAUER 53
REAL ESTATE COUNSELORS
predetermined breakpoint. The most typical percentage
rent rates found at the subject are 5.0 to 6.0
percent. Future sales volume forecasts for each
tenant are based upon the information from 1993,
1994, 1995, and year-to-date 1996 sales volume. Also,
the previous owner's 1997 sales projection was
considered.
Vacancy/Credit Loss: A 2.5 percent deduction is taken against effective
gross income to account for anticipated future
vacancies and credit losses. All mall tenants are
subject to the vacancy credit; however, the four
anchor stores are not subject to the credit loss
factor.
Miscellaneous Income: This category includes income from cart rental,
common area licenses and temporary tenants.
Miscellaneous income is estimated at $125,000 for
1997, and is increased at the general growth rate of
3.5 percent per year.
Tenant Retention Ratio: Upon the expiration of the existing leases, it is
estimated that 75 percent of the expiring enclosed
mall tenants will renew and 25 percent will vacate
when the leases expire. For the Plaza tenants, we
have assumed a 60 percent probability that they will
renew with a 40 probability that they will vacate
when their leases expire.
Vacancy Between Leases: A weighted average of two months vacancy between
leases is assumed at rollover. The weighted averages
assume an actual downtime of six to nine months for
non-anchor tenants.
Rent Concessions: Rent concessions are not common in the regional mall
market. However, some malls will give free rent inleu
of contributing toward the tenant's alterations. No
rent concessions are assumed in this analysis.
<PAGE>
LANDAUER 54
REAL ESTATE COUNSELORS
Lease-up Assumptions: As of January 1, 1997, the subject is projected to
have 6,768 square feet of vacant space, including a
2,239 square foot unit (B-16) that has never been
leased. Our assumptions for leasing the four vacant
units include leasing Unit B-1-008 in July 1997. This
unit contains 3,025 square feet and is located on the
main mall corridor near the center of the mall. It
has been vacant since October 1996, and there are no
prospects for leasing the unit. Unit B-1-015 contains
a temporary tenant, and we have projected this 1,165
square foot unit to lease on a permanent basis in
October 1997. Unit B-1-016 contains 2,239 square feet
and has never been leased. We have projected this
unit to lease in January 1998. The one vacant food
tenant unit (D-1-008) is projected to lease in April
1998. Rental rates and tenant finish allowances are
taken into consideration based on the characteristics
of individual spaces.
Options: Many of the tenants have renewal options included in
their original leases. Most of the renewal terms
cited in the leases indicate that the renewal rental
rate will be at the prevailing market level. For this
reason, we have not exercised any renewal options,
except for the anchor and outlot tenants.
Renewals: Upon expiration of current leases, tenants are
renewed at the higher of the last effective rent or
the market rent (base plus percentage rent) in the
renewal year. The sales volume continues from the
base lease. Each tenant is charged with a weighted
average tenant improvement allowance.
<PAGE>
WESTSHORE MALL HISTORICAL OPERATING EXPENSES
<TABLE>
<CAPTION>
Annualized Budget 1996 amount Concluded
Item 1993 1994 1995 0ct-96 1996 1996 plus 3.5% 1997
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income
Minimum Rent $3,128,302 $3,104,402 $3,115,520 $2,833,823 $3,400,588 $2,657,861 $3,519,608 $3,456,135
Overage Rent $ 292,190 $ 292,417 $ 171,927 $ 107,163 $ 128,596 $ 137,521 $ 133,096 $ 286,390
CAM Recovery $ 485,375 $ 837,181 $ 457,095 $ 592,924 $ 711,509 $ 480,594 $ 736,412 $ 726,059
Tax Recovery $ 611,488 $ 756,792 $ 549,867 $ 441,829 $ 530,195 $ 510,483 $ 548,752 $ 566,302
Anchor CAM $ 161,680 $ 139,604 $ 135,226 $ - $ 104,397
Misc. Income $ 172,698 $ 170,668 $ 194,552 $ 99,713 $ 119,656 $ 63,750 $ 123,844 $ 125,000
---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total Income $4,851,733 $5,301,064 $4,624,187 $4,075,452 $4,890,542 $3,850,209 $5,061,711 $5,264,283
Less: Vacancy & Credit $ - $ - $ - $ - $ - $ - $ - $ 98,710
---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Effective Gross Income $4,851,733 $5,301,064 $4,624,187 $4,075,452 $4,890,542 $3,850,209 $5,061,711 $5,165,573
Expenses
Enclosed Mall 40xx $ 365,612 $ 411,827 $ 390,296 $ 318,886 $ 382,663 $ 339,463 $ 396,056 $ 400,000
CAM 41xx $ 102,296 $ 216,717 $ 288,860 $ 234,134 $ 280,961 $ 220,607 $ 290,794 $ 250,000
CAM Special 44xx $ 56,355 $ - $ 1,042 $ - $ - $ - $ - $ -
CAM, Other 45xx $ 152,977 $ 200,824 $ 129,942 $ 118,679 $ 142,415 $ 124,341 $ 147,399 $ 147,000
Utility $ 28,266 $ - $ 21,284 $ 19,204 $ 23,045 $ 12,100 $ 23,851 $ 24,000
Management Fee $ 252,281 $ 214,423 $ 147,206 $ 122,794 $ 147,353 $ 112,342 $ 152,510 $ 206,623
Owner's $ 62,132 $ 62,771 $ 86,373 $ 58,891 $ 70,669 $ 78,080 $ 73,143 $ 73,000
Miscellaneous $ 76,651 $ 75,348 $ 67,815 $ 56,082 $ 67,298 $ 83,894 $ 69,654 $ 70,000
Property Tax $ 653,886 $ 687,746 $ 592,697 $ 493,413 $ 592,096 $ 528,500 $ 612,819 $ 608,141
Insurance $ - $ - $ 7,000 $ - $ - $ - $ - $ 7,500
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Expenses $1,750,456 $1,869,656 $1,732,515 $1,422,083 $1,706,500 $1,499,327 $1,766,227 $1,786,264
Net Income $3,101,277 $3,431,408 $2,891,672 $2,653,369 $3,184,043 $2,350,882 $3,295,484 $3,379,309
Management Fee $ 252,281 $ 214,423 $ 147,206 $ 122,794 $ 147,353 $ 112,342 $ 152,510 $ 206,623
Percent of Income 5.20% 4.04% 3.18% 3.01% 3.01% 2.92% 3.01% 4.00%
</TABLE>
<PAGE>
LANDAUER 55
REAL ESTATE COUNSELORS
EXPENSES
Operating Expenses: Operating expense estimates for Westshore Mall were
based primarily upon historical data from 1993, 1994,
and 1995 and year-to-date (October 1996) figures. The
1997 budget estimate of expenses was not provided. We
have also taken into consideration expense data from
other similar shopping centers as well as from trade
publications such as Dollars and Cents of Shopping
Centers: 1995, published by the Urban Land Institute.
However, our expense conclusion is based primarily
upon the historical levels found at the subject. When
analyzing the operating statements, we have
reconciled the anchor tenant contributions which
shows as a deduction in the statement. A summary of
the historical operating levels are found in the
table on the facing page.
Enclosed Mall (40xx): Enclosed mall expenses include items such as air
conditioning, cleaning, repairs, insurance, lighting,
music, pest control security, seasonal decorations,
supplies, water and sewer. This expense has averaged
about $389,000 between 1993 and 1995. The annualized
1996 amount is $382,663. We have increased the 1996
annualized amount by 3.5 percent and have concluded
$400,000 for 1997.
Common Area (41xx): The common area expenses are for maintaining the
exterior common area including landscaping, parking
lot and ring road. The expense items include pest
control, security, sweeping, snow removal, trash
removal, water and sewer. The expense has averaged
about $202,000 between 1993 and 1995. The annualized
1996 expense level is $280,961 with the 1996 budget
citing $220,607. We have concluded the 1997 common
area expense within the range of the data, at
$250,000.
<PAGE>
LANDAUER 56
REAL ESTATE COUNSELORS
Other CAM (45xx): This expense category includes office and
administrative expenses including: dues,
subscriptions, office equipment, office supplies,
promotion and entertainment, postage, telephone,
training and seminars and staff salaries and
benefits. The expense has averaged about $161,000
between 1993 and 1995. The 1996 annualized amount is
$142,415. The 1996 budget cites $124,341. We have
concluded $147,000 or 3.5 percent greater than the
1996 annualized amount.
Utility Expenses: Utility expenses are combined with CAM expenses for
recovery purposes but are reported separately. The
since 1993, the expense has relatively stable, and we
have concluded $24,000 for 1997.
Management Fee: Management fees in the regional mall market range
from 3.0 percent to 5.0 percent, depending the
revenues to which it is applied and whether leasing
commissions are paid separately. For most malls, the
management fee is typically in the range of 4.5
percent of minimum and percentage rent and utility
sales, charged between related entities. A higher
management fee of 5.0 percent would be applied to a
lower level of minimum and percentage rent. When
applied to all revenue, management fees range between
3.0 and 3.5 percent. For the Westshore Mall, we
conclude 4.0 percent which is applied to all revenue
and which includes commissions for leasing of the
spaces.
Owner's Expenses: This expense includes the owner's contribution to the
Merchant's Association which is cited in many leases
as $25,000. Other owner's expenses include auditing
and professional services fees, legal fees and
miscellaneous promotion expenses. The expense has
<PAGE>
LANDAUER 57
REAL ESTATE COUNSELORS
averaged about $50,000 between 1993 and 1995. The
1996 annualized amount is $70,669. We have concluded
the total 1997 expense as $73,000 but have separately
shown the Merchant's Association Contribution.
Miscellaneous: Miscellaneous expenses include expenses for customer
service, carts, temporary tenant expenses and
information center. The expense has averaged about
$73,000 between 1993 and 1995. The 1996 annualized
amount is $67,298 with a 1996 budget citing $83,894.
We have increased the 1996 annualized amount by 3.5
percent and have concluded $70,000 for 1997.
Insurance: Insurance expenses have been concluded to be $7,500
for 1997. In 1995 they were, $7,000 but are not
identified in the October 1996 operating statement.
Real Estate Taxes: Real estate taxes are concluded at an estimated level
as discussed in the previous Real Estate Tax section
of the report. Taxes for the mall and anchors, plaza
and outlots are included in the analysis. We have not
included the real estate taxes for the owned vacant
land parcels. As displayed in the Real Estate Tax
Section of this report, the subject's taxes are based
on historical levels levied against the subject;
however, "fully assessed" taxes based on our value
indication by the Income Approach ($33,000,000) are
approximately $708,147, or about $100,000 greater
than the current tax level. As reported by the
seller, the sale price of $30,159,000, if used by the
assessor to calculate the taxes, would result in a
tax increase of about $39,000. The result of
increased taxes on tenant retention is unknown as
occupancy costs would increase. Since estimating real
estate tax increases is speculative and conjectural,
<PAGE>
LANDAUER 58
REAL ESTATE COUNSELORS
the possible impact that a sale would have on real
estate taxes is not applied in this analysis as the
taxes are recovered by the tenants.
TOTAL EXPENSES
The total expenses as concluded for 1997 are projected to be $1,790,138. The
1993 actual expenses were $1,750,456 and 1994 expenses were $1,869,656. In 1995
expenses totaled $1,732,515 and were budgeted to be $1,499,327 in 1996. The 1996
annualized amount is estimated to be $1,766,227. Our 1997 conclusion of
$1,790,138 is not out of line based on historical expenses. Overall, the
expenses are lower than typical for regional malls because of the lower real
estate taxes paid in a suburban setting.
<PAGE>
OCCUPANCY COSTS FOR WESTSHORE MALL
<TABLE>
<CAPTION>
All Tenants
Minimum Overage Sub Total Expense Total Total Occupancy Cost
Year Rent Rent Expense Recoveries Tenant Cost Retail Sales Sub/Sales Total/Sales
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $3,456,135 $286,390 $3,742,525 $1,396,758 $5,139,283 $70,273,000 5.33% 7.31%
1998 $3,545,062 $310,748 $3,855,810 $1,489,157 $5,344,967 $71,413,000 5.40% 7.48%
1999 $3,728,801 $288,911 $4,017,712 $1,582,970 $5,600,682 $74,343,000 5.40% 7.53%
2000 $3,829,544 $322,855 $4,152,399 $1,655,328 $5,807,727 $77,214,000 5.38% 7.52%
2001 $3,915,380 $357,042 $4,272,422 $1,735,229 $6,007,651 $80,269,000 5.32% 7.48%
2002 $3,965,953 $392,593 $4,358,546 $1,806,577 $6,165,123 $83,176,000 5.24% 7.41%
2003 $3,990,158 $459,740 $4,449,898 $1,873,125 $6,323,023 $85,697,000 5.19% 7.38%
2004 $4,076,378 $500,465 $4,576,843 $1,952,271 $6,529,114 $88,536,000 5.17% 7.37%
2005 $4,141,730 $546,975 $4,688,705 $2,032,231 $6,720,936 $92,085,000 5.09% 7.30%
2006 $4,147,328 $585,291 $4,732,619 $2,095,560 $6,828,179 $94,161,000 5.03% 7.25%
=================================================================================================
Totals $3,879,647 $405,101 $4,284,748 $1,761,921 $6,046,669 $81,716,700 5.24% 7.40%
<CAPTION>
Enclosed Mall Tenants
Minimum Overage Sub Total Expense Total Total Occupancy Cost
Year Rent Rent Expense Recoveries Expenses Retail Sales Sub/Sales Total/Sales
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $2,301,253 $106,434 $2,407,687 $ 990,066 $3,397,753 $29,982,000 8.03% 11.33%
1998 $2,381,055 $117,514 $2,498,569 $1,033,540 $3,532,109 $29,847,000 8.37% 11.83%
1999 $2,534,067 $ 82,323 $2,616,390 $1,097,151 $3,713,541 $31,325,000 8.35% 11.85%
2000 $2,613,649 $ 97,921 $2,711,570 $1,150,927 $3,862,497 $32,570,000 8.33% 11.86%
2001 $2,683,757 $120,580 $2,804,337 $1,205,217 $4,009,554 $34,014,000 8.24% 11.79%
2002 $2,738,228 $137,863 $2,876,091 $1,255,928 $4,132,019 $35,335,000 8.14% 11.69%
2003 $2,765,990 $183,490 $2,949,480 $1,305,067 $4,254,547 $36,293,000 8.13% 11.72%
2004 $2,833,079 $202,368 $3,035,447 $1,358,175 $4,393,622 $37,506,000 8.09% 11.71%
2005 $2,883,598 $220,589 $3,104,187 $1,420,714 $4,524,901 $39,172,000 7.92% 11.55%
2006 $2,862,116 $240,253 $3,102,369 $1,449,665 $4,552,034 $39,233,000 7.91% 11.60%
=================================================================================================
Totals $2,659,679 $150,934 $2,810,613 $1,226,645 $4,037,258 $34,527,700 8.14% 11.69%
</TABLE>
<PAGE>
LANDAUER 59
REAL ESTATE COUNSELORS
OCCUPANCY COSTS
Occupancy costs for the mall and tenants were reviewed. It is found that the
occupancy costs generally decline over the holding period and, for the mall
including anchors. The average is about 7.40 percent over the ten-year holding
period for all tenants, as shown in the table on the facing page. As a bench
mark, the enclosed mall retail tenants, including the food and kiosk tenants,
have an average occupancy cost of about 11.69 percent over the ten-year holding
period. We note for both of these calculations, that the tenant's Merchant
Association Fees are not included in the calculation. If the tenant's Merchant
Association Fees were included the occupancy costs would likely increase a small
amount. Within the regional mall market, enclosed mall (in-line) retail tenant's
occupancy costs would be in the 12.0 percent range, and the subject's occupancy
costs are near the average.
On a tenant by tenant basis for enclosed mall tenants, the occupancy cost ranges
from 7.0 to 28.0 percent. Those tenants with low occupancy costs would likely
have a high probability of renewing their leases upon expiration of their lease.
Conversely, the tenants with high occupancy costs would have a low probability
of renewing their leases upon lease expiration. Nevertheless, the total mall
occupancy cost is within reason, and we have confidence in the cash flow and
assumptions used in the analysis. The occupancy costs from this analysis appear
reasonable, and point to a stable mall operation.
CAPITAL ITEMS
This non-operating expense category includes tenant alteration and improvement
costs, leasing commissions, and a capital reserve (or reserve for capital
replacements).
Tenant Alterations: We note that about the time that many of the current
enclosed mall tenant leases expire in 1998 and 1999, the tenant spaces will be
10-years old and would require some refurbishing. Furthermore, the enclosed mall
tenants renewal options specify that the renewal rental rate will be
renegotiated to a market level, and there is no rental rate incentive for the
tenant renew. The landlord
<PAGE>
LANDAUER 60
REAL ESTATE COUNSELORS
and tenant will renegotiate the rental rate with the tenant most likely
demanding that the landlord contribute to refurbishing its space as if it was a
new lease. Furthermore, as the neighborhood continues to develop its commercial
character, additional discount retailers would enter the market and compete with
tenant sales at the mall. Examples of this retail penetration include, Target,
WalMart, Sam's Club and Kohl's. To remain competitive in the future, new tenants
will likely demand and receive from the landlord a larger amount of tenant
finish.
Historical detail on landlord's new tenant improvement allowance is limited. In
1988 and 1989 when the mall was in its initial lease-up period, the tenant
finish contribution was about $10.00 per square foot for new tenants. Increasing
the 1988 costs by a compound rate of 3.5 percent results in a current tenant
improvement allowance of about $13.60 per square foot. For those tenants where
the landlord's contribution was cited in the leases, the contribution has ranged
from $8.00 to $45.00 per square foot. A "Recent Lease Analysis" provided by the
landlord indicates tenant finish contributions range from $1.94 to $45.00 per
square foot, averaging $14.45 per square foot for eight new leases. Local
tenants would typically receive a lesser amount of tenant finish as will tenants
with short term leases. National and retail tenants with longer lease terms or
good credit would receive a greater amount of tenant finish from the landlord.
At Westshore Mall, we anticipate some allowance above the recent average will
usually be necessary, and we project an allowance of $16.00 per square foot for
new enclosed mall retail tenants, with no allowance for tenant renewal. The
allowance equates to about $2.00 per square foot per year of lease term. The
$16.00 per square foot allowance is also applied to the outlot tenants.
Plaza tenants have received a tenant finish allowance ranging from $2.50 to
$6.25 per square foot. As the Plaza does not have frontage on US-31 or James
Street, we have increased the allowance to $5.00 per square foot to keep the
Plaza shops competitive with the strip centers in the neighborhood.
As the anchor leases all expire during the analysis period (2003) and as we have
assumed that the anchors will exercise their options, we have given a nominal
amount of tenant finish to freshen each of the anchor units. It is recalled that
the new mall in Grandville, Michigan is projected to be opened in
<PAGE>
LANDAUER 61
REAL ESTATE COUNSELORS
1998 or 1999 and will provide some competition for the subject's anchors. As an
incentive to renew their leases, we have given each anchor $5.00 per square foot
in 2003.
Leasing Commissions: Leasing commissions at the subject property are not applied
and are included in the management fee.
Capital Reserves: This category accounts for the fact that capital items such as
the roof, building mechanical systems, and parking lot eventually will need
major repairs or replacement. We are projecting a $0.15 per square foot expense,
growing at a 3.5 percent rate.
Cash Flow Analysis: Based upon the foregoing assumptions and projections, the
cash flow forecast for Westshore Mall is presented on the following page.
<PAGE>
WESTSHORE MALL
ANNUAL CASH FLOW REPORT
BEGINNING 1/1/97 FOR 11 YEARS
<TABLE>
<CAPTION>
CY1997 CY1998 CY1999 CY2OOO CY2OO1 CY2OO2 CY2003 CY2004
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME
- ------
MINIMUM RENT:
ALL TENANTS 3,456,135 3,545,062 3,728,801 3,829,544 3,915,380 3,965,953 3,990,158 4,076,378
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL MINIMUM RENT 3,456,135 3,545,062 3,728,801 3,829,544 3,915,380 3,965,953 3,990,158 4,076,378
RECOVERIES:
ENCLOSED MALL 387,237 404,992 421,565 441,260 460,800 479,651 498,803 514,715
COMMON AREA & UTL. 215,873 228,355 240,278 251,997 267,589 280,310 288,542 296,127
ADMINISTRATIVE 122,949 128,990 140,524 147,444 155,226 161,281 164,723 173,104
TAX & INS. 566,302 590,572 640,337 672,656 707,878 739,772 771,834 813,607
ANCHOR CAM 104,397 136,248 140,266 141,971 143,736 145,563 149,223 154,718
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RECOVERIES 1,396,758 1,489,157 1,582,970 1,655,328 1,735,229 1,806,577 1,873,125 1,952,271
OVERAGE RENT 286,390 310,748 288,911 322,855 357,042 392,593 459,740 500,465
GROSS RENTAL
INCOME 5,139,283 5,344,967 5,600,682 5,807,727 6,007,651 6,165,123 6,323,023 6,529,114
CREDIT LOSS ( 98,710) ( 102,477) ( 108,129) ( 112,569) ( 116,805) ( 119,953) ( 123,033) ( 127,258)
MISC. INCOME 125,000 129,375 133,903 138,590 143,440 148,461 153,657 159,035
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL INCOME 5,165,573 5,371,865 5,626,456 5,833,748 6,034,286 6,193,631 6,353,647 6,560,891
EXPENSES
- --------
ENCLOSED MALL 400,000 414,000 428,490 443,487 459,009 475,074 491,702 508,912
COMMON AREA 250,000 258,750 267,806 277,179 286,881 296,922 307,314 318,070
ADMINISTRATIVE CAM 147,000 152,145 157,470 162,982 168,686 174,590 180,701 187,025
UTILITIES 24,000 24,840 25,709 26,609 27,541 28,504 29,502 30,535
MERCHANTS EXPENSE 25,000 25,875 26,781 27,718 28,688 29,692 30,731 31,807
OTHER OWNER 48,000 49,680 51,419 53,218 55,081 57,009 59,004 61,069
MISCELANEOUS 70,000 72,450 74,986 77,610 80,327 83,138 86,048 89,060
INSURANCE 7,500 7,762 8,034 8,315 8,606 8,908 9,219 9,542
TOTAL MALL TAX 608,141 629,426 651,456 674,257 697,856 722,281 747,560 773,725
MANAGEMENT FEE 206,623 214,875 225,058 233,350 241,371 247,745 254,146 262,436
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL EXPENSES 1,786,264 1,849,803 1,917,209 1,984,725 2,054,046 2,123,863 2,195,927 2,272,181
--------- --------- --------- --------- --------- --------- --------- ---------
NET OPERATING
INCOME 3,379,309 3,522,062 3,709,247 3,849,023 3,980,240 4,069,768 4,157,720 4,288,710
ALTERATIONS 67,040 162,429 141,012 101,074 62,328 36,719 1,147,534 77,854
CAPTIAL RESERVE 59,092 61,161 63,301 65,517 67,810 70,183 72,640 75,182
--------- --------- --------- --------- --------- --------- --------- ---------
CASH FLOW 3,253,177 3,298,472 3,504,934 3,682,432 3,850,102 3,962,866 2,937,546 4,135,674
<CAPTION>
CY2005 CY2006 CY2007
<S> <C> <C> <C>
INCOME
- ------
MINIMUM RENT:
ALL TENANTS 4,141,730 4,147,328 4,390,466
--------- --------- ---------
TOTAL MINIMUM RENT 4,141,730 4,147,328 4,390,466
RECOVERIES:
ENCLOSED MALL 535,345 556,534 578,469
COMMON AREA & UTL. 311,439 321,558 333,692
ADMINISTRATIVE 180,506 184,862 190,324
TAX & INS. 848,197 873,766 906,354
ANCHOR CAM 156,744 158,840 161,010
--------- --------- ---------
TOTAL RECOVERIES 2,032,231 2,095,560 2,169,849
OVERAGE RENT 546,975 585,291 557,573
GROSS RENTAL
INCOME 6,720,936 6,828,179 7,117,888
CREDIT LOSS ( 131,179) ( 132,955) ( 139,261)
MISC. INCOME 164,601 170,362 176,325
--------- --------- ---------
TOTAL INCOME 6,754,358 6,865,586 7,154,952
EXPENSES
- --------
ENCLOSED MALL 526,724 545,159 564,239
COMMON AREA 329,202 340,724 352,650
ADMINISTRATIVE CAM 193,571 200,346 207,358
UTILITIES 31,603 32,710 33,854
MERCHANTS EXPENSE 32,920 34,072 35,265
OTHER OWNER 63,207 65,419 67,709
MISCELANEOUS 92,177 95,403 98,742
INSURANCE 9,876 10,222 10,579
TOTAL MALL TAX 800,805 828,834 857,843
MANAGEMENT FEE 270,173 274,624 286,198
--------- --------- ---------
TOTAL EXPENSES 2,350,258 2,427,513 2,514,437
--------- --------- ---------
NET OPERATING
INCOME 4,404,100 4,438,073 4,640,515
ALTERATIONS 79,440 167,091 202,222
CAPTIAL RESERVE 77,813 80,537 83,356
--------- --------- ---------
CASH FLOW 4,246,847 4,190,445 4,354,937
</TABLE>
<PAGE>
LANDAUER 63
REAL ESTATE COUNSELORS
DISCOUNTED CASH FLOW ANALYSIS
As previously discussed, once the projected income stream over the projection
period is determined, the next step is to discount the periodic cash flow and
the reversion at the end of the holding period to an indicated value as of the
valuation date. The following definitions and assumptions were employed in our
analysis.
Net Operating Income: Net income remaining after all expenses but before capital
items, i.e., tenant improvement cost, leasing commissions, and capital
expenditures.
Cash Flow: Income available after all capital items, including reserves, leasing
commissions and tenant improvements.
Overall Rate: A rate which reflects the relationship of the first year's net
income to total value, derived by dividing the net income by the indicated
value.
Discount Rate: A rate of return used to estimate the present value of future
cash flows including the reversion (sales proceeds) of the property at the end
of the holding period. The discount rate is alternately called an Internal Rate
of Return.
Terminal Capitalization Rate: An overall rate applied to the projected net
operating income at the end of the holding period to determine the amount of the
reversion. A disposition fee is usually deducted from the reversion.
Holding Period: A holding period is the term of ownership of an investment, also
referred to as the projection period for the purposes of analysis and valuation.
<PAGE>
LANDAUER 64
REAL ESTATE COUNSELORS
RATE SELECTION
The selection of appropriate Discount Rates and Terminal Capitalization Rates
for use in arriving at an estimate of value is a judgmental process. Community
centers similar to the subject have a market appeal to both national and local
investors. Therefore, competition with many other investment vehicles has an
influence on rates of return required by investors.
One method used to estimate an appropriate discount rate to apply in the
discounted cash flow model is to analyze the investment parameters of
institutional-type investors, both for real estate and non-real estate types of
investments.
The following yields were noted for non-real estate investments for the year
ending January 10, 1997.
Non-Real Estate Investment Yields
Investment Instrument Yield Rate
--------------------- ----------
Government Bonds (10 Years) 6.57%
U.S. Treasury (30 Years) 6.80%
Aaa-rated Corporate Bonds 7.42%
Baa-rated Corporate Bonds 8.11%
A-rated Utility Bonds (30 Years) 7.95%
Government issues, considered near risk-free, tend to offer the lowest yield,
while Baa-rated issues are generally among the highest. Yield rates have
increased since one year ago in response to a slowing economy. Ten-year
government bonds have increased over 83 basis points since last year, with
30-year treasury bills increasing 68 basis points.
For real estate investments, rates may be influenced by risk, degree of
liquidity, burden of management, tax benefits, and future appreciation or
depreciation. Adjustments must be made to the safe rate to compensate for these
factors. Consequently, required real estate yields are generally higher than
those for non-real estate investments.
<PAGE>
Survey of Investment Criterea
Fourth Quarter, 1996
Regional Mall Market
Current Last Year
Quarter Quarter Ago
------- ------- ---
Free & Clear Equity IRR
- -----------------------
Range 10.00%-14.00% 10.00%-14.00% 10.00%-14.00%
Average 11.69% 11.56% 11.55%
Change (Basis Points) - 13 14
Free & Clear Equity Cap Rate
- ----------------------------
Range 7.00%-11.00% 6.25%-11.00% 6.25%-11.00%
Average 8.57% 8.33% 7.86%
Change (Basis Points) - 24 71
Market Rent Change Rate
- -----------------------
Range 0.00%-4.00% 0.00%-4.00% 0.00%-4.50%
Average 2.64% 2.64% 3.16%
Change (Basis Points) - 0 -52
Expense Change Rate
- -------------------
Range 3.00%-4.00% 3.00%-4.00% 3.00%-5.00%
Average 3.83% 3.83% 3.98%
Change (Basis Points) - 0 -15
Residual Cap Rate
- -----------------
Range 7.00%-11.00% 7.00%-11.00% 7.00%-11.00%
Average 8.76% 8.71% 8.45%
Change (Basis Points) - 5 31
Source: Peter F. Korpacz & Associates, Inc. - Quarterly Survey of Investment
Criterea
National Investor Survey
Third Quarter 1996
Regional Malls, Class "A"
Third Quarter Third Quarter First Quarter
1996 1995 1996
---- ---- ----
Free & Clear Equity IRR
- -----------------------
Range 10.00%-11.80% 10.00%-13.00% 10.00%-11.50%
Average 11.10% 11.10% 11.00%
Change (Basis Points) - 0 10
Free & Clear Equity Cap Rate
- ----------------------------
Range 7.00%-9.00% 7.00%-11.00% 6.00%-10.00%
Average 8.2% 7.80% 8.0%
Change (Basis Points) - 40 20
Market Rent Change Rate
- -----------------------
Range 2.00%-5.00% 2.00%-4.00% 0.00%-6.00%
Average 3.20% 3.30% 3.50%
Change (Basis Points) - -10 -30
Expense Change Rate
- -------------------
Range 3.00%-4.00% 3.00%-5.00% 3.00%-4.00%
Average 3.70% 3.90% 3.80%
Change (Basis Points) - -20 -10
Residual Cap Rate
- -----------------
Range 7.00%-9.50% 7.00%-11.00% 8.00%-10.00%
Average 8.70% 8.30% 8.70%
Change (Basis Points) - 40 0
Source: CB Commercial National Investor Survey
<PAGE>
LANDAUER 65
REAL ESTATE COUNSELORS
The discount rates and terminal capitalization rates applicable to first-tier
regional malls have remained relatively stable over the last year. As summarized
on the facing page, according to the Korpacz Real Estate Investor Survey, Fourth
Quarter 1996, discount rates range from 10.0 to 14.0 percent, with an average of
11.69 percent. This represents a 14 basis point increase from average rates of
one year ago. Residual capitalization rates range from 7.0 to 11.0 percent, with
an average of 8.76 percent, a 31 basis point increase from third quarter 1995
levels. First year overall rates are reported at 7.00 to 11.0 percent with an
average of 8.57 percent, representing a 71 basis point increase from last year's
rates. CB Commercial's National Investor Survey, Third Quarter 1996, also
indicates lower ranges for Class A regional malls, but similar averages in
discount rates (10.0-11.8 percent, average 11.1 percent), terminal
capitalization rates (7.0-9.5 percent, average 8.7 percent), and going-in
capitalization rates (7.0-9.0 percent, average 8.2 percent). These rates show
changes from the first quarter of 1996, with the exception of the terminal
capitalization rate which did not change.
In addition to the investor survey, we have reviewed the market for recent sales
of regional malls in order to extract rates from the market. The table on the
following facing page shows the rates for the regional mall sales that have sold
since 1991.
The sales indicate a range of discount rates (IRR) from 10.50 to 14.70 percent
with an average of 11.91 percent. Initial capitalization rates range from 6.80
to 12.60 percent with an average of 8.44 percent. Overall rates varied based on
the number of anchors included in the sale as well as on expansion opportunities
of a center. This usually results in a lower rate because investors can expect
to reap a development profit from a potential increase in cash flow.
Yield requirements for investment properties throughout the United States have
been relatively stable over the past year and competition for the better
properties appears to be steady due to a variety of factors, including the
scarcity of good quality investment real estate, the desire for an adequate
hedge against inflation, and the quest for a safe haven for investment capital.
Arising out of concerns over troubled real estate markets due to a receding
economy and overbuilding, investor cash flow
<PAGE>
ASSUMPTIONS AND RATES FROM SALES
REGIONAL MALLS
Price/
Sale # of Sale
Location Date OAR IRR Anchors Ratio
=======================================================================
Michigan Dec-96 10.50% -- 4 0.43
Illinois Dec-96 7.90% -- 0 --
California Nov-96 9.10% 15.20% 2 0.47
Montana Nov-96 9.90% 15.80% 2 0.47
Illinois Nov-96 8.90% -- 0 0.83
Tennessee Nov-96 9.90% -- 0 0.33
Texas Oct-96 9.00% -- 1 0.80
Arizona Oct-96 10.00% -- 1 0.50
California Jun-96 10.30% -- 0 0.69
Illinois Apr-96 9.56% 12.00% 4 0.56
Connecticut Mar-96 6.80% -- 0 --
California Mar-96 7.60% -- 1 1.18
Pennsylvania Mar-96 13.00% 10.50% 0 0.50
Florida Feb-96 7.70% -- 0 0.80
New Jersey Aug-95 8.70% -- 0 1.09
California Jun-95 8.90% 12.30% 0 0.95
Massachusetts Apr-95 8.50% 10.70% 1 0.81
California Jan-95 12.60% 13.50% 0 0.50
California Jan-95 7.80% 10.50% 0 1.14
Virginia Jan-95 7.80% -- -- 0.55
Texas Dec-94 6.70% 11.60% 0 1.03
Texas Dec-94 8.70% 11.50% 2 0.39
Florida Dec-94 8.20% 11.50% 1 1.00
Florida Dec-94 8.60% 12.00% 0 0.80
Arizona Dec-94 7.80% -- -- 1.02
Missouri Dec-94 8.00% 12.10% 0 --
Louisiana Dec-94 10.70% -- 0 0.50
No. Carolina Sep-94 10.60% 14.70% 0 0.50
Virginia Jul-94 9.00% -- 3 1.11
Louisiana Jul-94 8.90% -- 2 1.10
Florida Jun-94 7.50% 11.00% All 1.22
Alabama Feb-94 7.40% 11.50% 0 1.10
California Dec-93 7.00% -- 0 1.12
Arizona Dec-93 8.00% 11.00% 0 1.17
Florida Dec-93 7.50% 11.50% 0 0.91
Ohio Dec-93 7.50% 11.30% 0 1.16
New Mexico Dec-93 7.25% 11.00% 1 0.76
New Jersey Jul-93 7.50% 12.40% 1 0.68
9.00%
Oregon Jul-93 8.00% 11.50% 0 0.88
No. Carolina Jul-93 7.00% 12.10% 2 0.77
Florida May-93 7.50% 12.00% 1 0.64
Texas May-93 8.50% 12.20% 1 0.85
Florida Jan-93 7.50% 11.00% 0 1.00
Florida Dec-92 7.25% 11.50% 0 1.50
11.70% 11.70%
Illinois Dec-92 8.00% 12.00% 1 0.96
Texas Sep-92 8.00% 12.00% 1 0.73
Connecticut Aug-92 7.00% 11.50% 0 --
Florida Jul-92 7.10% 11.50% 1 0.81
Florida Apr-92 7.00% 11.10% 0 1.24
Nebraska Apr-92 7.50% 12.50% 1 0.79
Florida Mar-92 7.90% 11.50% 1 0.79
Pennsylvania Dec-91 6.80% 11.20% 1 0.55
Maine Dec-91 7.30% 11.80% 3 --
===== ===== ====
Average 8.44% 11.91% 0.85
<PAGE>
LANDAUER 66
REAL ESTATE COUNSELORS
projections today tend to be more "realistic", incorporating assumptions and
probabilities in keeping with actual market experience and predicated upon
moderate future expectations.
Good quality regional malls remain the top property preference for investors.
Demand for these relatively scarce properties is strong and the market is
characterized as a "seller's" market whereby the best properties are bid up in
price. The market for average or "B" quality malls is less active than "A" malls
like the subject in similar locations, and these properties must be
competitively priced in order to attract buyers.
The subject property is considered among the top malls in its metropolitan area,
and because of its suburban setting, some possibility exists for new competition
being constructed. Competition primarily comes from existing retail in the
neighborhood, Woodland Mall in Grand Rapids, and the proposed mall in
Grandville. Suburban malls generally do not have the density of population
available to urban malls are not convenient to most employees during or after
work hours in the suburban environment. However, the typical real estate tax
recovery method would include additional risk in the cash flow if the enclosed
mall tenants insisted upon tax recoveries as found in other regional malls.
Taking these factors into consideration, it is our opinion that a discount rate
of 12.5 percent is applicable to the cash flows forecast during the ten year
holding period. Further, a terminal capitalization rate of 10.0 percent applied
to the 11th year net operating income is appropriate to calculate the reversion
value estimate.
VALUATION BY DISCOUNTED CASH FLOW ANALYSIS
The initial step when discounting with this methodology is to estimate the
appraised property's reversionary value. Our reversion calculation assumes that
the property would be sold at the end of the previously stated holding period.
The reversion value of the property at that time is estimated by dividing the
forecast net operating income (NOI) from the year following the projected
holding period by the terminal capitalization rate. In addition, disposition
costs of 2.0 percent are applied against the
<PAGE>
LANDAUER 67
REAL ESTATE COUNSELORS
reversionary value in order to arrive at an estimate of the net reversion. The
net reversion value is added to the last year of the projection period's net
cash flow, which then represents the total future net cash flow to be received
in that last year.
MARKET VALUE ANALYSIS AS OF DECEMBER 31, 1996
This analysis begins January 1, 1997, and continues for ten years, ending
December 31, 2006. The 11th year net operating income (Calendar Year 2007) is
capitalized to produce an estimated reversionary value at the end of the holding
period.
Considering the foregoing, the results of our analysis for Westshore Mall is as
follows:
Calculation of the Reversion
11th Year NOI (CY 2007) $4,640,515
Terminal Cap Rate 10.0%
Gross Reversion $46,405,150
Disposition Costs (2.0%) (928,103)
--------
Net Reversion $45,477,047
This net reversion is then added to the 10th year's net cash flow, which then
represents the total future net cash flow to be received in the 10th year. The
following matrix shows the values indicated by discounting the cash flows at
rates of 12.5, 13.0 and 13.5 percent.
Valuation Matrix
Discount
Rate Property Value Price/SF
-------- -------------- --------
12.5% $34,015,808 $86.35
13.0% $32,992,309 $83.75
13.5% $32,011,047 $81.26
<PAGE>
LANDAUER 68
REAL ESTATE COUNSELORS
Utilizing a 13.0 percent discount rate, the estimated value is $33,000,000
(rounded). The overall rate in the first year is 10.2 percent and 10.7 percent
in year 2. The discounted reversionary value of $13,397,008 represents 40.6
percent of the final value, below 50/50 ratio preferred by many investors for a
stabilized property. However, the reversion contribution to value also suggests
that more reliance is placed in the cash flow, which is an investment assumption
confirmed by numerous investors who have purchased malls in secondary markets.
INDICATED VALUE BY THE
DISCOUNTED CASH FLOW ANALYSIS......................................$33,000,000
===========
<PAGE>
LANDAUER 69
REAL ESTATE COUNSELORS
CORRELATION AND CONCLUSION
In this report, we have utilized the Sales Comparison and Income Approaches in
estimating the Market Value of the Leased Fee Interest of the subject property.
A summary of our value estimates by each approach is as follows:
Cost Approach Not Applicable
Sales Comparison Approach $30,000,000 to $35,000,000
Income Approach $33,000,000
The reliability of the Cost Approach for the appraised property is weakened
because an investor--the most probable potential purchaser of the
property--typically is more concerned with the property's location, amenities,
and ability to generate a required cash flow than with its replacement cost. In
addition, the Cost Approach does not directly reflect the specific terms of
actual leases signed or in negotiation at the property. Therefore, we have not
used a Cost Approach in this analysis.
The Sales Comparison Approach is an appraisal technique whereby the data of
recent transactions involving similar or like properties is analyzed in order to
derive an indication of the most probable sale price of the property being
appraised. The reliability of this technique is dependent upon (a) the
availability of comparable sales data, (b) the verification of the sales data,
(c) the degree of comparability or extent of adjustment necessary for various
factors, and (d) the absence of non-typical conditions affecting the sale price.
In this instance, the significant amount of income received from the garage
operation serves to skew traditional multipliers and indications of value.
This approach is most meaningful when income properties exhibit similar income
and expense characteristics. The sales utilized in the analysis are national in
nature, but are not truly comparable because of varying economic structures of
the transactions, including lease structures, occupancy, etc. However, the
adjusted value range and the rates exhibited by the dates is useful as a check
of the reasonableness of the Income Approach.
<PAGE>
LANDAUER 70
REAL ESTATE COUNSELORS
Most significant is the Income Approach, which focuses on investors' primary
concerns about the property's potential for generating income and value
appreciation. This approach is particularly relevant when well-supported market
rent and income data are available, and when major cash flow assumptions are
supported by market-derived analysis. Because this approach closely parallels
the thinking of well-informed buyers and sellers of income-producing properties,
the present value estimate by this approach is given the most weight. Greatest
reliance is placed on the Discounted Cash Flow Analysis value estimate.
After consideration of the factors presented in this report and with greatest
consideration given to the Discounted Cash Flow Analysis of the Income Approach
in arriving at a final value, the Market Value of Westshore Mall, as of December
31, 1996, subject to existing tenant leases and the Assumptions and Limiting
Conditions stated herein, is estimated to be:
THIRTY-THREE MILLION DOLLARS
$33,000,000
<PAGE>
ADDENDA
Legal Description
Photographs of Subject Property
Recent Leases
Rent Roll
Lease Abstract Reports
Professional Qualifications
<PAGE>
LEGAL DESCRIPTION OF LAND
- --------------------------------------------------------------------------------
LAND LOCATED IN HOLLAND TOWNSHIP, OTTAWA COUNTY, STATE OF MICHIGAN
PARCEL 1: THAT PART OF THE SOUTHEAST 1/4 AND THAT PART OF THE SOUTHWEST 1/4, OF
SECTION 16, TOWN 5 NORTH, RANGE 15 WEST, DESCRIBED AS COMMENCING AT THE SOUTH
1/4 CORNER OF SAID SECTION 16; THENCE SOUTH 89 DEGREES 40 MINUTES 45 SECONDS
EAST 72.46 FEET ALONG THE SOUTH LINE OF SAID SOUTHWEST 1/4; THENCE NORTH 45
DEGREES 22 MINUTES 52 SECONDS WEST 247.59 FEET ALONG THE EASTERLY U.S. 31
HIGHWAY RIGHT-OF-WAY LINE; THENCE NORTH 17 DEGREES 39 MINUTES WEST 220.86 FEET
ALONG SAID RIGHT-OF-WAY LINE TO THE PLACE OF BEGINNING; THENCE NORTH 17 DEGREES
39 MINUTES 00 SECONDS WEST 452.63 FEET; THENCE NORTHERLY 1712.67 FEET ALONG SAID
RIGHT-OF-WAY LINE ON A 22,843.3 FOOT RADIUS CURVE TO THE RIGHT, THE LONG CHORD
BEARING NORTH 15 DEGREES 30 MINUTES 06 SECONDS WEST 1712.27 FEET; THENCE NORTH
24 DEGREES 13 MINUTES 15 SECONDS EAST 196.24 FEET ALONG SAID RIGHT-OF-WAY LINE;
THENCE SOUTH 89 DEGREES 41 MINUTES 20 SECONDS EAST 425.37 FEET ALONG THE NORTH
LINE OF SAID SOUTHWEST 1/4; THENCE SOUTH 0 DEGREES 19 MINUTES 16 SECONDS WEST
551.43 FEET; THENCE SOUTHERLY 44.33 FEET ALONG A 151.0 FOOT RADIUS CURVE TO THE
LEFT, THE LONG CHORD BEARING SOUTH 8 DEGREES 05 MINUTES 22 SECONDS EAST 44.17
FEET; THENCE SOUTH 16 DEGREES 30 MINUTES EAST 23.15 FEET; THENCE SOUTHEASTERLY
50.09 FEET ALONG A 35.0 FOOT RADIUS CURVE TO THE LEFT, THE LONG CHORD BEARING
SOUTH 57 DEGREES 30 MINUTES EAST 45.92 FEET; THENCE NORTH 81 DEGREES 30 MINUTES
EAST 39.06 FEET; THENCE EASTERLY 12.50 FEET ALONG A 313.82 FOOT RADIUS CURVE TO
THE RIGHT, THE LONG CHORD BEARNING SOUTH 87 DEGREES 30 MINUTES EAST 119.76 FEET;
THENCE SOUTH 76 DEGREES 30 MINUTES EAST 842.91 FEET; THENCE NORTH 0 DEGREES 19
MINUTES 16 SECONDS EAST 66.19 FEET; THENCE SOUTH 89 DEGREES 41 MINUTES 37
SECONDS EAST 573.96 FEET; THENCE SOUTH 0 DEGREES 19 MINUTES 16 SECONDS WEST
1441.28 FEET ALONG THE EAST LINE OF THE WEST 1/2, OF SAID SOUTHEAST 1/4; THENCE
NORTH 89 DEGREES 40 MINUTES 45 SECONDS WEST 264.0 FEET; THENCE NORTH 0 DEGREES
19 MINUTES 16 SECONDS EAST 551.43 FEET; THENCE NORTH 89 DEGREES 40 MINUTES 45
SECONDS WEST MINUTES 16 SECONDS EAST 551.43 FEET; THENCE NORTH 89 DEGREES 40
MINUTES 45 SECONDS WEST 427.0 FEET; THENCE SOUTH 45 DEGREES 19 MINUTES 15
SECONDS WEST 141.42 FEET; THENCE SOUTH
19 MINUTES 16 SECONDS WEST 884.43 FEET; THENCE NORTH 89 DEGREES 40 MINUTES 45
SECONDS WEST 326.0 FEET ALONG THE SOUTH LINE OF SAID SOUTHEAST 1/4; THENCE NORTH
0 DEGREES 19 MINUTES 16 SECONDS EAST 383.00 FEET; THENCE NORTH 89 DEGREES 40
MINUTES 45 SECONDS WEST 386.30 FEET TO THE POINT OF BEGINNING.
EXCEPT THAT PART OF THE SOUTHWEST 1/4 OF SECTION 16, TOWN 5 NORTH, RANGE 15
WEST, DESCRIBED AS COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHWEST 1/4;
THENCE NORTH 89 DEGREES 41 MINUTES 20 SECONDS WEST 365.11 FEET ALONG THE NORTH
LINE OF SAID SOUTHWEST 1/4; THENCE SOUTH 00 DEGREES 19 MINUTES 16 SECONDS WEST
397.96 FEET; THENCE NORTH 89 DEGREES 41 MINUTES 20 SECONDS WEST 50.00 FEET TO
THE POINT OF BEGINNING; THENCE NORTH 89 DEGREES 41 MINUTES 20 SECONDS WEST
310.56 FEET; THENCE NORTHERLY 225.20 FEET ALONG THE EASTERLY RIGHT-OF-WAY TO
U.S. 31 ON A 22,843.3 FOOT RADIUS CURVE TO THE RIGHT, WITH THE CHORD BEARING
NORTH 13 DEGREES 38 MINUTES 11 SECONDS WEST 225.02 FEET; THENCE NORTH 24 DEGREES
13 MINUTES 15 SECONDS EAST 13.61 FEET; THENCE SOUTH 89 DEGREES 41 MINUTES 20
SECONDS EAST 369.37 FEET; THENCE SOUTH 00 DEGREES 19 MINUTES 16 SECONDS WEST
171.00 FEET; THENCE NORTH 89 DEGREES 41 MINUTES 20 SECONDS WEST 10.00 FEET;
THENCE SOUTH 00 DEGREES 19 MINUTES 16 SECONDS WEST 60.00 FEET TO THE POINT OF
BEGINNING.
<PAGE>
LEGAL CONTINUED FROM PREVIOUS PAGE
PARCEL 2: NONEXCLUSIVE ACCESS AND PARKING EASEMENTS AS CREATED, LIMITED AND
DEFINED IN DECLARATION OF CONVENANTS AND RESTRICTIONS DATED AUGUST 23, 1987 BY
WESTSHORE MALL LIMITED PARTNERSHIP, A TEXAS LIMITED PARTNERSHIP, RECORDED
OCTOBER 20, 1987 IN LIBER 1228 ON PAGE 646. ALSO A NON-EXCLUSIVE PERPETUAL STORM
WATER DRAINAGE EASEMENT AS CREATED, LIMITED AND DEFINED IN ACCESS AND DRAINAGE
EASEMENT AGREEMENT DATED APRIL 12, 1988 AND RECORDED JUNE 26, 1988 IN LIBER 1416
ON PAGE 548. ALSO A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR ACCESS,
INGRESS, EGRESS AND REGRESS AS CREATED, LIMITED AND DEFINED IN DECLARATION AND
GRANT OF EASEMENT DATED MAY 20, 1988 AND RECORDED MAY 23, 1988 IN LIBER 1266 ON
PAGE 144. ALSO RIGHTS IN THE OPERATION AND EASEMENT AGREEMENT DATED JANUARY 25,
1989 AND RECORDED FEBRUARY 8, 1989 IN LIBER 1318 ON PAGE 1 AND FIRST AMENDMENT
TO OPERATION AND EASEMENT AGREEMENT DATED APRIL 30, 1989 AND RECORDED AUGUST 21,
1989 IN LIBER 1354 ON PAGE 863. ALSO RIGHTS IN THE DRAINAGE EASEMENT AGREEMENT
DATED MARCH 3, 1994 AND RECORDED MARCH 17, 1994 IN LIBER 1843, PAGE 35.
PARCEL 3: THAT PART OF THE WEST 1/2 OF THE SOUTHEAST 1/4 OF SECTION 16, TOWN 5
NORTH, RANGE 15 WEST, DESCRIBED AS: COMMENCING AT THE EAST 1/4 CORNER OF SAID
SECTION; THENCE NORTH 89 DEGREES 41 MINUTES 37 MINUTES 37 SECONDS WEST ALONG THE
EAST AND WEST 1/4 LINE OF SAID SECTION 2145.04 FEET; THENCE SOUTH 00 DEGREES 19
MINUTES 16 SECONDS WEST 732.06 FEET; THENCE SOUTH 13 DEGREES 30 MINUTES 00
SECONDS WEST 35.04 FEET TO THE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE
SOUTH 89 DEGREES 41 MINUTES 37 SECONDS EAST 249.06 FEET; THENCE SOUTH 00 DEGREES
19 MINUTES 16 SECONDS WEST 66.19 FEET; THENCE NORTH 76 DEGREES 30 MINUTES 00
SECONDS WEST 257.58 FEET; THENCE NORTH 13 DEGREES 30 MINUTES 00 SECONDS EAST
7.60 FEET TO THE POINT OF BEGINNING.
PARCEL 4: PART OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 COMMENCING SOUTH 89
DEGREES 41 MINUTES 37 SECONDS EAST 183.9 FEET FROM THE CENTER 1/4 CORNER, THENCE
CONTINUING SOUTH 89 DEGREES 41 MINUTES 37 SECONDS EAST 331 FEET ALONG THE EAST
AND WEST 1/4 LINE, THENCE SOUTH 0 DEGREES 19 MINUTES 16 SECONDS WEST 732.06
FEET, THENCE SOUTH 13 DEGREES 30 MINUTES WEST 43 FEET, THENCE NORTH 76 DEGREES
30 MINUTES WEST 363.6 FEET, THENCE NORTH 13 DEGREES 30 MINUTES EAST 65 FEET,
THENCE NORTH 0 DEGREES 19 MINUTES 16 SECONDS EAST 258.81 FEET, THENCE NORTH 89
DEGREES 41 MINUTES 20 SECONDS WEST 55.9 FEET, THENCE NORTH 0 DEGREES 18 MINUTES
40 SECONDS EAST 48.2 FEET, THENCE NORTH 89 DEGREES 41 MINUTES 20 SECONDS WEST 6
FEET, THENCE NORTH 0 DEGREES 18 MINUTES 40 SECONDS EAST 80.8 FEET, THENCE SOUTH
89 DEGREES 41 MINUTES 20 SECONDS EAST 6 FEET, THENCE NORTH 0 DEGREES 18 MINUTES
40 SECONDS EAST 113 FEET, THENCE SOUTH 89 DEGREES 41 MINUTES 20 SECONDS EAST
73.96 FEET, THENCE NORTH 0 DEGREES 18 MINUTES 40 SECONDS EAST 126.85 FEET TO
BEGINNING IN SECTION 16, TOWN 5 NORTH, RANGE 15 WEST
PARCEL 5: PART OF THE WEST 1/2 OF THE SOUTHEAST 1/4 COMMENCING SOUTH 89 DEGREES
41 MINUTES 37 SECONDS EAST 1329.85 FEET FROM THE CENTER 1/4 CORNER, THENCE NORTH
89 DEGREES 41 MINUTES 37 SECONDS WEST 342.33 FEET, THENCE SOUTH 0 DEGREES 19
MINUTES 16 SECONDS WEST 416.38 FEET, THENCE NORTH 89 DEGREES 41 MINUTES 37
SECONDS WEST 23.84 FEET, THENCE SOUTH 0 DEGREES 19 MINUTES 15 SECONDS WEST
350.15 FEET, THENCE SOUTH 89 DEGREES 41 MINUTES 37 SECONDS EAST TO THE EAST LINE
OF THE WEST 1/2 OF THE SOUTHEAST 1/4, THENCE NORTH ALONG SAID LINE TO BEGINNING
IN SECTION 16, TOWN 5 NORTH, RANGE 15 WEST
<PAGE>
[GRAPHIC OMITTED]
Mall Site Map
<PAGE>
<PAGE>
WESTSHORE MALL
HOLLAND, MICHIGAN
[GRAPHIC OMITTED]
TYPICAL CORRIDOR VIEW
[GRAPHIC OMITTED]
TYPICAL CORRIDOR VIEW
<PAGE>
RECENT LEASES AT WESTSHORE MALL
<TABLE>
<CAPTION>
Start Term Rental Rates/SF Average
Tenant Name Area/SF Year Years Initial Step Step Rate/SF
============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Less than 1,000 SF
Shoe Fixers 338 1996 2 $27.81 $27.81
Afterthoughts 816 1996 3 $32.59 $32.59
CPI Photo 920 1996 2 $14.50 $14.50
Cost Cutters 921 1996 5 $33.41 $33.41
Claire's 932 1994 10 $31.33 $37.55 $35.94
------ ------
Total 3,927 Average $28.85
1,000 SF to 1,999 SF
Lange's Sports 1,038 1996 5 $30.00 $33.00 $31.80
Coffee Beanery 1,039 1996 5 $26.82 $29.00 $28.13
LPC Nail/Tanning 1,236 1995 3 $14.50 $14.50
Sweets-N-Treats 1,354 1996 7 $15.04 $16.04 $17.04 $11.89
Carlson Wagonlite 1,544 1995 2 $14.50 $14.50
Splash 1,666 1995 7 $15.00 $16.00 $15.57
Bath & Body Works 1,800 1996 10 $18.00 $20.00 $19.00
Northern Reflections 1,857 1995 10 $21.00 $23.00 $25.00 $23.00
------ ------
Total 11,534 Average $19.80
2,000 SF to 5,999 SF
Bally's Aladdins Castle 2,518 1995 4 $17.87 $17.87
Amy's Hallmark 2,592 1994 10 $23.00 $22.00 $24.00 $21.40
Kinney Shoes, extend 2,716 1993 10 $14.00 $14.00
Laser Storm 2,837 1995 8 $13.08 $17.27 $15.47
NU Vision 2,869 1995 10 $14.00 $16.00 $15.00
Finish Line 3,600 1994 10 $12.00 $14.00 $13.00
Paul Harris 4,500 1994 10 $12.00 $14.00 $13.00
Musicland 4,910 1994 10 $14.00 $15.00 $14.50
Buckle 5,058 1995 10 $11.00 $13.00 $12.40
DEB 5,9ll 1994 10 $13.00 $14.00 $13.40
------ ------
Total 68,433 Average $15.82
Food Tenants
County Fair Fries 280 1996 4 $39.00 $40.00 $42.00 $39.80
Janie's Cookie Co. 883 1995 3 $31.50 $31.50
Mom's Cinnamon Rolls 661 1996 3 $45.39 $46.90 $48.51 $46.90
Wok House 900 1995 5 $23.00 $24.00 $23.40
------ ------
Total 2,724 Average $35.40
Restaurant
Elias Brothers 4,682 1993 10 $ 4.49 $ 6.00 $ 8.00 $ 6.55
J.J. Finnegan's 5,995 1989 15 $13.00 $13.00
------ ------
Total 10,677 Average $ 9.78
</TABLE>
<PAGE>
RECENT LEASES AT WESTSHORE MALL
<TABLE>
<CAPTION>
Start Term Rental Rates/SF Average
Tenant Name Area/SF Year Years Initial Step Step Rate/SF
=============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kiosk Tenants
Things Remembered 180 1995 10 $136.11 $136.11
Sunglass Hut 150 1994 5 $ 93.33 $ 93.33
Royal Jewelers 64 1996 3 $156.25 $168.75 $164.58
Golden Chain 150 1996 2 $ 96.67 $ 96.67
------ -------
Total 364 Average $122.67
Jewelry Tenants
Fox's Jewelry 1,582 1988 10 $ 25.28 $ 25.28
Kay Jewelers 1,713 1988 10 $ 22.18 $ 22.18
Page's Jewelers 1,053 1988 10 $ 31.50 $ 31.50
W. Sherman Jewelers 1,800 1995 10 $ 20.36 $ 20.36
------ -------
Total 6,148 Average $ 24.83
Plaza Tenants
Marianne Plus 8,000 1994 5 $ 8.00 $ 8.00
Children's Orchard 2,000 1994 5 $ 8.00 $ 8.00
Andrew's Home Furnishings 5,983 1996 2 $ 6.00 $ 6.00
Apple Valley 1,999 1993 5 $ 9.00 $ 9.00
Imperial Garden 3,987 1995 10 $ 8.00 $ 10.00 $ 9.00
Bo Ric's Haircare 2,577 1993 5 $ 6.25 $ 6.26
Sally Beauty 1,541 1994 5 $ 10.00 $ 10.00
------ -------
Total 26,087 Average $ 8.04
</TABLE>
<PAGE>
Westshore Mall
Rent Roll
<TABLE>
<CAPTION>
Lease Term Minimum Rent Overage Rent Tenant Sales/SF
---------- ------------ ------------ ---------------
Suite Tenant GLA Begin End Annual $/SF % BP 1995 8/95 - 7/96
- ----- ------ --- ----- --- ------ ---- - -- ---- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A1 Dollar Tree 2,235 05/04/89 12/31/99 $33,526 $15.00 6.0% N $240.60 $253.70
A2 Payless Shoesource 2,651 08/03/88 07/31/98 47,718 18.00 6.0% N 196.46 204.20
A3 Radio Shack 2,263 11/01/88 10/31/98 29,419 13.00 3.0% N 300.49 312.61
A4 Janie's Cookie Co. (R) 833 08/01/95 07/31/98 27,816 31.50 10.0% N 163.87 164.17
A5 Cost Cutters (O) 921 08/01/96 07/31/01 30,771 33.41 5.0% N 174.95 169.57
A6 Deb (O) 5,911 09/01/94 01/31/99 76,845 13.00 5.0% N 95.35 95.16
02/01/97 82,757 14.00
A7 Wok House (R) 900 01/01/95 12/31/99 20,700 23.00 7.0% N 118.80 116.28
01/01/98 21,600 24.00
A8 Trade Secret 907 08/03/88 07/31/98 25,396 28.00 6.0% N 275.26 291.16
A9 Elias Brothers Big Boy 4,682 07/21/93 07/31/03 21,000 4.49 15.0% 7,680,000 154.52 151.85
12/01/96 28,092 6.00
06/01/98 37,456 8.00
B1 J.J. Finnegan's 5,995 03/01/89 02/23/03 77,945 13.00 6.0% 1,800,000 274.56 290.85
B3 Sbarro Italian Eatery 1,770 11/01/88 10/31/00 38,000 21.47 7.0% N 300.94 310.28
B4 Lane Bryant 4,825 08/03/88 01/31/99 67,561 14.00 5.0% N 204.10 197.40
B6 Limited 4,413 08/03/88 01/31/99 63,989 14.50 5.0% N 140.04 146.64
B7 Imperial Sports 3,320 08/03/88 07/31/98 63,080 19.00 5.0% N 189.00 189.60
B8 ** VACANT ** 3,025 08/03/88 07/31/00 42,654 14.10 5.0% N 146.59 138.33
B9 Depot 3,241 08/03/88 07/31/98 51,862 16.00 5.0% N 273.09 266.74
B10 County Seat 3,535 08/03/88 01/31/99 78,300 22.15 5.0% 1,064,100 274.53 251.06
B11 Kinney Shoes (O) 2,716 08/01/93 07/31/98 38,034 14.00 5.5% N 160.42 139.52
B12 Footlocker (R) 2,607 08/01/91 07/31/01 46,623 17.88 5.5% N 323.43 331.71
B13 Afterthoughts (R) 816 08/01/96 07/31/99 26,593 32.59 8.0% N 287.34 288.00
B14 CPI Photo Finish (R) 920 08/01/96 07/31/98 13,340 14.50 6.0% N 203.02 239.42
B15 **VACANT** 1,165
B16 Minn. Sweatshirt (OFS) 2,239 09/01/97 08/31/03 26,868 12.00 7.0% N - -
09/01/00 31,346 14.00
B17 Nu Vision Optical (R) 2,869 10/01/95 09/30/05 40,166 14.00 6.0% N - -
10/01/00 45,904 16.00
C1 Laserstorm 2,837 04/01/95 04/30/02 37,113 13.08 15.0% 415,566 - 59.78
04/01/98 48,989 17.27 15.0% 489,885
C2 Babbages 1,382 06/25/92 08/31/02 35,000 25.33 5.0% N 373.89 361.27
C3 Sweets-N-Treats (R) 1,354 05/01/96 04/30/03 20,364 15.04 6.0% N 142.50 -
05/01/99 21,718 16.04
05/01/01 23,072 17.04
<CAPTION>
CAM Recovery RET Recovery
------------ ------------
Suite Tenant Exp. Denom. Floor Exp. Denom. Notes
- ----- ------ ---- ------ ----- ---- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C>
Al Dollar Tree CAM1 GLA1 - RET GLA1
A2 Payless Shoesource CAM1 GLA1 - RET GLA1
A3 Radio Shack CAM1 GLA - RET GLA
A4 Janie's Cookie Co. (R) CAM1 GLA - RET GLA
A5 Cost Cutters (O) CAM1 GLA - RET GLA
A6 Deb (O) CAM3 GLA - RET GLA 1
A7 Wok House (R) CAM1 0 - RET GLA
A8 Trade Secret CAM1 GLA - RET GLA
A9 Elias Brothers Big Boy CAM1 GLA - RET GLA 2
B1 J.J. Finnegan's CAM1 GLA - RET GLA
B3 Sbarro Italian Eatery CAM1 GLA1 - RET GLA1
B4 Lane Bryant CAM2 GLA2 - RET GLA2
B6 Limited CAM2 GLA2 - RET GLA2
B7 Imperial Sports CAM1 GLA3 - RET GLA3
B8 ** VACANT ** CAM4 GLA1 - RET GLA1 3
B9 Depot CAM1 GLA1 - RET GLA1
B10 County Seat CAM4 GLA - RET GLA
B11 Kinney Shoes (O) CAM1 GLA1 - RET GLA1
B12 Footlocker (R) CAM1 GLA1 - RET GLA1
B13 Afterthoughts(R) CAM1 GLA - RET GLA
B14 CPI Photo Finish (R) CAM1 0 - RET GLA
B15 **VACANT**
B16 Minn. Sweatshirt (OFS) CAM1 0 - RET GLA 29
B17 Nu Vision Optical (R) CAM1 0 80% RET GLA
C1 Laserstorm CAM1 0 - RET GLA 4
C2 Babbages CAM1 GLA - RET GLA 23
C3 Sweets-N-Treats (R) CAM1 0 - RET GLA
</TABLE>
<PAGE>
Westshore Mall
Rent Roll
<TABLE>
<CAPTION>
Lease Term Minimum Rent Overage Rent Tenant Sales/SF
---------- ------------ ------------ ---------------
Suite Tenant GLA Begin End Annual $/SF % BP 1995 8/95 - 7/96
- ----- ------ --- ----- --- ------ ---- - -- ---- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
C4 Amy's Hallmark Shop 2,592 07/01/94 01/31/05 49,248 19.00 6.0% N 167.49 183.27
07/01/98 57,024 22.00 7.0% N
07/01/01 62,208 24.00
C6 Claire's Boutiques 932 04/26/93 04/30/03 32,000 34.33 7.0% N 306.45 344.87
05/01/98 35,000 37.55
C7 Paul Harris 4,500 06/09/94 06/30/04 54,000 12.00 5.0% N 141.22 161.41
07/01/99 63,000 14.00
C8 Finish Line 3,600 06/01/94 05/31/04 43,200 12.00 6.0% N 241.09 250.04
06/01/99 50,400 14.00
C9 General Nutrition Center 1,706 03/01/90 02/28/00 33,272 19.50 6.0% N 211.75 209.41
03/01/97 34,979 20.50
C1O Carlson Wagonlit Travel 1,544 10/14/95 11/30/97 22,388 14.50 - - - -
D1 LPC Nail/Tanning Salon 1,236 02/15/95 02/28/98 17,922 14.50 8.0% 179,220 - 90.93
D2 Splash 1,666 03/01/95 03/31/02 24,990 15.00 5.0% N - 282.31
03/01/98 26,656 16.00
D3 W Sherman Jewelers (O) 1,800 08/01/95 07/31/98 36,655 20.36 6.0% N 351.99 149.85
D4 Northern Reflections 1,857 06/15/95 06/30/O5 38,997 21.00 5.0% N - 259.88
07/01/98 42,711 23.00
07/01/02 46,425 25.00
D5 Lady Footlocker 1,844 02/28/92 02/28/02 36,880 20.00 5.5% N 235.60 236.33
03/01/97 42,412 23.00
D6 Mom's Cinnamon Rolls (R) 661 08/01/96 07/31/01 30,000 45.39 8.0% N 217.35 215.77
08/01/98 31,000 46.90
08/01/99 32,000 48.41
D8 **VACANT** 339
D9 Buckle 5,058 03/03/95 01/31/06 55,638 11.00 5.0% N - 181.67
02/01/98 65,754 13.00
D7A County Fair Fries (R) 280 08/01/96 07/31/01 10,920 39.00 6.0% 210,000 342.44 405.51
01/01/99 11,200 40.00
01/01/00 11,760 42.00
D7B Ottawa Savings Bank (R) 36 08/01/96 07/31/01 6,660 185.00 - - - -
E1 Maurice's 5,428 05/26/90 05/31/00 86,034 15.85 5.5% N 167.81 159.15
E4 Fox's Jewelers 1,582 08/03/88 07/31/98 40,000 25.28 5.0% N 649.28 621.39
E5 Kay-Bee Toys 2,703 08/03/88 08/31/00 45,961 17.00 5.0% N 195.62 203.66
E6 Braun's 3,370 08/03/88 01/31/01 50,562 15.00 5.0% N 182.62 172.84
01/01/98 53,933 16.00
E7 Express 5,819 08/09/89 01/31/00 93,115 16.00 5.0% N 204.82 204.24
E9 Kay Jewelers 1,713 08/03/88 03/31/99 38,000 22.18 6.0% N 652.54 669.88
E1O Lerner 5,321 11/23/88 01/31/99 63,853 12.00 5.0% N 126.56 124.16
<CAPTION>
CAM Recovery RET Recovery
------------ ------------
Suite Tenant Exp. Denom. Floor Exp. Denom. Notes
- ----- ------ ---- ------ ----- ---- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C>
C4 Amy's Hallmark Shop CAM1 0 80% RET GLA
C6 Claire's Boutiques CAM1 GLA1 - RET GLA1
C7 Paul Harris CAM1 030 85% RET GLA2 5
C8 Finish Line CAM5 050 80% RET GLA 6
C9 General Nutrition Center CAM1 GLA - RET GLA
C1O Carlson Wagonlit Travel CAM1 0 - RET GLA 7
D1 LPC Nail/Tanning Salon CAM1 0 - RET GLA 8
D2 Splash CAM1 0 - RET GLA 9
D3 W Sherman Jewelers (O) CAM1 GLA - RET GLA 25
D4 Northern Reflections CAM1 0 80% RET GLA 27
D5 Lady Footlocker CAM1 GLA3 - RET GLA3
D6 Mom's Cinnamon Rolls (R) CAM1 0 - RET GLA
D8 **VACANT**
D9 Buckle CAM1 039 - RET GLA 28
D7A County Fair Fries (R) CAM1 GLA - RET GLA
D7B Ottawa Savings Bank (R) - - - - -
E1 Maurice's CAM1 GLA3 - RET GLA3
E4 Fox's Jewelers CAM1 GLA1 - RET GLA1
E5 Kay-Bee Toys CAM6 GLA4 - RET GLA4
E6 Braun's CAM1 GLA - RET GLA 24
E7 Express CAM2 GLA - RET GLA
E9 Kay Jewelers CAM1 GLA1 - RET GLA1
E1O Lerner CAM2 GLA2 - RET GLA2
</TABLE>
<PAGE>
Westshore Mall
Rent Roll
<TABLE>
<CAPTION>
Lease Term Minimum Rent Overage Rent Tenant Sales/SF
---------- ------------ ------------ ---------------
Suite Tenant GLA Begin End Annual $/SF % BP 1995 8/95 - 7/96
- ----- ------ --- ----- --- ------ ---- - -- ---- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E12 Bath & Bodyworks 1,800 04/10/96 01/31/07 32,400 18.00 5.0% N - 350.83
05/01/01 36,000 20.00
E13 Shoe Fixers (OFS) 338 08/01/96 07/31/98 9,399 27.81 10.0% N 266.76 268.27
E14 Page's Jewelers 1,053 08/03/88 12/31/98 33,170 31.50 6.0% N 325.34 336.01
F1 Coffee Beanery (R) 1,039 09/01/96 08/31/01 27,866 26.82 6.0% 300,000 183.93 201.82
09/01/98 30,131 29.00
F2 Regis Hairstylists 1,094 08/03/88 07/31/98 26,256 24.00 6.0% N 291.21 324.14
F3 Walden Books 2,699 08/03/88 07/31/98 43,195 16.00 6.0% N 356.89 369.30
F4 Musicland (R) 4,910 03/01/94 02/28/04 68,740 14.00 5.0% N 320.78 321.44
03/01/99 73,650 15.00 5.0% N
03/01/01 73,650 15.00 6.0% N
F6 Bally's Alladin's Castle (R) 2,518 01/01/96 12/31/00 45,000 17.87 20.0% N 82.12 77.04
F7 Lange's Sport (R) 1,038 02/01/96 01/31/01 31,140 30.00 6.0% 400,000 197.93 174.24
02/01/98 34,254 33.00
K1 Things Remembered (R) 180 08/01/95 07/31/97 24,500 136.11 8.0% N 689.37 748.13
K2 Royal Jewelry 96 05/01/96 04/30/99 15,000 156.25 7.0% 150,000 - 311.63
05/01/97 16,200 168.75 7.0% 162,000
K3 Sunglass Hut Intern'l 150 07/28/94 07/31/99 14,000 93.33 8.0% N 1229.33 1,171.37
K4 Golden Chain Gang (R) 150 01/01/96 12/31/97 14,500 96.67 7.0% N 590.07 548.89
---------------------------------------------
In-Line GLA
=============================================
Leased 136,266 97.4%
Unleased 6,768 2.6%
---------------------------------------------
Total 143,034 100.0%
=============================================
G1 Sears 52,515 08/03/88 08/31/03 157,545 3.00 1.5% 5,000,000 244.41 249.24
1.0% 9,000,000
H1 Younkers 69,148 08/03/88 08/31/03 224,808 3.25 2.5% 7,500,000 141.85 148.21
2.0% 9,500,000
1.5% 11,500,000
0.0% 13,500,000
I1 Steketee's 40,755 08/03/88 07/31/03 171,018 4.20 3.0% 6,235,492 84.71 82.99
J1 JC Penney 51,399 08/03/88 08/31/13 188,370 3.66 1.5% 9,418,500 - 174.74
---------------------------------------------
Total Mall GLA
=============================================
Leased 350,083 99.0%
Unleased 6,768 1.0%
---------------------------------------------
Total 356,851 100.0%
=============================================
<CAPTION>
CAM Recovery RET Recovery
------------ ------------
Suite Tenant Exp. Denom. Floor Exp. Denom. Notes
- ----- ------ ---- ------ ----- ---- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C>
E12 Bath & Bodyworks CAM2 0 80% RET GLA 10
E13 Shoe Fixers (OFS) CAM1 0 - RET GLA 26
E14 Page's Jewelers CAM1 GLA - RET GLA
F1 Coffee Beanery (R) CAM1 GLA - RET GLA
F2 Regis Hairstylists CAM1 GLA1 - RET GLA1
F3 Walden Books CAM1 GLA1 - RET GLA1
F4 Musicland (R) CAM1 0 80% RET GLA
F6 Bally's Alladin's Castle (R) CAM1 GLA1 - RET GLA1
F7 Lange's Sport (R) CAM1 0 - RET GLA 11
K1 Things Remembered (R) CAM1 GLA - RET GLA 12
K2 Royal Jewelry CAM1 0 - RET GLA
K3 Sunglass Hut Intern'l CAM1 0 - RET GLA
K4 Golden Chain Gang (R) CAM1 GLA4 - RET GLA
G1 Sears - See Lease Abstracts - 13
H1 Younkers - See Lease Abstracts -
I1 Steketee's - See Lease Abstracts - 14
J1 JC Penney - See Lease Abstracts - 15
</TABLE>
<PAGE>
Westshore Mall
Rent Roll
<TABLE>
<CAPTION>
Lease Term Minimum Rent Overage Rent Tenant Sales/SF
---------- ------------ ------------ ---------------
Suite Tenant GLA Begin End Annual $/SF % BP 1995 8/95 - 7/96
- ----- ------ --- ----- --- ------ ---- - -- ---- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
O1 Jose Babushka 8,775 07/01/90 06/30/00 130,000 14.81 6.0% 2,000,000 - -
02 First of America Bank 2,236 11/18/88 11/17/08 35,000 15.65 - - - -
11/18/98 40,000 17.89
11/18/03 45,000 20.13
M1 Bo Rics Haircare 2,577 11/26/93 11/30/98 16,106 6.25 5.0% N 71.74 72.10
M2 Sally Beauty Supply (O) 1,541 10/01/94 09/30/99 15,410 10.00 4.0% 700,000 276.94 294.44
M3 Andrews Home Furn. (R) 5,983 07/01/96 06/30/98 35,898 6.00 2.0% 700,000 93.74 104.32
M5 Children's Orchard 2,000 09/01/94 08/31/99 16,000 8.00 6.0% 300,000 73.81 78.25
M7 Marianne/Marianna Plus 8,000 11/01/94 01/31/00 64,000 8.00 4.0% N 58.60 49.06
M11 Apple Valley (R) 1,999 09/01/93 08/31/98 17,991 9.00 - - - -
M12 Imperial Garden 3,987 05/01/95 04/30/05 31,896 8.00 6.0% 800,000 - 60.92
05/01/00 39,870 10.00
---------------------------------------------
Total Owned GLA
=============================================
Leased 387,181 99.2%
Unleased 6,768 0.8%
---------------------------------------------
Total 393,949 100.0%
=============================================
<CAPTION>
CAM Recovery RET Recovery
------------ ------------
Suite Tenant Exp. Denom. Floor Exp. Denom. Notes
- ----- ------ ---- ------ ----- ---- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C>
O1 Jose Babushka - - - - - 16
02 First of America Bank CAM9 GLA4 - - - 17
M1 Bo Rics Haircare CAM7 0 - RET GLA 18
M2 Sally Beauty Supply (O) CAM8 0 - RET GLA 19
M3 Andrews Home Furn. (R) - - - - - 20
M5 Children's Orchard CAM7 0 - RET GLA
M7 Marianne/Marianna Plus CAM7 0 80% RET GLA 21
M11 Apple Valley (R) CAM7 0 - RET GLA
M12 Imperial Garden CAM7 0 - RET GLA 22
</TABLE>
Notes: (R) = Renewal; (O) = Option; (OFS) = Out For Signature;
N = Natural Breakpoint
<PAGE>
Westshore Mall
Rent Roll
<TABLE>
<CAPTION>
Lease Term Minimum Rent Overage Rent Tenant Sales/SF
---------- ------------ ------------ ---------------
Suite Tenant GLA Begin End Annual $/SF % BP 1995 8/95 - 7/96
- ----- ------ --- ----- --- ------ ---- - -- ---- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
O1 Jose Babushka 8,775 07/01/90 06/30/00 130,000 14.81 6.0% 2,000,000 - -
02 First of America Bank 2,236 11/18/88 11/17/08 35,000 15.65 - - - -
11/18/98 40,000 17.89
11/18/03 45,000 20.13
M1 Bo Rics Haircare 2,577 11/26/93 11/30/98 16,106 6.25 5.0% N 71.74 72.10
M2 Sally Beauty Supply (O) 1,541 10/01/94 09/30/99 15,410 10.00 4.0% 700,000 276.94 294.44
M3 Andrews Home Furn. (R) 5,983 07/01/96 06/30/98 35,898 6.00 2.0% 700,000 93.74 104.32
M5 Children's Orchard 2,000 09/01/94 08/31/99 16,000 8.00 6.0% 300,000 73.81 78.25
M7 Marianne/Marianna Plus 8,000 11/01/94 01/31/00 64,000 8.00 4.0% N 58.60 49.06
M11 Apple Valley (R) 1,999 09/01/93 08/31/98 17,991 9.00 - - - -
M12 Imperial Garden 3,987 05/01/95 04/30/05 31,896 8.00 6.0% 800,000 - 60.92
05/01/00 39,870 10.00
---------------------------------------------
Total Owned GLA
=============================================
Leased 390,206 99.2%
Unleased 3,743 0.8%
---------------------------------------------
Total 393,949 100.0%
=============================================
<CAPTION>
CAM Recovery RET Recovery
------------ ------------
Suite Tenant Exp. Denom. Floor Exp. Denom. Notes
- ----- ------ ---- ------ ----- ---- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C>
O1 Jose Babushka - - - - - 16
02 First of America Bank CAM9 GLA4 - - - 17
M1 Bo Rics Haircare CAM7 0 - RET GLA 18
M2 Sally Beauty Supply (O) CAM5 0 - RET GLA 19
M3 Andrews Home Furn. (R) - - - - - 20
M5 Children's Orchard CAM7 0 - RET GLA
M7 Marianne/Marianna Plus CAM7 0 80% RET GLA 21
M11 Apple Valley (R) CAM7 0 - RET GLA
M12 Imperial Garden CAM7 0 - RET GLA 22
</TABLE>
Notes: (R) = Renewal; (O) = Option; (OFS) = Out For Signature;
N = Natural Breakpoint
CAM1 Standard
CAM2 No administrative fee on insurance and water &
sewer charges
CAM3 10% administrative fee instead of 15%
CAM4 No administrative fee on insurance
CAM5 No Administrative and On-site charges
CAM6 No anchor exclusions
CAM7 Excludes enclosed mall costs
CAM8 Excludes enclosed mall costs and Administrative and
On-site charges.
CAM9 Excludes enclosed mall costs and 12% administrative
fee instead of 15%
RET Standard
O (Standard Hahn) Occupied area mall and plaza (mall only for
enclosed mall costs), excluding anchors and Mall
Tenants (tenants over 20,000 SF)
O30 Major tenants are defined as tenants over 30,000 SF
O39 Major tenants are defined as tenants over 39,000 SF
O40 Major tenants are defined as tenants over 40,000 SF
O50 Major tenants are defined as tenants over 50,000 SF
GLA (Standard Bramalea) Total gross leasable area of mall, excluding tenants
paying less than full pro-rata share (interpreted as
excluding anchors only).
GLA1 Excludes all tenants greater than 15,000 SF
GLA2 Excludes all tenants greater than 40,000 SF
GLA3 Exc1udes all tenants greater than 30,000 SF
GLA4 Anchors are not excluded
<PAGE>
<PAGE>
WESTSHORE MALL
LEASE ABSTRACT REPORT
FOR ALL TENANTS
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 1-SUITE A 1 001 1 2,235 5/89 12/99 - 15.00 33,525
DOLLAR TREE 6500
# 2-SUITE A 1 002 1 2,651 8/88 7/98 - 18.00 47,718
PAYLESS 3530
# 3-SUITE A 1 003 1 2,263 8/88 10/98 - 13.00 29,419
RADIO SHACK 5500
# 4-SUITE A 1 004 1 883 8/95 7/98 - 31.50 27,815
JANIES COOKIES 7500
# 5-SUITE A 1 005 1 921 8/96 7/01 - 33.41 30,771
COST CUTTERS 6000
# 6-SUITE A 1 006 1 5,911 8/88 1/99 - 13.00 76,843
DEB 510 2/97 14.00 82,754
# 7-SUITE A 1 007 1 900 1/95 12/99 - 23.00 20,700
WOK HOUSE 7500 1/98 24.00 21,600
# 8-SUITE A 1 008 1 907 8/88 7/98 - 28.02 25,414
TRADE SECRET 6000
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 1-SUITE A 1 001 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
DOLLAR TREE RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 2-SUITE A 1 002 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
PAYLESS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 3-SUITE A 1 003 3.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
RADIO SHACK RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 4-SUITE A 1 004 10.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
JANIES COOKIES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 5-SUITE A 1 005 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
COST CUTTERS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 6-SUITE A 1 006 5.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
DEB DEB ENCLOSED +10 ZERO
DEB EXTER CAM +10% ZERO
DEB OTHER CAM +10 ZERO
# 7-SUITE A 1 007 7.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
WOK HOUSE RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 8-SUITE A 1 008 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
TRADE SECRET RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 9-SUITE A 1 009 1 4,682 8/96 7/03 - 11.88 55,622
ELIAS BROTHERS BI 8000
# 10-SUITE B 1 001 1 5,995 3/89 2/03 - 13.00 77,935
JJ FINEGANS 8000
# 11-SUITE B 1 003 1 1,770 11/88 10/00 - 21.47 38,002
SBARRO ITALIAN EAT 7500
# 12-SUITE B 1 004 1 4,825 8/88 1/99 - 14.00 67,550
LANE BRYANT 520
# 13-SUITE B 1 006 1 4,413 8/88 1/99 - 14.50 63,989
LIMITED 510
# 14-SUITE B 1 007 1 3,320 8/88 7/98 - 19.00 63,080
IMPERIAL SPORTS 3020
# 15-SUITE B 1 008 1 3,025 7/97 6/07 - 15.00 45,375
VACANT UNIT 9900
# 16-SUITE B 1 009 1 3,241 8/88 7/98 - 16.00 51,856
DEPOT 2500
# 17-SUITE B 1 010 1 3,535 8/88 1/99 - 22.15 78,300
COUNTY SEAT 2500
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 9-SUITE A 1 009 15.00 UNLIMITED 768 RECOVERY POOL 4000 ZERO
ELIAS BROTHERS BI RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 10-SUITE B 1 001 6.00 UNLIMITED 1,800 RECOVERY POOL 4000 ZERO
JJ FINEGANS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 11-SUITE B 1 003 7.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
SBARRO ITALIAN EAT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 12-SUITE B 1 004 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
LANE BRYANT LANEB&LIMITED CAM ZERO
RECOVERY POOL 4500 ZERO
# 13-SUITE B 1 006 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
LIMITED LANEB&LIMITED CAM ZERO
# 14-SUITE B 1 007 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
IMPERIAL SPORTS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 15-SUITE B 1 008 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
VACANT UNIT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 16-SUITE B 1 009 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
DEPOT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 17-SUITE B 1 010 5.00 UNLIMITED 1,064 RECOVERY POOL 4000 ZERO
COUNTY SEAT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
</TABLE>
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 18-SUITE B 1 011 1 2,716 8/88 7/98 - 14.00 38,024
KINNEY SHOES 3530
# 19-SUITE B 1 012 1 2,607 8/88 7/01 - 17.88 46,613
FOOTLOCKER 3550
# 20-SUITE B 1 013 1 816 8/96 7/99 - 32.59 26,593
AFTERTHOUGHTS 3010
# 21-SUITE B 1 014 1 920 8/96 7/98 - 14.50 13,340
CPI PHOTO 6500
# 22-SUITE B 1 015 1 1,165 10/97 9/07 - 20.00 23,300
VACANT UNIT 9900
# 23-SUITE B 1 016 1 2,239 1/98 12/07 - 20.70 46,347
VACANT UNIT 9900
# 24-SUITE B 1 017 1 2,869 7/95 6/05 - 14.00 40,166
NU VISION OPTICAL 6000 7/00 16.00 45,904
# 25-SUITE C 1 001 1 2,837 1/95 12/01 - 10.00 28,370
LASER STORM 9000 8/97 12.5O 35,463
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 18-SUITE B 1 011 5.50 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
KINNEY SHOES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 19-SUITE B 1 012 5.50 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
FOOTLOCKER RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 20-SUITE B 1 013 8.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
AFTERTHOUGHTS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 21-SUITE B 1 014 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
CPI PHOTO RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 22-SUITE B 1 015 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
VACANT UNIT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 23-SUITE B 1 016 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
VACANT UNIT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 24-SUITE B 1 017 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
NU VISION OPTICAL RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 25-SUITE C 1 001 15.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
LASER STORM RECOVERY POOL 4000 ZERO
RECOVERY POOL 4100 ZERO
RECOVERY POOL 4S00 ZERO
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 26-SUITE C 1 002 1 1,382 7/92 8/02 - 25.33 35,006
BANDAGES 5500
# 27-SUITE C 1 003 1 1,354 8/96 4/03 - 15.04 20,364
SWEET N TREATS 8500 5/99 16.04 21,718
5/01 17.04 23,072
# 28-SUITE C 1 004 1 2,592 7/94 1/05 - 19.00 49,248
AMY'S HALLMARK SH 4500 7/98 22.00 57,024
7/01 24.00 62,208
# 29-SUITE C 1 006 1 932 5/93 4/03 - 34.33 31,996
CLAIRE'S BOUTIQUE 3010 5/98 37.55 34,997
# 30-SUITE C 1 007 1 4,500 7/93 6/04 - 12.00 54,000
PAUL HARRIS 510 7/99 14.00 63,000
# 31-SUITE C 1 008 1 3,600 6/94 5/04 - 12.00 43,200
FINISH LINE 3550 6/99 14.00 50,400
# 32-SUITE C 1 009 1 1,706 8/88 2/00 - 19.50 33,267
GNC 8500 3/97 20.50 34,973
# 33-SUITE C 1 010 1 1,544 10/95 11/97 - 14.50 22,388
CARLSON WAGONLIT 9900
# 34-SUITE D 1 001 1 1,236 2/95 2/98 - 14.50 17,922
LPC NAIL/TAN SALON 6000
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 26-SUITE C 1 002 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
BANDAGES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 27-SUITE C 1 003 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
SWEET N TREATS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 28-SUITE C 1 004 6.50 UNLIMITED 821 RECOVERY POOL 4000 ZERO
AMY'S HALLMARK SH 7/98 815 RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 29-SUITE C 1 006 7.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
CLAIRE'S BOUTIQUE RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 30-SUITE C 1 007 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
PAUL HARRIS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 31-SUITE C 1 008 6.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
FINISH LINE ENCLOSED MALL ZERO
# 32-SUITE C 1 009 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
GNC RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 33-SUITE C 1 010 NATURAL RECOVERY POOL 4000 ZERO
CARLSON WAGONLIT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 34-SUITE D 1 001 8.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
LPC NAIL/TAN SALON RECOVERY POOL 4000 ZERO
RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 35-SUITE D 1 002 1 1,666 3/95 3/02 - 15.00 24,990
SPLASH 510 4/98 16.00 26,656
# 36-SUITE D 1 003 1 1,800 8/88 7/98 - 20.36 36,648
SHERMAN JEWELERS 4000
# 37-SUITE D 1 004 1 1,857 5/95 4/05 - 21.00 38,997
NORTHERN REFLECTIO 2500 7/98 23.00 42,711
7/02 25.00 46,425
# 38-SUITE D 1 005 1 1,844 3/92 2/02 - 20.00 36,880
LADY FOOTLOCKER 3550 3/97 23.00 42,412
# 39-SUITE D 1 006 1 661 8/96 7/06 - 39.00 25,779
MOMS CINNAMON 7500 1/99 40.00 26,440
1/00 42.00 27,762
# 40-SUITE D 1 007B 1 36 8/96 7/01 - 185.00 6,660
OTTAWA SAVINGS 9200
# 41-SUITE D 1 007A 1 280 8/96 7/01 - 39.00 10,920
COUNTY FAIR FRIES 7500 1/99 40.00 11,200
1/00 42.00 11,760
# 42-SUITE D 1 008 1 339 4/98 3/08 - 36.22 12,280
VACANT UNIT 9900
# 43-SUITE D 1 010 1 5,058 3/95 1/06 - 11.00 55,638
BUCKLE 2500 2/98 13.00 65,754
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 35-SUITE D 1 002 5.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
SPLASH RECOVERY POOL 4000 ZERO
RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 36-SUITE D 1 003 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
SHERMAN JEWELERS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4600 ZERO
MALL TAX & INS. ZERO
# 37-SUITE D 1 004 5.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
NORTHERN REFLECTIO RECOVERY POOL 4000 ZERO
RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 38-SUITE D 1 005 5.50 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
LADY FOOTLOCKER RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 39-SUITE D 1 006 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
MOMS CINNAMON RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 40-SUITE D 1 007B - - - NONE
OTTAWA SAVINGS
# 41-SUITE D 1 007A 6.00 UNLIMITED 210 RECOVERY POOL 4000 ZERO
COUNTY FAIR FRIES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 42-SUITE D 1 008 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
VACANT UNIT RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 43-SUITE D 1 010 5.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
BUCKLE RECOVERY POOL 4000 ZERO
RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 44-SUITE E 1 001 1 5,428 6/90 5/00 - 15.85 86,034
MAURICES 2500
# 45-SUITE E 1 004 1 1,582 8/88 7/98 - 25.28 39,993
FOXS 4000
# 46-SUITE E 1 005 1 2,703 8/88 8/00 - 17.00 45,951
KAY BEE 6500
# 47-SUITE E 1 006 1 3,370 8/88 1/01 - 15.00 50,550
BRAUNS 510 1/98 16.00 53,920
# 48-SUITE E 1 007 1 5,819 8/88 1/00 - 16.00 93,104
EXPRESS 510
# 49-SUITE E 1 009 1 1,713 8/88 3/99 - 22.18 37,994
KAY'S 4000
# 50-SUITE E 1 010 1 5,321 8/88 1/99 - 12.00 63,852
LERNER 530
# 51-SUITE E 1 012 1 1,800 4/96 1/07 - 18.00 32,400
BATH & BOOY WORKS 6000 5/01 20.00 36,000
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 44-SUITE E 1 001 5.50 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
MAURICES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 45-SUITE E 1 004 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
FOXS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 46-SUITE E 1 005 5.00 UNLIMITED NATURAL ENLOSED MALL ZERO
KAY BEE COMMON AREA ZERO
ADMINISTRATIVE ZERO
MALL TAX & INS. ZERO
# 47-SUITE E 1 006 4.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
BRAUNS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 48-SUITE E 1 007 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
EXPRESS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 49-SUITE E 1 009 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
KAY'S RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 50-SUITE E 1 010 5.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
LERNER RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 51-SUITE E 1 012 8.00 UNLIMITED NATURAL MALL TAX & INS. ZERO
BATH & BOOY WORKS RECOVERY POOL 4000 ZERO
LANEB&LIMITED CAM ZERO
RECOVERY POOL 4500 ZERO
</TABLE>
<PAGE>
PAGE 7
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 52-SUITE E 1 013 1 338 8/96 7/98 - 27.81 9,400
SHOE FIXERS 9200
# 53-SUITE E 1 014 1 1,053 8/88 12/98 - 31.50 33,170
PAGES 4000
# 54-SUITE F 1 001 1 1,039 9/96 8/01 - 26.82 27,866
COFFEE BEANERY 8500 9/98 29.00 30,131
# 55-SUITE F 1 002 1 1,094 8/88 7/98 - 24.02 26,278
REGIS HAIR STYLIST 6000
# 56-SUITE F 1 003 1 2,699 8/88 7/98 - 16.00 43,184
WALDENBOOKS 6500
# 57-SUITE F 1 004 1 4,910 3/94 2/04 - 14.00 68,740
MUSICLAND 5500 3/99 15.00 73,650
# 58-SUITE F 1 006 1 2,518 1/96 12/00 - 17.87 44,997
BALLY'S ALADDIN'S 9000
# 59-SUITE F 1 007 1 1,038 4/96 1/01 - 30.00 31,140
LANGE'S SPORTS 6500 4/98 33.00 34,254
# 60-SUITE G 1 001 2 52,515 8/88 8/03 - 3.00 157,545
SEARS 9400
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# 52-SUITE E 1 013 10.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
SHOE FIXERS RECOVERY FOOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 53-SUITE E 1 014 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
PAGES RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 54-SUITE F 1 001 6.00 UNLIMITED 300 RECOVERY POOL 4000 ZERO
COFFEE BEANERY RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 55-SUITE F 1 002 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
REGIS HAIR STYLIST RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 56-SUITE F 1 003 6.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
WALDENBOOKS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 57-SUITE F 1 004 5.00 UNLIMITED 1,375 RECOVERY POOL 4000 ZERO
MUSICLAND 3/99 1,473 RECOVERY POOL 4100 ZERO
3/00 1,228 RECOVERY FOOL 4500 ZERO
MALL TAX & INS. ZERO
# 58-SUITE F 1 006 10.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
BALLY'S ALADDIN'S RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 59-SUITE F 1 007 6.00 UNLIMITED 400 RECOVERY POOL 4000 ZERO
LANGE'S SPORTS RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 60-SUITE G 1 001 1.50 9,000 5,000 MALL & ANCHOR TAX 506,728
SEARS 1.00 UNLIMITED
</TABLE>
<PAGE>
PAGE 8
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1-180 3.00 157,545
# 61-SUITE H 1 001 2 69,148 8/88 8/03 - 3.25 224,807
YOUNKERS 9400
1-120 3.25 224,807
# 62-SUITE I 1 001 2 40,755 12/93 7/03 - 4.20 171,171
STEKETEES 9400
1-120 4.20 171,171
# 63-SUITE J 1 001 2 51,399 8/88 8/03 - 3.70 190,140
JCPENNEY 9400
1-120 3.70 190,140
# 64-SUITE K 1 001 3 180 8/88 7/97 - 136.11 24,500
THINGS REMEMBERED 4500
# 65-SUITE K 1 004 3 150 1/96 12/97 - 96.67 14,501
GOLDEN CHAIN GANG 4000
# 66-SUITE K 1 003 3 150 8/94 7/99 - 93.33 14,000
SUNGLASS CO 6000
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1.50 9,000 5,000 MALL & ANCHOR TAX 506,728
1.00 UNLIMITED
# 61-SUITE H 1 001 2.50 9,500 7,500 MALL & ANCHOR TAX ZERO
YOUNKERS 2.00 11,500 ENCLOSED MALL
1.50 UNLIMITED COMMON AREA
2.50 9,500 7,500 ENCLOSED MALL
2.00 11,500 COMMON AREA
1.50 UNLIMITED MALL & ANCHOR TAX ZERO
# 62-SUITE I 1 001 3.00 UNLIMITED 6,273 ENCLOSED MALL
STEKETEES COMMON AREA
MALL & ANCHOR TAX ZERO
3.00 UNLIMITED 6,235 ENCLOSED MALL
COMMON AREA
MALL & ANCHOR TAX ZERO
# 63-SUITE J 1 001 1.50 UNLIMITED 9,419 ENCLOSED MALL
JCPENNEY COMMON AREA
MALL & ANCHOR TAX 506,728
1.50 UNLIMITED 9,419 ENCLOSED MALL
COMMON AREA
MALL & ANCHOR TAX 506,728
# 64-SUITE K 1 001 8.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
THINGS REMEMBERED RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 65-SUITE K 1 004 7.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
GOLDEN CHAIN GANG RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
# 66-SUITE K 1 003 8.00 UNLIMITED NATURAL RECOVERY POOL 4000 ZERO
SUNGLASS CO RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
</TABLE>
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
# 67-SUITE M 1 001 4 2,577 12/93 11/98 - 6.25 16,106
BO RICS HAIRCARE 6000
# 68-SUITE M 1 002 4 1,541 10/94 9/99 - 10.00 15,410
SALLY BEAUTY SUPPL 6000
# 69-SUITE M 1 003 4 5,983 7/96 6/98 - 3.35 20,043
ANDREWS HOME FURNI 5000
# 70-SUITE M 1 005 4 2,000 9/94 8/99 - 8.00 16,000
CHILDREN'S ORCHAR 3020
# 71-SUITE M 1 007 4 8,000 11/94 1/00 - 8.00 64,000
MARIANNE/MARIANNE 510
# 72-SUITE M 1 011 4 1,999 9/93 8/98 - 9.00 17,991
APPLE VALLEY 8500
# 73-SUITE M 1 012 4 3,987 6/95 4/05 - 8.00 31,896
IMPERIAL GARDEN 8000 6/00 10.00 39,870
# 74-SUITE L 1 605C 6 8,775 7/90 6/00 - 14.82 130,046
JOSE BABUSHKA 8000
1-60 14.82 130,046
2-60 14.82 130,046
# 75-SUITE L 1 605F 5 2,236 11/88 10/08 - 15.65 34,993
FIRST OF AMERICA 9200 11/98 17.89 40,002
11/03 20.13 45,000
1-60 22.36 49,997
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
# 67-SUITE M 1 001 5.00 UNLIMITED NATURAL RECOVERY POOL 4100 ZERO
BO RICS HAIRCARE RECOVERY POOL 4500 ZERO
PLAZA SHOPS TAX ZERO
# 68-SUITE M 1 002 4.00 UNLIMITED NATURAL PLAZA SHOPS TAX ZERO
SALLY BEAUTY SUPPL COMMON AREA ZERO
# 69-SUITE M 1 003 2.00 UNLIMITED 700 PLAZA SHOPS TAX ZERO
ANDREWS HOME FURNI
# 70-SUITE M 1 005 6.00 UNLIMITED 300 PLAZA SHOPS TAX ZERO
CHILDREN'S ORCHAR RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 71-SUITE M 1 007 4.00 UNLIMITED NATURAL PLAZA SHOPS TAX ZERO
MARIANNE/MARIANNE RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 72-SUITE M 1 011 - - - RECOVERY POOL 4100 ZERO
APPLE VALLEY RECOVERY POOL 4500 ZERO
PLAZA SHOPS TAX ZERO
# 73-SUITE M 1 012 6.00 UNLIMITED 800 PLAZA SHOPS TAX ZERO
IMPERIAL GARDEN RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
# 74-SUITE L 1 605C 6.00 UNLIMITED 2,000 JOSE BABUSHKA TAX ZERO
JOSE BABUSHKA
6.00 UNLIMITED 2,000 JOSE BABUSHKA TAX ZERO
6.00 UNLIMITED 2,000 JOSE BABUSHKA TAX ZERO
# 75-SUITE L 1 605F - - - FIRST AM BANK TAX ZERO
FIRST OF AMERICA FIRST AM BANK CAM ZERO
RECOVERY POOL 4500 ZERO
- - - FIRST AM BANK TAX ZERO
FIRST AM BANK CAM ZERO
RECOVERY POOL 4S00 ZERO
</TABLE>
<PAGE>
PAGE 10
<TABLE>
<CAPTION>
PRIMARY/ ANNUAL
SECONDARY SQUARE LEASE LEASE OPTION MINIMUM MINIMUM
TENANT CODES FEET BEGIN END #/MOS RENT/SF RENT
- ------------------- ---------- ------ ----- ----- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2-60 24.60 55,006
# 76-SUITE N 1 7 79,670 6/89 8/67 - 0.00 0
TARGET
# 77-SUITE K 1 002 3 96 5/96 4/99 - 156.75 15,048
ROYAL JEWELRY 4000 5/97 168.75 16,200
-------
473,619
=======
<CAPTION>
OVERAGE CEILING BREAKPOINT PRO RATA % OF RENT
TENANT % (000'S) (000'S) RECOVERIES SHARE BASE SUBJ TO CPI
- ------------------- ------- -------- ---------- ------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
- - - FIRST AM BANK TAX ZERO
FIRST AM BANK CAM ZERO
RECOVERY POOL 4500 ZERO
# 76-SUITE N 1 NATURAL ANCHOR CAM
TARGET
# 77-SUITE K 1 002 7.00 UNLIMITED 150 RECOVERY POOL 4000 ZERO
ROYAL JEWELRY 5/97 162 RECOVERY POOL 4100 ZERO
RECOVERY POOL 4500 ZERO
MALL TAX & INS. ZERO
</TABLE>
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
- --------------------------------------------------------------------------------
Professional Qualifications
JAMES C. KAFES, MAI, CRE
EXPERIENCE: Landauer Associates, Inc., New York, NY (since 1986)
Division Manager/Executive Managing Director in
Charge of National Valuation and Technical Services,
Member of the Management Committee, and General
Manager of the New York Valuation and Technical
Services Division. Valuation and real estate
counseling on major urban properties and portfolios,
including financial and feasibility analyses,
appraisal reviews and independent fiduciary services.
Miller & Kafes Associates, Inc. (1972-1986)
Principal. Valuations, market studies, investment
analyses and counseling services on major commercial
developments nationwide and in the Caribbean.
James E. Gibbons Associates (1970-1972)
Assistant Director. Real estate valuations and
counseling services.
National Bank of North America (1969-1970)
Chief Appraiser. Market valuations and analysis of
investment opportunities.
General Services Administration (1962-1968)
Economic analyses, highest and best use studies,
market valuations.
PROFESSIONAL
ACTIVITIES: MAI: Appraisal Institute
CRE: American Society of Real Estate Counselors
Has served on national committees of
the Appraisal Institute and ASREC
since 1971, including current service
as a board member and past service as
Editor-in-Chief and Chairman of the
Editorial Board of the Appraisal
Journal, published quarterly by the
Appraisal Institute.
Member: Board of Directors, Cedar Income Fund
Board of Directors, Realty Credit Corp.
Roundtable of Advisors, Murray H. Goodman
Center for Real Estate Studies,
Lehigh University
The Real Estate Board of New York, Inc.
CERTIFICATION: Currently certified in the Appraisal Institute's
voluntary program of continuing education for its
designated members.
EDUCATION: BS, MBA, Lehigh University
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
- --------------------------------------------------------------------------------
Professional Qualifications
JOHN I. WRZESINSKI, MAI, CRE
EXPERIENCE: Landauer Associates, Inc., Chicago, Illinois (since
1982)
Senior Managing Director, Member of the Management
Committee and General Manager of the Chicago Regional
Office. Active in general real estate consulting
since 1972 with an emphasis in the valuation and
financial analysis of income properties. Specialized
experience in the preparation of feasibility, market
and land use studies and litigation support.
Assignments involved the evaluation and valuation of
all types of real property throughout the United
States for Insurance Companies, Pension Funds,
financial institutions, developers, and industrial
corporations.
Lake Michigan Appraisal Co., Chicago, Illinois
(1977-1982)
Assistant Vice President and Secretary, (Subsidiary
of Arthur Rubloff & Co.). Co-manager of the appraisal
group; performing various market, feasibility studies
and valuations of all types throughout the United
States.
Marshall & Stevens, Chicago, Illinois (1976-1977)
Senior Appraiser. Appraisal and counseling
assignments involving real property of all types in
the Midwest principally but also in the Northeast and
West.
PROFESSIONAL
DESIGNATIONS: MAI: Appraisal Institute
CRE: American Society of Real Estate
Counselors
Member: - Appraisal Journal Board-Appraisal
Institute
- Chicago Real Estate Board
- Illinois Association of Realtors
- National Association of Realtors
- Illinois Association of Certified Real
Estate Appraisers
- International Council of Shopping Centers
- Lambda Alpha, Ely Chapter
CERTIFICATION: Currently certified in the voluntary program of
continuing education for designated members conducted
by the Appraisal Institute.
Currently State certified as a General Real Estate
Appraiser Licensed Real Estate Broker
EDUCATION: Bachelor of Science, School of Business
Southern Illinois University, Carbondale,
Illinois (1969)
Numerous professional practice and real estate
related courses offered by the Appraisal Institute.
Also, various seminars, workshops and continuing
education courses sponsored by the Appraisal
Institute and the Chicago Real Estate Board.
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
- --------------------------------------------------------------------------------
Professional Qualifications
JOHN P. BAKER, MAI
EXPERIENCE: Landauer Associates, Inc., Chicago, Illinois (Since
1994)
Director, Valuation and Technical Services Division.
Research and valuation of income-producing properties
throughout the United States. Experience includes
general real estate consulting, valuation, market
assessments, and litigation support.
Chase and Company, Denver, Colorado (1985-1993)
Appraiser. Research and appraise land and
income-producing properties.
Jefferson County, Golden, Colorado (1974-1985)
Acquisition Administrator. Negotiated the acquisition
of real estate and water rights for Jefferson
County's Open Space Program.
PROFESSIONAL
ACTIVITIES: Member, Appraisal Institute (MAI)
CERTIFICATION: Currently certified as State General Appraiser in
Illinois (License Number 153-000915) and Colorado
Certified General Appraiser (License Number
CG01313629) Licensed Real Estate Salesman, State of
Colorado
Currently certified in the voluntary program of
continuing education for designated members conducted
by the Appraisal Institute.
EDUCATION: MA Social Science/Public Administration
University of Northern Colorado, Greeley, Colorado
BS Degree - Geography/Urban Planning
Northern Michigan University, Marquette, Michigan
University of Denver, School of Law, Continuing
Education
Real Estate Practice - 1980
Water Law - 1984
University of Colorado, Boulder, Colorado
Legal Aspects of Planning (Zoning Law) - 1976
Numerous professional practice and real estate
related courses offered by the Appraisal Institute.
Also, various seminars, workshops, and continuing
education courses sponsored by the Appraisal
Institute.
<PAGE>
LANDAUER
REAL ESTATE COUNSELORS
- --------------------------------------------------------------------------------
Professional Qualifications
KEVIN D. GRAY, CRE
EXPERIENCE: Landauer Associates, Inc., New York, NY (since 1985)
Managing Director, Transaction Counseling Group
Investment sales of shopping centers and other retail
properties, as well as dispositions and acquisitions
of real estate operating entities.
Transaction-related services such as due diligence,
offering memoranda, pricing analyses and fairness
opinions.
Senior Vice President, Valuation and Technical
Services Group
Real estate consulting emphasizing strategic
planning, portfolio research, appraisals, feasibility
studies, construction financing and securities
offerings. All property types throughout North
America.
Price Waterhouse (Boston and New York) (1985)
Senior Associate. General management and real estate
consulting, incorporation of real estate investment
into overall corporate strategic goals.
PROFESSIONAL
ACTIVITIES: Member: - American Society of Real Estate
Counselors (CRE)
- International Council of Shopping
Centers (ICSC)
- National Association of Real Estate
Investment Trusts (NAREIT)
- Pension Real Estate Association (PREA)
Commissioner of Planning and Zoning (Elected Office),
Town of Darien, Connecticut, 1988-1992; 1994-1998.
Co-editor, Shopping Centers and Other Retail
Properties, John Wiley and Sons in association
with the Urban Land Institute, 512 pp., 1996.
STATE
CERTIFICATION: Licensed Salesperson, State of New York
State Certified General Appraiser in California,
Connecticut, Maryland, Massachusetts, New Jersey, New
York, Pennsylvania, Tennessee and Texas. Registered
Architect, State of Connecticut
EDUCATION: MPPM (MBA), Finance and Accounting, Yale University
M, Architecture with honors, University of
Pennsylvania (Cret Medal Recipient)
BA, Architecture with honors, University of
Pennsylvania
Languages: French, Italian, Spanish
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Howard Johnson Commack
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Commack, New York
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
November 15, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Howard Johnson Commack
Commack, New York
Ref. #9610282
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Suffolk County
area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the fee simple interest in the
subject property described in this report, as of January 1, 1997, is:
$3,200,000
THREE MILLION TWO HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Sean A. Hehir
Sean A. Hehir
Consultant and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary ........................................... 1
2. Nature of the Assignment .................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ........................... 7
4. Market Area Analysis ........................................ 20
5. Overview of External Forces Affecting the U.S.
Lodging Industry ......................................... 34
6. Lodging Market Supply and Demand Analysis ................... 50
7. Projection of Occupancy and Average Rate .................... 65
8. Highest and Best Use ........................................ 79
9. Approaches to Value ......................................... 81
10. Income Capitalization Approach .............................. 84
11. Sales Comparison Approach ................................... 118
12. Cost Approach ............................................... 126
13. Reconciliation of Value Indications ......................... 132
14. Statement of Assumptions and Limiting Conditions ............ 136
15. Certification ............................................... 139
Addenda
Photographs of the Subject Property
Photographs of the Competitors
Legal Description
Synopsis of Hotel Management Agreement
Synopsis of Restaurant Lease
Explanation of the Simultaneous Valuation Formula
Qualifications
Sean A. Hehir
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Howard Johnson Commack
Location: 450 Moreland Road
Commack, New York 11725
Date of Inspection: October 21, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
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Area: +/-4.13 acres, or +/-179,903 square feet
Zoning: WSI - Wholesale and Service Industrial
District
Assessor's Parcel Number: Section 180, Block 1, Lot 44
Improvements Description
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Age: Constructed in 1971
Property Type: Limited-service
Guestrooms: 109
Number of Stories: Two stories
Food and Beverage Service: Complimentary continental breakfast
Meeting Space: Two rooms totaling 800 square feet
Parking: Approximately 110 spaces
Summary of Value Parameters
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Highest and Best Use (as if vacant): Lodging facility
Highest and Best Use (as improved): Lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Two
Stabilized Year: 1998
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Valuation Assumptions
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Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22.0%
Terminal Capitalization Rate: 12.0%
Brokerage and Legal Fees: 3%
Holding Period: Ten years
Calculated Discount Rate: 14.42%
Estimates of Value
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Income Capitalization Approach: $3,140,000
Sales Comparison Approach: $2,630,000 - $3,700,000
Cost Approach (Replacement Cost): $5,800,000
Market Value Conclusion: $3,200,000
Market Value Conclusion per Room: $29,358
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-179,903-square-foot ( +/-4.13 -acre) parcel improved with a 109-room,
limited-service lodging facility known as the Howard Johnson Commack, which
opened in 1971. In addition to guestrooms, the subject property features a
gatehouse where the registration area is located, +/-800 square feet of meeting
space, an outdoor swimming pool, an area where complimentary continental
breakfast is served, and all other facilities and amenities typical of a
limited-service hotel. The hotel is located on the west side of Moreland Road,
approximately 100 feet north of its intersection with Vanderbilt Motor Parkway.
Municipal jurisdictions governing the property include the Hamlet of Commack,
the Town of Smithtown, Suffolk County, and the State of New York. The hotel's
civic address is 450 Moreland Road, Commack, New York, 11725.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Commack
area for the purpose of estimating the market value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under
conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what
they consider their own best interests;
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HVS International, Mineola, New York Nature of the Assignment 4
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3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for the use of Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels
(including the subject property) which are owned by Ashford Financial
Corporation or related entities. The information presented in this report should
not be disseminated to the public or third parties without the express written
consent of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation. Unless noted
otherwise, we have inspected the competitive lodging facilities and analyzed the
sales summarized in this report, and our value conclusion is based on this
investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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HVS International, Mineola, New York Nature of the Assignment 5
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(1) Hotels,
Motels and Restaurants: Valuations and Market Studies,(2) The Computerized
Income Approach to Hotel/Motel Market Studies and Valuations,(3) and Hotels and
Motels: A Guide to Market Analysis, Investment Analysis, and Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this document.
According to records maintained by the Smithtown Tax Assessor's Office, the
subject property was formerly owned by Knight & Associates, Inc. On February 28,
1994, the Chartwell/G.S.R. Hotels III Limited Partnership entered into a
purchase agreement with the Nippon Credit Bank, Ltd., which provided the
mortgage loan to the subject property and 14 other hotels. The closing of the
sale of the mortgage loan took place on March 25, 1994, and the purchase price
allocated to the subject property was $2,218,895.
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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Conveyance of the fee simple title to the hotel occurred on or about August 25,
1994.
The subject property operates under a franchise agreement with Howard Johnson
Franchise Systems, Inc.; this agreement expires on August 25, 2009. The hotel is
also subject to a management agreement with Remington Hotel Company, an abstract
of which is presented in the Addenda to this report. For the purpose of this
appraisal, we assume continued ownership of the subject property by Ashford
Financial Corporation and operation of the property by Remington Hotel Company
as a Howard Johnson.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Sean A. Hehir and Anne R. Lloyd-Jones on
October 21, 1996.
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HVS International, Mineola, New York Description of the Land, Improvements, 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located on the west side of Moreland Road, approximately 100
feet north of its intersection with the Vanderbilt Motor Parkway. Municipal
jurisdictions governing the property include the Hamlet of Commack, the Town of
Smithtown, Suffolk County, and the State of New York.
According to the subject property's 1995/96 real estate tax bill and
representatives of the Smithtown Tax Assessor's Office, the parcel measures
approximately 4.13 acres, or +/-179,903 square feet. For tax purposes, the
property is identified as District 800, Section 180, Block 1, Lot 44. The hotel
is located on Moreland Road, north of the Long Island Expressway and the
Vanderbilt Motor Parkway (which roughly parallels the expressway). A Mobil gas
station and the Happy Family Chinese Buffet restaurant are located along the
south side of the Howard Johnson.
The Vanderbilt Motor Parkway extends on an east/west axis just south of the gas
station and the restaurant. Moreland Road, which is also known as Wicks Road, is
located at the property's east end, and carries traffic north and south. A
vacant parcel and the Suffolk County Girl Scout Council are located along the
hotel's northern periphery. Commercial developments and a mini-storage warehouse
known as SYMS are situated on the west side of the parcel. Primary vehicular
access to the Howard Johnson is provided by Moreland Road. The parcel is
generally flat, and its size and topography appear well suited for the current
use.
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HVS International, Mineola, New York Description of the Land, Improvements, 8
Zoning, Taxes, and Neighborhood
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Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purposes of this appraisal, we assume
that the property is not encumbered by any unusual or onerous easements which
would affect its use or marketability.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is conveniently accessible to a variety of local, county, state, and interstate
highways.
The Howard Johnson Commack is located near the center of Long Island. The island
stretches east for roughly 188 miles from Manhattan to Montauk Point, but is
only 25 miles wide at its widest point. Development has followed a west-to-east
pattern. Long Island is served by three major east-west highways: the Long
Island Expressway, Northern State Parkway, and Southern State Parkway. The Long
Island Expressway (LIE) is the only east-west commercial highway serving almost
the entire length of the island, and is a key component of the transportation
system in Nassau and Suffolk Counties. Both the Northern and Southern State
Parkways are characterized by low overpasses that render them impassable to
large commercial vehicles.
The Long Island Expressway is paralleled by two-lane service roads on its
northern and southern sides throughout most of Queens and Nassau County; the
service roads are only partially constructed throughout Suffolk County. The
availability of a service road in the vicinity of the Howard Johnson affords the
site improved access, and thus represents a locational advantage.
Although the area's highway system is well developed, it is overtaxed as a
result of the large population base and the extent of the area's commercial
activity. Most travel on Long Island takes place on an east-west axis, and as a
result, the LIE and the Northern and Southern State Parkways are often congested
during peak periods. Although this traffic congestion is inconvenient, it is
also pervasive, and thus does not represent a competitive disadvantage for any
one area hotel.
Sagtikos State Parkway, Sunken Meadow State Parkway, and Northern State Parkway
all pass within a one- to two-mile radius of the subject property, and provide
convenient access to local demand generators and other points of interest.
Sagtikos State Parkway originates in Commack,
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HVS International, Mineola, New York Description of the Land, Improvements, 9
Zoning, Taxes, and Neighborhood
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approximately 800 feet west of the subject property, and extends south to the
coast. North of Commack, this route becomes the Sunken Meadow State Parkway, and
extends to the north shore.
Northern State Parkway is a four-lane, limited-access route. This highway
originates at Veterans Memorial Highway (State Route 454) approximately one and
one-half miles northeast of the Howard Johnson, and continues west through
western Suffolk and Nassau Counties. Northern State Parkway becomes the Grand
Central Parkway at the Nassau/Queens border, and terminates at the Triborough
Bridge (which provides access to Manhattan and Interstate 95). Overall, regional
access to the Howard Johnson Commack is excellent.
Local Access and Visibility
Local access to the subject property is provided by Moreland Road, a two-lane,
undivided thoroughfare that intersects the Vanderbilt Motor Parkway and the Long
Island Expressway. South of the Vanderbilt Parkway, Moreland Road becomes Wicks
Road.
Access to the hotel from the Long Island Expressway is convenient. Westbound
motorists use Exit 53 and make a left turn onto the Vanderbilt Motor Parkway,
then continue west for roughly one-eighth of a mile before turning right at the
subject property. Eastbound motorists also use Exit 53 and turn left on Wicks
Road (which becomes Moreland Road), continue under the LIE and the Vanderbilt
Motor Parkway, and turn left into the Howard Johnson.
Although visibility of the subject property from the LIE is limited, this is not
considered a serious detriment. Like most of the area's hotels, the Howard
Johnson does not attract a substantial amount of demand from passing motorists.
All destinations on Long Island can be reached within one or two hours, and thus
highway traffic does not produce a significant number of hotel guests.
As noted earlier, the Howard Johnson is located near the intersection of the
Vanderbilt Motor Parkway and Moreland Road. The hotel is set back behind a Mobil
station and the Happy Family Chinese Buffet restaurant, and these structures
obscure the view of the property. This factor is mitigated somewhat by the
Howard Johnson's distinctive orange roof and a tall sign installed in front of
the property.
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Overall, the subject site is considered appropriate for hotel use in terms of
capacity, configuration, and access. The property is well situated with regard
to various demand generators, although visibility is limited.
Airport Access
Long Island is served by three major airports: John F. Kennedy, La Guardia, and
MacArthur. Guests of the subject property can reach John F. Kennedy Airport by
taking the LIE west to the southbound Belt Parkway. Motorists gain access to La
Guardia by traveling west on the LIE and then north on the Brooklyn-Queens
Expressway.
The subject property is located within an approximate 20-minute drive of Long
Island MacArthur Airport in Ronkonkoma. This regional air facility is served by
American, USAir, and several commuter carriers. MacArthur's popularity has
increased in recent years as more businesses have moved to Suffolk County and
congestion at the New York City airports has intensified. Most of the passengers
who use MacArthur Airport are local residents or commercial travelers visiting
firms in Suffolk County.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-1 Available Utilities
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Utility Provider
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Water Suffolk Water Authority
Electricity LILCO
Telephone NYNEX
Sewer Suffolk Water Authority
Garbage and Trash Hickeys
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Soil and Subsoil Conditions
According to the November 24, 1993 Preliminary Environmental Site Assessment and
Limited Asbestos Survey prepared by Certified Engineering & Testing Company,
Inc., the subject site is located approximately 2,000 feet southeast of a State
Hazardous Waste Site (SHWS): Gibson Oil and Chemical at 74 Mall Drive. Moreover,
Kay Pneumatics, a fuel oil Leaking Underground Storage site (LUST) with a
"clean-up in progress/required" status, is located approximately 2,000 feet west
of the subject property and is hydraulically upgradient from the site. Gibson
Oil and Chemical and Fairchild Industrial Production Division (at 76 Mall Drive)
are classified as Comprehensive Environmental Resource Compensation and
Liability
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Information System (CERCLIS) sites, and are both hydraulically upgradient from
the subject parcel.
Because the subject property's proximity to these sites may raise environmental
concerns, the Certified Engineering & Testing Company report recommends a Phase
II environmental study. The appraisers are not qualified to evaluate soil
conditions, and we urge concerned parties to engage qualified personnel to
pursue the issue. This appraisal does not consider the potential impact of
environmental problems, and it should be noted that the cost of remediation and
the loss in value caused by the site's decreased desirability are extremely
difficult to quantify.
Nuisances and Hazards
The same Certified Engineering & Testing Company report cited above indicates
that friable asbestos has been identified in corrugated air-cell pipe insulation
in the first-floor corridor and electrical room of the subject property's east
wing (with an estimated total length of 250 feet) and in sprayed acoustical
ceiling material in all guestrooms (an estimated area of 25,120 square feet).
The reader should be advised that any costs associated with asbestos removal or
containment could have an unfavorable impact on the hotel's market value, and
the estimate set forth in this appraisal reflects our value conclusions prior to
the deduction of any such costs. We suggest that interested parties initiate an
independent analysis regarding current asbestos levels and the capital
expenditures necessary to remove any asbestos that is present.
Excess Land
The 4.13-acre parcel includes a vacant tract that is situated on the northern
side of the hotel improvements. The property's manager indicates that the
cesspool is buried in this area, and unless alternate sewage treatment
arrangements can be made, this portion of the site will remain vacant and
dedicated to this use. Moreover, as a result of the significant expenditures
that would be necessary to remove the cesspool, its seems unlikely that this
land would be used for an expansion of the hotel facilities.
Flood Zone
As indicated by the Federal Emergency Management Agency (FEMA) Community Panel
Number 3608-1000-15B, dated June 2, 1992, the subject property is located in
Flood Zone C, an area of minimal flooding.
Seismicity
At the time of our analysis, information on the seismicity of the subject
property was not available. For the purpose of this appraisal, we assume that
the hotel is not located in an area of seismic danger.
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Land Conclusion
The subject parcel appears well suited as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and noted the following advantages and disadvantages.
Advantages
o There is a well-developed network of local and regional highways in close
proximity to the subject property, and access is favorable.
o In terms of shape and topography, the parcel appears suitable for its
current use.
o All necessary utilities are available.
Disadvantages
o The site is not visible from the Long Island Expressway.
o The subject property is situated behind a Mobil gas station and the Happy
Family Chinese Buffet restaurant, limiting visibility from Vanderbilt
Motor Parkway.
The disadvantages noted above are surmountable through marketing and improved
signage, and the advantages represent desirable locational attributes. As a
result, we believe that the subject property is well suited for hotel use.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by management representatives.
The Howard Johnson Commack is a limited-service lodging facility containing 109
rentable units, +/-800 square feet of meeting space, an outdoor swimming pool,
and typical back-of-the-house areas. The two-story property opened in 1971, and
operates under a management contract with Remington Hotel Company and a
franchise affiliation with Howard Johnson Franchise System, Inc. Overall, the
hotel appears to be in good condition, and management representatives report
that all building systems are in working
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order. The following table summarizes the facilities available at the Howard
Johnson.
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Table 3-2 Facilities Summary
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Guestrooms (No. of Units)
Standard Queen 43
King Jacuzzi 16
Double Jacuzzi 33
Queen Jacuzzi 10
King Island Oval 5
Manager's Room 2
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Total 109
Meeting Space
Two rooms totaling approximately 800 square feet
Parking
Approximately 110 surface spaces
Life Safety Systems
Hard-wired smoke detectors
Laundry Equipment
Two washers
Four dryers
Construction Details
Five buildings
Exterior facade of beige stucco with teal railing
Concrete masonry blocks
Rubber membrane roof
Interior guestroom corridors
Carpeting in the guestrooms and corridors and tile
floor covering in the baths
Vinyl covering on the interior walls
Note: two meeting rooms contain
pull-down parlor beds and can be converted to guestrooms
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Property Exterior
The hotel consists of five buildings configured in a "U"-shape around a central
courtyard; these structures occupy the northern, eastern, and western portions
of the site. Paved parking areas accommodating approximately 110 vehicles are
located around the perimeter of the improvements. The north and west guestroom
buildings were constructed in 1971 and the east wing
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was added in 1976. An additional structure located in the northwestern corner of
the parcel houses a laundry room and a mechanic's room.
As noted earlier, the subject property benefits from convenient vehicular access
from the LIE. Westbound motorists use Exit 53 and make a left turn onto the
Vanderbilt Motor Parkway, then continue west for roughly one-eighth of a mile
before turning right at the hotel. Eastbound motorists also use Exit 53 and turn
left on Wicks Road (which becomes Moreland Road), continue under the LIE and
Vanderbilt Motor Parkway overpasses, and turn left into the Howard Johnson.
After entering the site, guests proceed to the hotel's main entrance, which is
housed in a traditional Howard Johnson gatehouse constructed of brick and glass
gatehouse; this facility is situated in the southeastern portion of the parcel.
We note that the property exterior and the paved areas appear to be in good
condition, with no apparent signs of disrepair.
Lobby
The front desk, the lobby, and a manager's office are in the gatehouse
structure. The lobby is attractively furnished with plants, a coffee table,
chairs, and some lamps. A public telephone and a public restroom are located to
the right of the reception desk. Management representatives indicate that the
ceiling and the wall vinyl in the lobby will be replaced in the near future.
Meeting and Banquet Space
Complimentary continental breakfast is served in a solarium that connects the
north and east guestroom wings. Two small meeting rooms totaling approximately
800 square feet are available; both of these facilities are equipped with
pull-down beds, and thus they can be used as guestrooms. We were informed by
management that there are plans to convert a room that is now used for storage
into a meeting room in the near future. This should enhance the ability to
market the hotel to small groups.
Guestrooms
Guestrooms are of standard configuration and size. In addition to one or two
beds, each unit is equipped with bedside tables, lamps, two chairs, a writing
desk, a dresser, draperies with black-out lining and sheers, and a color
television. Bathrooms, which are finished with tile floors, contain a commode, a
tub/shower combination, and a freestanding sink. Thermasol Jacuzzi Steambaths
are installed in 65 guestrooms.
Recent guestroom renovations included the replacement of beds, bedspreads, and
carpets in 19 units and the installation of new vanities in all guest bathrooms.
Floor tiles were also replaced in 53 of the bathrooms, and
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the remainder will be addressed in the near future. Walls in 15 guestrooms were
resurfaced with stucco-style wall covering recently. Another 50 units will
receive the same treatment in 1997, and the remainder are scheduled for
completion in 1998.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with relatively new carpets,
which were replaced as part of a previous renovation. Corridor lighting is
sufficient and the fixtures appear to be good condition; we note that the
lighting style complements the updated finishes in the hallways.
Management has set aside 60 units for non-smoking guests; this type of amenity
costs very little and requires no structural changes. We expect that the number
of rooms allocated for this purpose will be increased or reduced depending on
demand and guest response.
Recreational Amenities
An outdoor swimming pool is situated in the "U" formed by the hotel buildings.
Access to the pool is provided by a door leading off the breakfast solarium,
southwest of the reception area. The swimming pool is fenced in, as required by
local ordinances. A new pool filter was installed recently, and management
representatives indicate that the paving around the perimeter of the pool will
be repainted in the near future.
Back-of-the-House Space
Back-of-the-house facilities include a laundry room, a mechanical equipment
room, and various offices and storage areas. The laundry and the mechanical
equipment room are located in the northwestern corner of the building. The
laundry room is equipped with two washers and four dryers. These machines appear
dated, and may need to be replaced sometime in the near future.
Vertical Transportation
Vertical transportation is provided by four stairwells, located at each end of
the east and west guestroom wings. All of the stairwells appear to be well
maintained.
Heating, Ventilation, and Air Conditioning
The subject property guestrooms are cooled by in-room through-the-wall air
conditioners that are reported to be in good working order. Public areas are
cooled by ten package air conditioning units; hence, the property does not
require chillers. Heat is provided by two boilers. According to information
provided by Ashford Financial Corporation, all of the Howard Johnson's operating
systems are in a condition appropriate to ensure the hotel's continued
operation.
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Fire Protection
It is our understanding that the subject property is in full compliance with all
applicable fire safety standards. All guestrooms are equipped with heat
detectors and hard-wired smoke alarms, and pull stations and fire extinguishers
are located at various points throughout the buildings. The hotel's fire alarm
is wired to the front desk and to the fire department.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Improvements Conclusion
Except as noted above, the subject property's improvements are considered
appropriate for hotel use in terms of capacity and configuration. The facilities
appear to be in good condition, and the guestrooms are appropriately furnished.
For the purpose of this appraisal, we assume that the subject property's
management will continue to perform necessary renovations, and that these will
be funded from the reserve for replacement account.
ZONING
According to the Smithtown Planning Department's zoning map (dated September 30,
1989), the subject property is zoned as follows.
WSI - Wholesale and Service Industrial District
Based on our discussions with representatives of the Smithtown Planning
Department and our review of the zoning ordinances pertaining to this
classification, hotel and motels are a "special exception" use and are subject
to approval by the Town Board. We assume that all necessary permits and
approvals have been secured (including an appropriate liquor license), and that
the subject property was constructed in accordance with local zoning ordinances,
building codes, and all other applicable regulations.
ASSESSED VALUE AND TAXES
Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties of
equal market value will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property
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taxes can be based on the value of the real property or the value of the
personal property and the real property.
According to the Town of Smithtown Tax Assessor's Office, the subject parcel is
designated as District 800, Section 180, Block 1, Lot 44. The hotel is subject
to taxation by the Town of Smithtown and Suffolk County, and also incurs school
taxes and miscellaneous other taxes. Personal property is not assessed in these
jurisdictions. The tax year extends from December 1 to November 30, and taxes
are payable on January 10 of the prior year and May 15 of the current year.
The subject property is currently assessed at $97,705, which includes a land
assessment of $12,500. According to representatives of the Smithtown Tax
Assessor's Office, the hotel's total 1992/93 assessment was $108,705. As a
result of the property's recent change in ownership, its tax file is currently
in circulation and details of the assessment change are not available to us.
Commercial real estate in the subject property's area is not reassessed unless
there is a substantial upgrading or expansion, or unless court proceedings
require a reassessment. As a result, property assessments generally remain
constant, and the equalization ratio fluctuates from year to year. In 1996, the
equalization ratio applicable to the subject property is reported to be
approximately 3.2% of market value. According to data supplied by the Smithtown
Tax Assessor's Office, equalization rates ranged from 2.70% to 3.39% between
1990 and 1996. The 1995/96 tax rate applicable to the subject property is
$924.787 per $1,000 of assessed value.
The overall tax rate (including all applicable taxing jurisdictions) has
increased at an average annual compounded rate of approximately 4.35% since
1990/91. To forecast the subject property's tax burden, we have increased the
historical tax rate by 4.5% to yield a tax rate of $966.402 per $1,000 of
assessed value in the first projection year, and then increased that rate by
4.5% annually in subsequent years. Applying the projected increases to the 1996
tax burden yields the following forecast of property taxes for the Howard
Johnson.
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Table 3-3 Forecast of Property Tax Expense (+000)
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1997 Stabilized
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Projected Property Taxes (+000) $94 $99
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, and overall profitability.
The neighborhood surrounding the Howard Johnson is characterized by a mixture of
light industrial, office, and residential uses. A majority of the hotel's demand
is generated by firms operating in the John V.N. Klein Hauppauge Industrial
Park, which is located northeast of the subject site. Land uses along the
Vanderbilt Motor Parkway include a variety of Class A office buildings. A number
of freestanding restaurants are located in the immediate vicinity of the Howard
Johnson (including the Happy Family Chinese Buffet, McDonald's, Bennigan's,
Lotus East, and Villa Parma), and provide guests with dining alternatives to
suit different tastes and budgets.
Residential developments are located off the Vanderbilt Motor Parkway, east and
west of the subject property. The 211-room Sheraton Long Island is situated on
the north side of Vanderbilt Motor Parkway, approximately one mile west of the
subject property. The Suffolk County Girl Scout Council is located on the north
side of the adjoining vacant parcel.
Adjoining the subject parcel to the west are SYMS, Liberty Aero Inc., and the
Picture Frame Factory. As noted earlier, a Mobil gas station is situated
directly south of the hotel, and the Happy Family Chinese Buffet restaurant is
located southwest of the hotel and west of the Mobil station.
Other land uses in the immediate vicinity include a manufacturing firm known as
FESTO, which is situated northeast of the hotel. A vacant, wooded parcel is
located to the east of the Howard Johnson, and various manufacturing and
industrial companies are situated in the areas to the north and east. Some
residential developments are located west of the SYMS facility.
Overall, the neighborhood surrounding the Howard Johnson Commack appears well
suited for the operation of a lodging facility. The Hauppauge Industrial Park
and other nearby commercial developments provide a base level of hotel demand.
As a limited-service property, the Howard Johnson does not offer a restaurant;
however, the Happy Family Chinese Buffet and numerous freestanding food and
beverage outlets that line the Vanderbilt
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Motor Parkway provide guests with appropriate dining alternatives. The subject
property's proximity to the Long Island Expressway and the Vanderbilt Motor
Parkway also allows convenient access to nearby demand generators.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property is located on Long Island, in the southeastern portion of
New York State. The hotel is situated in the Hamlet of Commack and the Town of
Smithtown, and its primary market consists of Suffolk County and the
Nassau-Suffolk Metropolitan Statistical Area (MSA). The Howard Johnson is
located in central Suffolk County, which includes the municipalities of
Hauppauge, Smithtown, and Central Islip, as well as the area surrounding
MacArthur Airport.
Long Island is approximately 188 miles long and 25 miles across at its widest
point; at roughly 1,396 square miles in area, it is the largest island adjoining
the continental United States. The island is bounded by the Atlantic Ocean to
the south and east, the Long Island Sound to the north, and the East River and
the Upper New York Bay to the west. The area developed from a sparsely populated
agricultural region in the 18th Century to a major suburban metropolitan center.
The character of Long Island changes markedly from urban to suburban to rural
over its length. The Queens and Brooklyn boroughs of New York City occupy the
western end of the island; Nassau and Suffolk Counties comprise the middle and
eastern portions. In the popular sense, Long
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[GRAPHIC OMITTED]
AREA MAP
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Island refers only to Nassau and Suffolk Counties, which cover roughly 929
square miles and contain 67% of the island's total land mass.
Nassau and Suffolk Counties' proximity to New York City has been the primary
factor in the development of Long Island. New York City, which consists of five
boroughs, is the most densely populated city in the United States and serves as
a global center for trade, commerce, and industry. New York and its surrounding
suburbs are the central hub of a megalopolis that extends along the eastern
seaboard from Boston to Philadelphia, Baltimore, and Washington, DC.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
Population
Between 1980 and 1995, the population of Suffolk County increased at an average
annual compounded rate of 0.3%, which was lower than the national gain of 1.0%
annually but higher than the levels registered by the MSA and the state (at 0.1%
and 0.2%, respectively). Population growth accelerated between 1990 and 1995;
during this period, Suffolk County's population increased at a rate of 0.5%,
while the MSA, the state, and the nation recorded annual gains of 0.3%, 0.2%,
and 1.1%, respectively. Forecasts indicate slower gains between 1995 and 2000.
Suffolk County is expected to achieve an average annual compounded population
increase of 0.3% during this period; no change is anticipated in the MSA, and
growth rates in the state and the nation are projected at 0.1% and 0.9%,
respectively. The higher growth rate anticipated for Suffolk County reflects its
relatively low population density, particularly when compared to Nassau County.
Although there is no direct relationship between population and hotel demand, we
find that the rate of population growth generally establishes a
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minimum rate of increase for an area's commercial segment lodging demand. This
observation also holds true for the meeting and group segment if a majority of
the meetings are business-oriented.
Retail Sales
Retail sales in Suffolk County increased at a real average annual compounded
rate of 2.1% between 1980 and 1995, a level that was higher than those
registered by the Nassau-Suffolk MSA (at 1.6%), New York State (at 1.1%), and
the nation as a whole (at 1.9%). In response to the regional and national
recession, retail sales levels declined in the county and the MSA between 1990
and 1995.
Forecasts suggest retail sales growth of 0.3% annually in Suffolk County between
1995 and the year 2000. This level exceeds the 0.1% gain anticipated in New York
State, but is lower than the increase projected for the nation; no change is
anticipated in the MSA. Again, the greater opportunity for development in
Suffolk County is a contributing factor. Overall, retail sales statistics for
the subject property's market area suggest a favorable economic profile. With
greater retail growth, local businesses should prosper and new firms are more
likely to enter the market. This trend should result in greater visitation and
an increased demand for lodging facilities.
Personal Income
Between 1980 and 1995, personal income growth in Suffolk County outpaced the
levels recorded in the Nassau-Suffolk MSA and the state and was comparable to
the national average. As a result of the economic downturn, growth slowed
between 1990 and 1995. Suffolk County and the nation fared somewhat better than
the MSA and the state during this period, and achieved increases of 0.8% and
1.9%, respectively. Projections indicate continued economic recovery between
1995 and the year 2000, and gains in personal income are anticipated at average
annual compounded rates of 2.3% in Suffolk County, 1.7% in the Nassau-Suffolk
MSA, 1.3% in New York State, and 2.3% in the nation.
On a per-capita basis, personal income levels in Suffolk County and the
Nassau-Suffolk MSA are higher than those in the state and the nation. This
suggests that Long Island residents are more affluent than typical Americans,
and have more money available to spend on retail goods and services. This
increased spending ability contributes to a favorable environment for local
commercial establishments, and restaurants in particular. It should be noted,
however, that personal income figures do not consider cost-of-living factors,
which are particularly high on Long Island.
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Employment
Between 1980 and 1995, the most rapid employment growth in the county occurred
in the services and construction sectors, reflecting the considerable
development that occurred in the area during that period. Most employment
sectors underwent declines from 1990 to 1995; the exceptions were agricultural
services, TCPU (transportation, communications, and public utilities), services,
and wholesale trade. The greatest drops were apparent in the farming,
construction, manufacturing, and federal government sectors; more limited
defense spending on a nation level and the region's historical reliance on
defense contracts are largely responsible for the downturn in manufacturing and
federal government employment on Long Island. During this recessionary period,
overall employment increased at an average annual compounded rate of 0.1% in
Suffolk County.
Employment is expected to rebound between 1995 and the end of the decade.
Forecasts indicate an average annual compounded growth rate of 1.1% in Suffolk
County, and relatively healthy gains are expected to occur in all areas (with
the exception of farming and agricultural services). The moderate employment
gains anticipated in the area reflect a stabilization of the local economy
following the dramatic expansion that occurred in the 1980s and the recession
that characterized the early 1990s.
The major employers on Long Island represent a cross section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in research and
development. Although this diversification may not maximize the area's lodging
demand, it does tend to stabilize the local economy during its various cycles.
The following table outlines some of the major employers on Long Island.
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Table 4-1 Major Employers
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Number of
Firm Product Employees
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Diocese of Rockville Center Religious Institution 12,500
North Shore Health System Medical Care 11,002
Waldbaum's Supermarket 6,500
Long Island Rail Road Transportation 6,068
Long Island Lighting Company Electricity/Gas 5,947
Long Island Jewish Medical Center Medical Care 5,880
Northrop Grumman Aerospace Manufacturers 5,000
Chemical Banking Financial Institution 4,500
King Kullen Supermarket 4,500
NYNEX Communications 4,500
Pathmark Supermarket 4,500
Chase Manhattan Financial Institution 4,000
Macy's East Merchandising 4,000
Newsday Daily Newspaper 4,000
Winthrop University Hospital Medical Care 3,350
Brookhaven National Lab Research and Development 3,200
United Parcel Service Delivery Service 3,200
Source: Long Island Almanac 1996
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As illustrated in the preceding table, Northrop Grumman, a major defense
contractor, is currently the area's seventh-largest employer. In the late 1980s
and early 1990s, Grumman was the largest firm on Long Island, employing more
than 19,000 people. Cutbacks have occurred since that time as a result of the
end of the Cold War and pressures to reduce the federal deficit. It is difficult
to quantify the number of jobs lost at the small supply and distribution
companies that relied on Grumman for a majority of their business. In early
March, 1994, the Martin Marietta Corporation of Bethesda, Maryland, announced
that it would purchase Grumman for approximately $55 per share of stock. Within
the week, Northrop, which is based in Los Angeles, indicated that it would
better Martin Marietta's offer and would pay approximately $60 per share.
Grumman did not solicit a takeover bid from Northrop, preferring instead to be
bought by Martin Marietta. However, Martin Marietta would not raise its offer of
$55 a share. Northrop eventually raised its final offer to $62, and officially
acquired Grumman on April 15, 1994. Reports indicate that the existing Grumman
facilities will remain on Long Island, and current employment levels are
believed to be stable. However, future changes in defense spending could affect
this employment sector.
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Office Space
Office space in Suffolk County is concentrated primarily along the Route 110
corridor in Melville and along Veterans Memorial Highway and Motor Parkway in
Hauppauge. Other areas of Suffolk County with a relatively high concentration of
office space include Commack and Smithtown. Most of the companies that occupy
office space in Suffolk County are local firms or branch offices of regional and
national organizations. There was more office development on Long Island in the
1980s than in all other decades combined.
Cushman and Wakefield divides the Suffolk County office market into the western
and central districts; the subject property is located in central Suffolk, which
recorded a year-end 1995 inventory of 3,034,503 square feet. The countywide
office supply was estimated at 7,936,890 square feet at the end of 1994, and the
Long Island total was 26,039,938 square feet. The office space vacancy rate for
Long Island stood at 15.9% at the end of 1995, and Suffolk County registered a
vacancy rate of 16.3%. Office space totaling approximately 36,000 square feet is
under construction in Suffolk County, which is the first new development of this
type in either Suffolk or Nassau County since 1992.
Industrial Space
The Hauppauge area contains Long Island's greatest concentration of industrial
space. The following table outlines the ten largest industrial parks in Nassau
and Suffolk Counties.
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Table 4-2 Major Long Island Industrial Parks
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Square
Park Name Town County Footage Acreage
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Heartland Executive Park Hauppauge Suffolk 4,000,000 242
Crossways/Gateways Woodbury Nassau 3,025,000 217
Marcus Blvd. Hauppauge Nassau 1,800,000 150
Heartland Business Center Edgewood Suffolk 1,640,000 301
Racanelli Industrial Park Hauppauge Suffolk 1,600,000 140
Vanderbilt Industril Park Hauppauge Suffolk 1,470,000 100
Freeport Industrial Park Freeport Nassau 1,454,000 44
Airport International Plaza Bohemia Suffolk 1,400,000 200
Price Parkway Farmingdale Nassau 1,360,000 70
MacArthur Centers I & II Ronkonkoma Suffolk 1,250,000 91
Source: 1996 Long Island Almanac
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Highway Traffic
The amount of traffic passing through a market area can have a direct impact on
commercial and leisure demand and an indirect effect on meeting and group
demand. The subject property occupies a prominent location adjacent to the Long
Island Expressway and Vanderbilt Motor Parkway. Representatives of the New York
State Department of Transportation indicate that traffic counts on exits of the
Long Island Expressway are not maintained every year, but are taken only when
requested. The most recent traffic count at Exit 53, near the subject property,
was taken in 1989. At that time, eastbound traffic between Vanderbilt Motor
Parkway and Wicks Road totaled 78,218, and westbound traffic count was recorded
at 77,802 vehicles. On the stretch between the Sagtikos State Parkway and Wicks
Road, at Exit 53, eastbound traffic was 72,290 and westbound traffic was 68,700.
Because these statistics are somewhat dated, they have been given minimal weight
in our analysis.
Airport Traffic
Airport passenger counts are important indicators of lodging demand. Depending
on the type and location of a particular airfield, a sizable percentage of
arriving passengers may have need for hotel accommodations. Trends showing
changes in passenger counts also reflect local business activity and the overall
economic health of the area.
The subject property is located within an approximate 20-minute drive of Long
Island MacArthur Airport in Ronkonkoma. This regional air facility is served by
American, USAir, and several commuter carriers. MacArthur's popularity has
increased in recent years as more businesses have moved to Suffolk County and
congestion at the New York City airports has intensified. Most of the passengers
who use MacArthur Airport are local residents or commercial travelers visiting
firms in Suffolk County. The following table illustrates historical passenger
activity trends at this facility.
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Table 4-3 Total Passenger Activity - Long Island MacArthur Airport
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Commuter Percent Major Percent Total Percent
Year Airlines Change Air Carriers Change Activity Change
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1985 137,122 --- 696,029 --- 833,151 ---
1986 102,594 (25.2)% 849,073 22.0 % 951,667 14.2%
1987 186,949 82.2 1,009,329 18.9 1,196,278 25.7
1988 179,521 (4.0) 1,040,858 3.1 1,220,379 2.0
1989 205,072 14.2 883,338 (15.1) 1,088,410 (10.8)
1990 330,074 61.0 838,821 (5.0) 1,168,895 7.4
1991 331,479 0.4 859,426 2.5 1,190,905 1.9
1992 411,478 24.1 790,755 (8.0) 1,202,233 1.0
1993 374,550 (9.0) 797,130 0.8 1,171,680 (2.5)
1994 350,576 (6.4) 886,750 11.2 1,237,326 5.6
Avg. Annual
Comp. Change,
1985-1994 11.0 % 2.7 % 4.5
1990-1994 1.5 1.4 1.4
Source: Long Island MacArthur Airport
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Leisure Travel
Although beaches and other attractions are available in the subject property's
area, leisure travel does not contribute a large percentage of local hotel
demand. Most leisure travel to Long Island consists of day trips rather than
overnight stays, and the areas that do attract a significant amount of
leisure-oriented lodging demand are located on the eastern tip of the island.
Tourist attractions on Long Island include the Animal Farm, which offers a
petting farm and pony rides; the Brookhaven National Laboratory, which features
an exhibit center and science museum; the Cold Spring Harbor Fish Hatchery; the
Fire Island Lighthouse; the Hamptons, a seaside resort community; local wineries
such as Hargrave Vineyards, where tours and wine tastings are available; the
children's zoo at the Long Island Game Farm; Sagamore Hill, the former home of
Theodore Roosevelt; and the Shrine of Our Lady of the Island, a religious
sanctuary. Numerous state and county parks are located across the island, and
many offer swimming and ice skating. Golf is available at 113 private and public
courses, there are bicycle trails in numerous locations, and camping, boating,
and fishing are popular recreational activities. Small game hunting is permitted
in season.
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Conclusion
Our review of various economic and demographic data indicates that the local
economy experienced strong growth during the early to mid-1980s, which became
more moderate later in the decade. Projections indicate that an economic
recovery is underway, but the market is approaching a point of stabilization.
Although these trends suggest that local lodging demand will not increase as
dramatically as it did during the 1980s, slight gains are anticipated.
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change.
<PAGE>
HVS International, Mineola, New York Market Area Analysis 29
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Suffolk County 1980-1995 1,285.7 1,352.8 0.3 %
Nassau-Suffolk MSA 1980-1995 2,606.8 2,652.7 0.1
New York-North New Jersey-Long Island CMSA 1980-1995 18,844.2 19,725.4 0.3
State of New York 1980-1995 17,566.4 18,195.7 0.2
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Suffolk County 1990-1995 1,322.6 1,352.8 0.5
Nassau-Suffolk MSA 1990-1995 2,608.7 2,652.7 0.3
New York-North New Jersey-Long Island CMSA 1990-1995 19,470.4 19,725.4 0.3
State of New York 1990-1995 18,002.3 18,195.7 0.2
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Suffolk County 1995-2000 1,352.8 1,370.1 0.3
Nassau-Suffolk MSA 1995-2000 2,652.7 2,657.2 0.0
New York-North New Jersey-Long Island CMSA 1995-2000 19,725.4 19,827.7 0.1
State of New York 1995-2000 18,195.7 18,314.7 0.1
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Suffolk County 1980-1995 7,258.8 9,878.1 2.1
Nassau-Suffolk MSA 1980-1995 17,537.0 22,328.1 1.6
New York-North New Jersey-Long Island CMSA 1980-1995 105,476.9 127,771.9 1.3
State of New York 1980-1995 91,865.8 108,055.2 1.1
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Suffolk County 1990-1995 9,277.6 9,878.1 1.3
Nassau-Suffolk MSA 1990-1995 20,977.4 22,328.1 1.3
New York-North New Jersey-Long Island CMSA 1990-1995 120,093.1 127,771.9 1.2
State of New York 1990-1995 101,720.0 108,055.2 1.2
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Suffolk County 1995-2000 9,878.1 10,005.7 0.3
Nassau-Suffolk MSA 1995-2000 22,328.1 22,334.3 0.0
New York-North New Jersey-Long Island CMSA 1995-2000 127,771.9 128,377.0 0.1
State of New York 1995-2000 108,055.2 108,691.5 0.1
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales per Capita
Suffolk County 1980-1995 5,645.7 7,301.9 1.7
Nassau-Suffolk MSA 1980-1995 6,727.4 8,417.1 1.5
New York-North New Jersey-Long Island CMSA 1980-1995 5,597.3 6,477.5 1.0
State of New York 1980-1995 5,229.6 5,938.5 0.9
United States 1980-1995 5,900.6 6,719.5 0.9
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 30
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================================================================================
Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Retail Sales per Capita
Suffolk County 1990-1995 7,014.7 7,301.9 0.8 %
Nassau-Suffolk MSA 1990-1995 8,041.4 8,417.1 0.9
New York-North New Jersey-Long Island CMSA 1990-1995 6,168.0 6,477.5 1.0
State of New York 1990-1995 5,650.4 5,938.5 1.0
United States 1990-1995 6,244.5 6,719.5 1.5
Projected Retail Sales per Capita
Suffolk County 1995-2000 7,301.9 7,302.7 0.0
Nassau-Suffolk MSA 1995-2000 8,417.1 8,405.2 (0.0)
New York-North New Jersey-Long Island CMSA 1995-2000 6,477.5 6,474.6 (0.0)
State of New York 1995-2000 5,938.5 5,934.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
Suffolk County 1980-1995 549.1 828.2 2.8
Nassau-Suffolk MSA 1980-1995 1,362.0 1,821.9 2.0
New York-North New Jersey-Long Island CMSA 1980-1995 10,199.7 13,183.6 1.7
State of New York 1980-1995 9,199.4 11,882.1 1.7
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
Suffolk County 1990-1995 725.6 828.2 2.7
Nassau-Suffolk MSA 1990-1995 1,676.7 1,821.9 1.7
New York-North New Jersey-Long Island CMSA 1990-1995 12,105.4 13,183.6 1.7
State of New York 1990-1995 10,874.1 11,882.1 1.8
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Suffolk County 1995-2000 828.2 868.6 1.0
Nassau-Suffolk MSA 1995-2000 1,821.9 1,866.8 0.5
New York-North New Jersey-Long Island CMSA 1995-2000 13,183.6 13,497.4 0.5
State of New York 1995-2000 11,882.1 12,228.3 0.6
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales per Capita
Suffolk County 1980-1995 427.1 612.2 2.4
Nassau-Suffolk MSA 1980-1995 522.5 686.8 1.8
New York-North New Jersey-Long Island CMSA 1980-1995 541.3 668.4 1.4
State of New York 1980-1995 523.7 653.0 1.5
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales per Capita
Suffolk County 1990-1995 548.6 612.2 2.2
Nassau-Suffolk MSA 1990-1995 642.7 686.8 1.3
New York-North New Jersey-Long Island CMSA 1990-1995 621.7 668.4 1.5
State of New York 1990-1995 604.0 653.0 1.6
United States 1990-1995 646.3 704.1 1.7
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 31
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================================================================================
Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Eating and Drinking Place Sales per Capita
Suffolk County 1995-2000 612.2 633.9 0.7 %
Nassau-Suffolk MSA 1995-2000 686.8 702.6 0.5
New York-North New Jersey-Long Island CMSA 1995-2000 668.4 680.7 0.4
State of New York 1995-2000 653.0 667.7 0.4
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Suffolk County 1980-1995 19,196.0 26,820.4 2.3
Nassau-Suffolk MSA 1980-1995 46,050.4 61,056.6 1.9
New York-North New Jersey-Long Island CMSA 1980-1995 316,226.9 439,766.7 2.2
State of New York 1980-1995 268,310.1 358,297.4 1.9
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
Short-Term Historical Personal Income (+000,000)
Suffolk County 1990-1995 25,737.0 26,820.4 0.8
Nassau-Suffolk MSA 1990-1995 60,694.9 61,056.6 0.1
New York-North New Jersey-Long Island CMSA 1990-1995 427,531.9 439,766.7 0.6
State of New York 1990-1995 349,724.3 358,297.4 0.5
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Suffolk County 1995-2000 26,820.4 30,003.8 2.3
Nassau-Suffolk MSA 1995-2000 61,056.6 66,527.7 1.7
New York-North New Jersey-Long Island CMSA 1995-2000 439,766.7 472,116.9 1.4
State of New York 1995-2000 358,297.4 382,633.9 1.3
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Suffolk County 1980-1995 14,930.0 19,826.0 1.9
Nassau-Suffolk MSA 1980-1995 17,666.0 23,017.0 1.8
New York-North New Jersey-Long Island CMSA 1980-1995 16,781.0 22,294.0 1.9
State of New York 1980-1995 15,274.0 19,691.0 1.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Suffolk County 1990-1995 19,459.0 19,826.0 0.4
Nassau-Suffolk MSA 1990-1995 23,267.0 23,017.0 (0.2)
New York-North New Jersey-Long Island CMSA 1990-1995 21,958.0 22,294.0 0.3
State of New York 1990-1995 19,427.0 19,691.0 0.3
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Suffolk County 1995-2000 19,826.0 21,898.0 2.0
Nassau-Suffolk MSA 1995-2000 23,017.0 25,037.0 1.7
New York-North New Jersey-Long Island CMSA 1995-2000 22,294.0 23,811.0 1.3
State of New York 1995-2000 19,691.0 20,892.0 1.2
United States 1995-2000 16,908.0 18,097.0 1.4
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 32
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Employment - Suffolk County (+000)
Farming 1980-1995 3.4 2.3 (2.6)%
Agricultural Services 1980-1995 6.2 7.3 1.0
Mining 1980-1995 0.6 0.3 (4.9)
Construction 1980-1995 21.8 36.2 3.4
Manufacturing 1980-1995 84.3 74.6 (0.8)
Transportation, Communications, & Public Utilities 1980-1995 20.4 26.6 1.8
Total Trade 1980-1995 104.8 143.2 2.1
Wholesale 1980-1995 24.5 39.1 3.2
Retail 1980-1995 80.2 104.1 1.7
Finance, Insurance, & Real Estate 1980-1995 37.4 47.3 1.6
Services 1980-1995 104.1 199.3 4.4
Total Government 1980-1995 98.3 99.1 0.1
Federal Civilian 1980-1995 11.2 10.9 (0.2)
Federal Military 1980-1995 4.0 3.9 (0.2)
State & Local 1980-1995 83.1 84.3 0.1
Total 1980-1995 481.2 636.2 1.9
Short-Term Historical Employment - Suffolk County (+000)
Farming 1990-1995 2.3 2.3 (0.1)
Agricultural Services 1990-1995 6.9 7.3 1.0
Mining 1990-1995 0.3 0.3 (4.0)
Construction 1990-1995 39.4 36.2 (1.6)
Manufacturing 1990-1995 87.2 74.6 (3.1)
Transportation, Communications, & Public Utilities 1990-1995 25.5 26.6 0.9
Total Trade 1990-1995 142.8 143.2 0.1
Wholesale 1990-1995 36.4 39.1 1.5
Retail 1990-1995 106.4 104.1 (0.4)
Finance, Insurance, & Real Estate 1990-1995 47.9 47.3 (0.2)
Services 1990-1995 176.3 199.3 2.5
Total Government 1990-1995 103.9 99.1 (0.9)
Federal Civilian 1990-1995 11.9 10.9 (1.8)
Federal Military 1990-1995 4.4 3.9 (2.5)
State & Local 1990-1995 87.6 84.3 (0.8)
Total 1990-1995 632.5 636.2 0.1
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Market Area Analysis 33
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================================================================================
Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Employment - Suffolk County (+000)
Farming 1995-2000 2.3 2.1 (1.1)%
Agricultural Services 1995-2000 7.3 6.9 (1.0)
Mining 1995-2000 0.3 0.3 0.4
Construction 1995-2000 36.2 37.3 0.6
Manufacturing 1995-2000 74.6 77.0 0.6
Transportation, Communications, & Public Utilities 1995-2000 26.6 28.0 1.0
Total Trade 1995-2000 143.2 150.3 1.0
Wholesale 1995-2000 39.1 45.0 2.8
Retail 1995-2000 104.1 105.4 0.2
Finance, Insurance, & Real Estate 1995-2000 47.3 50.8 1.4
Services 1995-2000 199.3 215.5 1.6
Total Government 1995-2000 99.1 102.1 0.6
Federal Civilian 1995-2000 10.9 11.2 0.6
Federal Military 1995-2000 3.9 3.9 0.2
State & Local 1995-2000 84.3 87.0 0.6
Total 1995-2000 636.2 670.4 1.1
</TABLE>
- --------------------------------------------------------------------------------
In later sections of this economic study and appraisal, we will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect changes in room night demand in the subject
property's area.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 34
Affecting the U.S. Lodging Industry
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================================================================================
5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 35
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
<PAGE>
HVS International, Mineola, New York Overview of External Forces 36
Affecting the U.S. Lodging Industry
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
<PAGE>
HVS International, Mineola, New York Overview of External Forces 37
Affecting the U.S. Lodging Industry
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 38
Affecting the U.S. Lodging Industry
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 39
Affecting the U.S. Lodging Industry
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of Transactions 52 41 40 83
Number of Rooms 15,806 17,219 15,825 30,452
Total Price $1,375,122,000 $1,084,797,000 $1,171,050,000 $2,314,352,000
Average Price Per Room $ 87,000 $ 63,000 $ 74,000 $ 76,000
</TABLE>
Source: Hospitality Valuation Services
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Overview of External Forces 40
Affecting the U.S. Lodging Industry
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International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 41
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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HVS International, Mineola, New York Overview of External Forces 42
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================================================================================
Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- --------------------------------------------------------------------------------
1973 4.2 % 6.2 % 70.2 %
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 4.8 2.6 64.7
1995 4.8 2.8 65.5
1996 5.0 3.0 66.0
1997 5.5 3.5 67.0
1998 6.0 4.0 68.0
1999 5.5 4.0 68.0
Source: Smith Travel Research & Hospitality Valuation Services
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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HVS International, Mineola, New York Overview of External Forces 43
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
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HVS International, Mineola, New York Overview of External Forces 44
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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HVS International, Mineola, New York Overview of External Forces 45
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Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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HVS International, Mineola, New York Overview of External Forces 46
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Table 5-4 Percent Change in the Hotel Valuation Index
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Percent Change
---------------------
'86-'87 '87-'88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 '93-'94 '94-'95 '86-'95
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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HVS International, Mineola, New York Overview of External Forces 47
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
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HVS International, Mineola, New York Overview of External Forces 48
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is a good indication that hotel values will return to record levels in the
next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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HVS International, Mineola, New York Overview of External Forces 49
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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HVS International, Mineola, New York Lodging Market Supply and Demand 50
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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HVS International, Mineola, New York Lodging Market Supply and Demand 51
Analysis
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Table 6-1 Historical Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 870 870 870 870 870 870 870
Annual Guestroom Supply 317,550 317,550 317,550 317,550 317,550 317,550 317,550
Percent Change -- 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Room Night Demand 215,616 204,502 200,057 216,887 207,043 223,873 226,096
Percent Change -- (5.2)% (2.2)% 8.4 % (4.5)% 8.1 % 1.0 %
Occupancy 67.9 % 64.4 % 63.0 % 68.3 % 65.2 % 70.5 % 71.2 %
Percent Change -- (5.2)% (2.2)% 8.4 % (4.5)% 8.1 % 1.0 %
Average Rate $83.34 $76.57 $68.19 $67.53 $68.11 $72.46 $76.46
Percent Change -- (8.1)% (10.9)% (1.0)% 0.9 % 6.4 % 5.5 %
RevPAR $56.59 $49.31 $42.96 $46.12 $44.41 $51.08 $54.44
Percent Change -- (12.9)% (12.9)% 7.4 % (3.7)% 15.0 % 6.6 %
</TABLE>
Year-to-Date August Average Annual
----------------------- Comp. Change,
1995 1996 1989 - 1995
- --------------------------------------------------------------------
Number of Rooms 870 866
Annual Guestroom Supply 211,410 211,410
Percent Change --- 0.0 % 0.0 %
Room Night Demand 149,890 153,061
Percent Change --- 2.1 % 0.8 %
Occupancy 70.9 % 72.4 %
Percent Change --- 2.1 % 0.8 %
Average Rate $76.20 $80.20
Percent Change --- 5.2 % -1.4 %
RevPAR $54.03 $58.06
Percent Change --- 7.5 % -0.6 %
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Lodging Market Supply and Demand 52
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
As the preceding table indicates, the competitive supply has remained stable
since 1989. Demand fluctuated during this period, declining by 5.2% in 1990 and
2.2% in 1991; these downturns can be attributed to the regional impact of the
national recession and, in 1991, the Persian Gulf War. A substantial increase of
8.4% occurred in 1992, as the economic outlook began to brighten and the area
recovered from the impact of the war. This was followed by a 4.5% decrease in
1993 and an 8.1% gain in 1994. These latter trends are largely attributable to
an extensive renovation of one of the secondary competitors (the Holiday Inn -
MacArthur Airport), which took some rooms out of service during 1993.
Year-to-date August figures indicate a 2.1% demand increase from 1995 to 1996.
This is partially the result of the TWA airplane crash that occurred off the
coast of Long Island in July of 1996. All of the hotels in the subject
property's market experienced an increase in demand resulting from the influx of
government officials and media representatives involved in the investigation of
the crash. The Sheraton Long Island, which is located in the subject property's
immediate vicinity, was the base of operations for the National Transportation
Safety Board and the FBI, and the site of numerous press conferences. Overall,
room night demand increased at an average annual compounded rate of 0.8% between
1989 and 1995, indicating a relatively stable market.
As a result of the overall economic downturn and cutbacks and layoffs at many
Long Island firms, the average rate of the competitive properties declined by a
substantial 8.1% in 1990, and by another 10.9% in 1991. The most significant
employment reductions took place at Grumman, and this company's decline had
ripple effects on a vast number of other firms that had relied on its economic
contribution. In 1992, the drop in average rate slowed to 1.0%. A slight
increase of 0.9% was registered in 1993, followed by a more significant gain of
6.4% in 1994. The 1994 jump accompanied a strong rise in occupancy, and reflects
the more aggressive rate strategy pursued by area hotel operators as demand
increased. This trend continued in
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 53
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1995, when the market achieved a 5.5% increase in average rate while maintaining
an overall occupancy of 71.2%. Year-to-date August figures show a further 5.2%
rise in average rate from 1995 to 1996; as in the case of the occupancy
increase, a substantial portion of this gain can be attributed to the TWA crash,
which allowed area hotels to charge above-average room rates to government
officials and members of the media. Despite the strong increases achieved in the
recent years, we note that by 1995, the marketwide e average rate had recovered
only to 1990 levels, and remained substantially below the 1989 average of
$83.34. Overall, rate declined at an average annual compounded rate of 1.4%
between 1989 and 1995.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in Suffolk County
is generated primarily by the following three market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the year-end 1996 distribution of accommodated hotel room
night demand as follows.
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HVS International, Mineola, New York Lodging Market Supply and Demand 54
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Table 6-2 Estimated Year-End 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
--------------------------- --------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 97,000 66 % 14,000 61 %
Meeting and Group 20,000 14 2,000 9
Leisure 29,000 20 7,000 30
- --------------------------------------------------------------------------------
Total 146,000 100 % 23,000 100 %
- --------------------------------------------------------------------------------
Commercial demand predominates in the local market, accounting for approximately
66% of the 1996 room night demand. Leisure travelers show a relatively strong
presence, at approximately 20% of the market, and meeting and group demand
contributes the remaining 14%. The subject property's market segmentation
differs from that of the area as a whole, largely as a result of its limited
function space. Moreover, the Howard Johnson accommodates a larger percentage of
leisure travelers than the market as a whole, and maintains a somewhat weaker
presence in the commercial segment. The property's appeal to leisure travelers
is at least partly the result of its Howard Johnson affiliation. Using the
distribution of accommodated hotel demand as a starting point, we will analyze
the characteristics of each market segment in an effort to determine future
trends in room night demand.
Commercial Segment
The commercial segment consists of individual businesspeople who are visiting
various firms in the subject property's market, including local manufacturers,
service-related firms, and light industrial facilities. Because the Howard
Johnson is located at the southwestern corner of the Hauppauge Industrial Park
and near the Vanderbilt Industrial Park, the Heartland Executive Park, and the
Racanelli Industrial Park, a solid base of commercial demand is available.
However, management reports limited success in securing this business, partly as
a result of its somewhat poor reputation in the area and its Howard Johnson
affiliation, which is not particularly popular among commercial travelers.
Commercial demand is strongest Monday through Thursday nights, declines
significantly on Friday and Saturday, and increases somewhat on Sunday. The
typical length of stay ranges from one to three days, and the
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rate of double occupancy is a low 1.2 to 1.3 people per room. Commercial demand
is relatively constant throughout the year, although some declines are
noticeable in late December and during other holiday periods. In general,
commercial travelers are not overly rate-sensitive, and will make use of a
hotel's food and beverage outlets and recreational facilities. The commercial
segment represents a highly desirable and lucrative market that provides a
consistent level of demand at relatively high room rates.
Demand potential in this segment is tied to the business and economic health of
the surrounding area; although the Long Island economy exhibited a moderately
favorable growth trend during the past decade, forecasts indicate a considerable
slowing in the 1990s. We generally find a multiplier effect between employment
growth in certain sectors and the increase in commercial lodging demand (i.e.,
one new FIRE employee will correspond to more than one new visitor). In
conjunction with the recent trend of slower growth in the local economy,
commercial demand increases have become more moderate. As the national and
international economy improves and prominent local businesses increase their
production and employment levels, commercial hotel demand is expected to rebound
quickly. Smith Travel Research estimates that total hotel demand in the
competitive market rose by 1.0% in 1995. We project that commercial demand
(which comprises more than 66% of the total market) will increase by 2% in 1997
and 1998 and 1% annually in subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group demand in western Suffolk County is generated primarily by
local businesses, and includes small functions such as training sessions,
product announcements, meetings, and seminars with between 15 and 20 attendees.
Non-commercial groups such as civic associations and professional societies,
which often range from 75 to 250 people, are a
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secondary demand source. Most of the meeting and group functions in western
Suffolk County are held at local hotels. Because the subject property is a
limited-service facility that offers only 800 square feet of meeting space, its
participation in this segment is limited.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus growth
in this segment tends to lag slightly behind increases in commercial demand.
Historically, meeting and group demand in the Suffolk County market is estimated
to have increased at a rate lower than the overall demand increase in the
market. Given this factor and the relevant economic and demographic trends
summarized earlier in this report, we forecast meeting and group demand in the
subject property's market to increase by 1% in 1997 and 1998 and at 0.5%
annually throughout the remainder of the projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. Leisure demand in the subject property's
market is generated by people traveling on the Long Island Expressway to
locations farther east on Long Island and individuals
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visiting Suffolk County's various attractions, including the area's beaches and
wineries.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections.
Although traffic counts in the vicinity of the subject property are dated and
thus do not form a solid base from which to formulate projections, Suffolk
County residents enjoy relatively high disposable income levels. It should be
noted, however, that the Howard Johnson is located in a commercial-oriented
neighborhood that offers few leisure attractions. Based on our analysis of
economic and demographic trends in the area, we project leisure demand to
increase at an average annual compounded rate of 1%.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
1997 1998 Thereafter
- --------------------------------------------------------------------------------
Commercial 2.0% 2.0% 1.0%
Meeting and Group 1.0 1.0 0.5
Leisure 1.0 1.0 1.0
Annual Average 1.7% 1.7% 0.9%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The Long Island area is
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served by numerous hotels and motels, which are located throughout the region.
Unlike many other suburban market areas, these properties are not concentrated
in clusters, but are spread throughout the area, generally near the major
highways serving Long Island.
We have identified two hotels that are considered primarily competitive with the
Howard Johnson. Including the subject property, these primary competitors total
374 rooms. Two additional lodging facilities are judged to be only secondarily
competitive; although the facilities, rate structures, or market orientations of
these hotels prevent their inclusion among the primarily competitive supply,
they do compete with the subject property to some extent. The room count of each
secondary competitor has been weighted to reflect the degree to which it
competes with the Howard Johnson; the aggregate weighted room count of the
secondary competitors is 178.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
estimated year-end 1996 penetration factors; penetration is the ratio between a
specific hotel's operating results and the corresponding data for the market. If
the penetration factor is greater than 100%, the property is performing better
than the market as a whole; conversely, if the penetration is less than 100%,
the hotel is performing at a level below the marketwide average.
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================================================================================
Table 6-4 Primary Competitors and Aggregate Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Square Footage Estimated 1996
--------------------- Market Segmentation Estimated 1995
Meeting ----------------------- ---------------------------
Year Number Meeting Space Mtg. & Average
Property/Location Opened of Rooms Space per Room Comm. Group Leisure Occ. Rate RevPAR
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Properrty
450 Moreland Rd., Commack 1971 109 800 7 60% 10% 30% 58.1% $61.34 $35.64
Hampton Inn - Commack
680 Commack Rd., Commack 1989 144 400 3 70 10 20 83.0 75.00 62.25
Hampton Inn - Islandia
1600 Vets. Highway, Islandia 1988 121 384 3 70 10 20 75.0 75.00 56.25
- ----------------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 374 528 4 68% 10% 22% 73.2% $71.84 $52.55
Secondary Competitors 178 63 22 15 70.0 81.44 57.00
- ----------------------------------------------------------------------------------------------------------------------------------
Totals and Averages 552 66% 14% 20% 72.3% $74.85 $54.09
<CAPTION>
Estimated 1996
----------------------------------------------------------
Average Occupancy Yield
Property/Location Occ. Rate RevPAR Penetration Penetration
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Properrty
450 Moreland Rd., Commack 57.9% $65.00 $37.65 79.8% 64.2%
Hampton Inn - Commack
680 Commack Rd., Commack 82.0 88.00 72.16 113.0 122.9
Hampton Inn - Islandia
1600 Vets. Highway, Islandia 75.0 77.00 57.75 103.3 98.4
- ----------------------------------------------------------------------------------------------
Sub-Totals and Averages 72.7% $78.99 $57.44 100.2% 97.9%
Secondary Competitors 72.0 84.85 61.09 99.2 104.1
- ----------------------------------------------------------------------------------------------
Totals and Averages 72.6% $80.87 $58.70 100.0% 100.0%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey shows nationally recognized chains controlling all of the rooms in
the competitive market. With 109 units, the subject property is the smallest
hotel in the market; the 144-room Hampton Inn - Commack is the largest. The
Howard Johnson opened in 1971, and thus is also the oldest facility among the
primary competitors. The Hampton Inns were constructed in 1988 and 1989; when
compared to the Howard Johnson, they are more modern in appearance and feature
more attractive appointments.
Local lodging demand has a strong commercial orientation; we estimate that the
1996 market segmentation of the primary competitors was 68% commercial, 22%
leisure, and 10% meeting and group. The three hotels are expected to achieve an
overall 1996 occupancy of 72.7% at an average rate of $78.99, which yields
RevPAR of $57.44. Both primary competitors were inspected and evaluated, and
descriptions of our findings are presented below.
Hampton Inn - Commack
The 144-room Hampton Inn - Commack is located on Commack Road, off Exit 52 of
the Long Island Expressway and approximately two miles west of the subject
property. The hotel is highly visible from the highway, and is superior to the
Howard Johnson in that respect. A freestanding Ground Round Restaurant is
located immediately west of the property, and the Commack Cinema is situated to
the east. Consequently, the neighborhood is also judged to be superior to that
of the Howard Johnson. A vacant parcel lies immediately north of the Hampton
Inn, and a service road providing access to Commack Road from the Long Island
Expressway is located to the south. This service road does not provide direct
access to the property, and thus guests must enter from Commack Road.
The Hampton Inn is not equipped with food and beverage outlets (although guests
are provided with a complimentary continental breakfast buffet). Meeting
facilities consist of one small room which can accommodate approximately 35
people. Guestrooms are attractively appointed, and offer all of the amenities
typically required by commercial travelers.
The hotel opened in 1989 and is owned by V.I.A. Properties Associates Limited
Partnership. The property benefits from its Hampton Inn affiliation, which has
enabled it to sustain strong occupancy and average rate levels. As of year-end
1996, we estimate the Hampton Inn's market mix at 70% commercial, 10% meeting
and groups, and 20% leisure.
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Hampton Inn- Islandia
The Hampton Inn - Islandia is located approximately four and one-half miles east
of the subject property, at the intersection formed by Veterans Memorial Highway
and the south service road of the Long Island Expressway. This location provides
convenient access to local demand generators, and is comparable to that of the
subject property. Like the Howard Johnson, the Hampton Inn cannot be seen from
the Long Island Expressway.
This 121-room hotel opened in July of 1988, and was originally owned by Concord
Hotels and operated by Lane Hotels. In July of 1994, the property was purchased
by Innkeepers USA Limited Partnership; JF Hotel Management is the current
operator. Like the Hampton Inn - Commack, this hotel benefits its strong chain
affiliation.
Like the other primary competitors, the Hampton Inn is not equipped with food
and beverage outlets (although guests are provided with a complimentary
continental breakfast buffet). Meeting facilities consist of one small room that
is the size of a typical guest unit. Guestrooms are attractively appointed, and
offer all of the amenities typically required by commercial travelers. We
estimate that approximately 70% of this hotel's demand is generated by the
commercial segment, 10% by meetings and groups, and 20% by leisure travelers.
Secondary Competitors
As noted earlier, two hotels are considered secondarily competitive with the
subject property; both are first-class, full-service facilities. Although the
secondary competitors have a strong commercial orientation, differences in their
locations, facilities, amenities, and rate structures prevent them from posing
direct competition to the Howard Johnson. The following table outlines the
pertinent operating statistics of these hotels.
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================================================================================
Table 6-5 Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1994
---------------------------- ------------------------
Weighted
Year No. of Percent No. of Mtg. & Average
Property Opened Rooms Competitive Rooms Comm. Group Leisure Occ. Rate RevPAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sheraton Long Island 1981 212 50% 106 62% 23% 15% 68% $82.00 $55.76
Holiday Inn Ronkonkoma 1974 287 25 72 65 20 15 71 68.33 48.79
- ------------------------------------------------------------------------------------------------------------------------------------
Totals and Averages 178 63% 22% 15% 69% $76.32 $52.66
</TABLE>
Estimated 1995 Estimated 1996
----------------------- -------------------------
Average Average
Property Occ. Rate RevPAR Occ. Rate RevPAR
- --------------------------------------------------------------------------------
Sheraton Long Island 70% $87.00 $60.90 71% $91.00 $64.61
Holiday Inn Ronkonkoma 71 73.33 52.06 74 76.15 56.50
- --------------------------------------------------------------------------------
Totals and Averages 70% $81.44 $57.00 72% $84.85 $61.09
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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We estimate the year-end 1996 weighted occupancy of the secondary competitors at
approximately 72%, which is slightly lower than the overall marketwide average
of 72.6%. The estimated 1996 average rate of these two properties is $84.85,
which is higher than the marketwide average of $80.87.
The 211-room Sheraton Smithtown is located roughly one mile east of the Howard
Johnson on Vanderbilt Motor Parkway. This full-service hotel offers amenities
far more extensive than those available at the subject property, which is
reflected in its higher rate structure. The Sheraton opened in 1981, and was
originally owned by Folklane Hotel Associates of Ronkonkoma and operated by Inn
America Corporation. As a result of financial difficulties and a sizable debt
burden, the Mutual Insurance Company of New York (which holds a mortgage on the
property) foreclosed in December of 1990. The court later appointed Stephen W.
Brener Associates, Inc., a Manhattan-based hotel consulting firm, as the
receiver during the foreclosure proceedings. Mutual Insurance subsequently
obtained ownership of the property, which is now operated by HEI Hotels, Inc.
A significant amount of airline crew business is accommodated by the Holiday Inn
- - MacArthur Airport, which is located approximately five and one-half miles
southeast of the subject property. This 287-room hotel was sold in September of
1993, and an extensive renovation was completed shortly thereafter. Current
management representatives indicate that they are trying to limit airline
business, which places downward pressure on the hotel's average rate. Because
demand has increased during the past two years, there are indications that this
low-rated patronage is no longer necessary, and recent marketing efforts have
been concentrated on commercial travelers. The Holiday Inn is currently owned by
Jack Parker, a New York developer, and operates under a franchise agreement with
Holiday Inns. The Holiday Inn is scheduled to undergo renovations in 1997,
including the addition of an indoor swimming pool.
Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have not identified any properties that are proposed or under
development in the Commack area. The market only recently surpassed the 70%
occupancy mark, and (absent singular events such as the TWA crash) has not
demonstrated a strong growth trend in the past several years. Moreover, although
the local economy is recovering from the recent recession, forecasts anticipate
only moderate growth in the near term.
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Accordingly, we believe it is unlikely that a new hotel will be developed in
this market in the near future.
Conclusion
We estimate that the overall occupancy of the primary and secondary competitors
rose from 72.3% in 1995 to 72.6% in 1996, and this gain was accompanied by an
average rate increase from $74.85 to $80.87 in 1996. A majority of the area's
lodging demand is generated by commercial travelers, who constitute roughly 66%
of the total occupancy. All of the competitive hotels derive at least 60% of
their demand from commercial guests. Leisure travelers contribute roughly 20% of
the total, and the meeting and group segment generates the remaining 14%.
Overall, the market has exhibited minimal growth during the next several years,
and no new development is anticipated in the near future.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors. We note that we were unable to
obtain data for the subject property prior to calendar year 1994.
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================================================================================
Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year-to-Date August
---------------------
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 55.1 % 58.1 % 56.9 % 59.1 %
Percent Change --- 5.4 % --- 3.9 %
Occupancy Penetration 78.2 % 81.6 % 80.2 % 81.6 %
Average Rate $56.38 $61.34 $60.92 $64.93
Percent Change --- 8.8 % --- 6.6 %
Average Rate Penetration 77.8 % 80.2 % 79.9 % 81.0 %
RevPAR $31.08 $35.64 $34.64 $38.35
Percent Change --- 14.7 % --- 10.7 %
RevPAR Penetration 60.8 % 65.5 % 64.1 % 66.0 %
Areawide (STR)
Occupancy 70.5 % 71.2 % 70.9 % 72.4 %
Percent Change 8.1 % 1.0 % --- 2.1 %
Average Rate $72.46 $76.46 $76.20 $80.20
Percent Change 6.4 % 5.5 % --- 5.2 %
RevPAR $51.08 $54.44 $54.03 $58.06
Percent Change 15.0 % 6.6 % --- 7.5 %
- --------------------------------------------------------------------------------
The preceding table shows that the subject property achieving occupancy and
average rate levels lower than the marketwide averages since 1994. Consequently,
its historical RevPAR was also far below that of the market as a whole. The
hotel's penetration factors are equally poor.
As noted earlier in this report, we believe that the hotel's weak performance is
largely the result of its Howard Johnson affiliation, which tends to be more
accepted among leisure travelers than commercial guests. Both of the property's
primary competitors maintain a Hampton Inn affiliation, and this franchise
benefits from a loyal following in the commercial segment of the market. Because
most of the lodging demand in the Commack area is commercial in nature, this is
considered a significant drawback.
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A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy from 1994 through August of 1996.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1994 1995 1996
--------- --------------------- ---------------------
Percent Percent
Occupancy Occupancy Change Occupancy Change
- --------------------------------------------------------------------------------
January 47.8 % 35.5 % (25.7) % 38.6 % 8.6 %
February 45.8 39.4 (14.0) 47.0 19.2
March 48.6 41.8 (14.0) 50.9 21.8
April 51.4 48.5 (5.6) 58.3 20.2
May 69.7 56.6 (18.8) 51.7 (8.6)
June 69.5 83.7 20.4 66.1 (21.0)
July 65.6 70.5 7.5 76.4 8.3
August 70.8 77.8 9.9 82.6 6.1
September 57.7 61.1 5.9 --- ---
October 44.6 72.1 61.7 --- ---
November 43.2 55.4 28.2 --- ---
December 45.8 53.5 16.8 --- ---
- --------------------------------------------------------------------------------
Annual 55.1 % 58.1 % 5.4 % --- ---
- --------------------------------------------------------------------------------
As illustrated above, the subject property's peak season is in the spring and
summer, from May through the end of September, when occupancies reach the upper
60% and lower 70% range. The higher occupancy levels recorded in July and August
of 1996 were a result of the demand generated by government officials and the
media in the wake of the TWA plane crash. As noted earlier in this report,
occupancy levels have increased slightly as a result of a more favorable
economic climate throughout the region. Occupancy falls off considerably during
the winter, when there is a reduction in commercial and leisure business.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
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Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365). The total annual number
of room nights occupied in the competitive hotels equates to the market's
accommodated room night demand, as shown in the following table.
================================================================================
Table 7-3 Estimated Year-End 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
--------------------------- --------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 97,000 66 % 14,000 61 %
Meeting and Group 20,000 14 2,000 9
Leisure 29,000 20 7,000 30
- --------------------------------------------------------------------------------
Total 146,000 100 % 23,000 100 %
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. Based
on our market analysis, interviews with local hotel operators, and the area's
overall occupancy levels, we consider it unlikely that there is any significant
amount of latent demand in the subject property's market.
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market. As noted above, our analysis does not consider any latent demand. The
following table outlines the projected annual change in accommodated room night
demand in the subject property's competitive market.
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Table 7-4 Total Usable Room Night Demand
- --------------------------------------------------------------------------------
Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Commercial
Growth Rate --- 2.0 % 2.0 % 1.0 % 1.0 %
Accommodated Demand 96,852 98,789 100,765 101,773 102,791
Meeting and Group
Growth Rate --- 1.0 % 1.0 % 0.5 % 0.5 %
Accommodated Demand 20,132 20,333 20,536 20,639 20,742
Leisure
Growth Rate --- 1.0 % 1.0 % 1.0 % 1.0 %
Accommodated Demand 29,195 29,487 29,782 30,080 30,381
Totals
Commercial 96,852 98,789 100,765 101,773 102,791
Meeting and Group 20,132 20,333 20,536 20,639 20,742
Leisure 29,195 29,487 29,782 30,080 30,381
- --------------------------------------------------------------------------------
TOTAL DEMAND 146,179 148,609 151,083 152,492 153,914
Overall Annual Growth --- 1.7 % 1.7 % 0.9 % 0.9 %
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 552 guestrooms.
Based on our market analysis and interviews with area general managers and
government officials, we did not identify any proposed lodging properties that
are likely to enter the market in the near future. The following table shows the
projected competitive supply of available rooms and available room nights. To
calculate the annual number of available room nights, the number of available
rooms is multiplied by 365.
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================================================================================
Table 7-5 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Overall
Room Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------------------------
Historical 146,179 201,389 73 %
1997 148,609 201,389 74
1998 151,083 201,389 75
1999 152,492 201,389 76
2000 153,914 201,389 76
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
As a result of the projected growth in demand, the overall competitive occupancy
is expected to increase moderately, from 73% in 1996 to 76% in the year 2000.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, or leisure), or the number of room nights
actually accommodated per year, per room, per market segment. For example, if a
hotel has a commercial competitive index of 190, each room in the property is
occupied 190 times a year by a commercial traveler. The competitive index is
calculated by dividing a hotel's annual accommodated room night demand in a
particular market segment by that property's room count. Competitive indexes
will be used to illustrate each property's position in the market based on its
ability to compete with other local lodging facilities.
Commercial Segment
We estimate that the year-end 1996 commercial segment competitive indexes in the
subject property's market range from 210 to 127. The Hampton Inn - Commack is
the most competitive property in this segment, followed by the Hampton Inn -
Islandia (with an estimated index of 192). In the aggregate, the secondary
competitors maintain an index of 167. The subject property is the least
competitive hotel in the commercial segment, with an estimated year-end 1996
index of 127. Because none of the competitive hotels are scheduled to undergo
extensive renovation or expansion, we anticipate no changes in the historical
competitive indexes in the commercial market segment. The following table
summarizes the projected commercial segment competitive indexes of the area's
hotels.
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Table 7-6 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Subject Properrty 127 127 127 127 127
Hampton Inn - Commack 210 210 210 210 210
Hampton Inn - Islandia 192 192 192 192 192
Secondary Competitors 167 167 167 167 167
- --------------------------------------------------------------------------------
Meeting and Group Segment
As a result of their full-service orientation and relatively large inventory of
function space, the secondary competitors maintain the highest index in the
meeting and group segment. Because the subject property offers only 800 square
feet of function space, its participation in this segment is inherently limited,
and our conversations with management representatives indicate that the hotel
does, in fact, derive little occupancy from this type of demand. We assume that
the Howard Johnson's estimated year-end 1996 meeting and group competitive index
of 21 represents a stabilized level. Again, because no significant changes are
anticipated at the other competitors, their indexes are also assumed to remain
at historical levels. The following table illustrates the competitive indexes in
the meeting and group segment.
================================================================================
Table 7-7 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Subject Properrty 21 21 21 21 21
Hampton Inn - Commack 30 30 30 30 30
Hampton Inn - Islandia 27 27 27 27 27
Secondary Competitors 57 57 57 57 57
- --------------------------------------------------------------------------------
Leisure Segment
The subject property is the most competitive hotel in the leisure market, with
an estimated year-end 1996 index of 63. The Hampton Inn - Commack follows (at
60), and the Hampton Inn - Islandia maintains an index of 55. In large part, the
Howard Johnson's strong presence in the leisure segment reflects its limited
participation in the commercial and meeting and group segment. As noted earlier,
the Howard Johnson name has more appeal among leisure travelers than among
commercial guests. We assume no changes in the competitive indexes of the local
hotels during the
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projection period. The following table illustrates the competitive indexes in
the leisure segment.
================================================================================
Table 7-8 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Subject Properrty 63 63 63 63 63
Hampton Inn - Commack 60 60 60 60 60
Hampton Inn - Islandia 55 55 55 55 55
Secondary Competitors 40 40 40 40 40
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights. Multiplying the subject property's projected market share
by the estimated room night demand in each segment results in the following
estimate of room nights captured by the hotel.
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Table 7-9 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000
- --------------------------------------------------------------------------------
Commercial
Demand 98,789 100,765 101,773 102,791
Market Share 0.1427 0.1427 0.1427 0.1427
- --------------------------------------------------------------------------------
Capture 14,098 14,380 14,524 14,670
Meeting and Group
Demand 20,333 20,536 20,639 20,742
Market Share 0.1144 0.1144 0.1144 0.1144
- --------------------------------------------------------------------------------
Capture 2,326 2,349 2,361 2,373
Leisure
Demand 29,487 29,782 30,080 30,381
Market Share 0.2346 0.2346 0.2346 0.2346
- --------------------------------------------------------------------------------
Capture 6,917 6,987 7,057 7,127
Total Capture 23,341 23,716 23,942 24,170
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 109 x 365) produces the
projected occupancy percentage.
================================================================================
Table 7-10 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000
-------------------------------------------
Room Nights Captured 23,341 23,716 23,942 24,170
Available Room Nights 39,785 39,785 39,785 39,785
Occupancy 58.67 % 59.61 % 60.18 % 60.75 %
Rounded 59 % 60 % 60 % 61 %
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
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Table 7-11 Occupancy Forecast
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Year Occupancy
------------------------------------
1997 59%
Stabilized 60
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 61% occupancy in the year 2000, we have chosen to use a stabilized level of
60%. The stabilized occupancy is intended to reflect the anticipated results of
the property over its remaining economic life, given any and all changes in the
life cycle of the hotel. Thus, the stabilized occupancy excludes from
consideration any abnormal relationship between supply and demand, as well as
any nonrecurring conditions that may result in unusually high or low
occupancies. Although the subject property may operate at occupancies above this
stabilized level, we believe it equally possible for new competition and
temporary economic downturns to force the occupancy below this selected point of
stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate from 1994 through August of 1996.
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Table 7-12 Subject Property's Occupancy and Average Rate by Month
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996
------------------ --------------------------------------- ---------------------------------------
Average Percent Average Percent Percent Average Percent
Occupancy Rate Occupancy Change Rate Change Occupancy Change Rate Change
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 47.8% $56.43 35.5% (25.7)% $56.74 0.5% 38.6% 8.6% $58.86 3.7%
February 45.8 56.54 39.4 (14.0) 57.40 1.5 47.0 19.2 59.76 4.1
March 48.6 56.24 41.8 (14.0) 61.04 8.5 50.9 21.8 59.28 (2.9)
April 51.4 55.65 48.5 (5.6) 61.14 9.9 58.3 20.2 62.41 2.1
May 69.7 53.81 56.6 (18.8) 61.86 15.0 51.7 (8.6) 68.32 10.4
June 69.5 53.83 83.7 20.4 62.30 15.7 66.1 (21.0) 67.25 7.9
July 65.6 55.50 70.5 7.5 61.36 10.6 76.4 8.3 70.44 14.8
August 70.8 57.69 77.8 9.9 61.73 7.0 82.6 6.1 66.61 7.9
September 57.7 57.82 61.1 5.9 66.12 14.4 -- -- -- --
October 44.6 59.10 72.1 61.7 63.92 8.2 -- -- -- --
November 43.2 58.55 55.4 28.2 58.37 (0.3) -- -- -- --
December 45.8 57.70 53.5 16.8 59.07 2.4 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Weighted Average 55.1% $56.38 58.1% 5.4% $61.34 8.8% -- -- -- --
</TABLE>
- --------------------------------------------------------------------------------
The previous table underscores the correlation between a hotel's occupancy and
its average rate: as occupancy increases, rates tend to follow. On a monthly
basis, the subject property's average rate fluctuates. In general, the Howard
Johnson registered the highest average rates in May, June, July, August,
September, and October, when commercial travel is augmented by leisure demand.
In July of 1996, the hotel's monthly average rate topped $70 for the first time
since 1994. With the exception of declines in November of 1995 and March of
1996, the Howard Johnson has maintained consistent rate growth; occupancy gains
have been less favorable.
Competitive Positioning
The Howard Johnson's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 76
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project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the estimated year-end 1996 average rate and RevPAR
of the subject property and its primary competitors.
================================================================================
Table 7-13 Estimated Year-End Average Rate and RevPAR
- --------------------------------------------------------------------------------
Property Average Rate RevPAR
-----------------------------------------------------------------------
Subject Properrty $65.00 $37.65
Hampton Inn - Commack 88.00 72.16
Hampton Inn - Islandia 77.00 57.75
-----------------------------------------------------------------------
Average $78.99 $57.44
- --------------------------------------------------------------------------------
As the preceding table indicates, the estimated year-end 1996 average rate of
the Hampton Inn - Commack is the highest in the market, at $88. The Hampton Inn
- - Islandia follows at $77. The subject property's estimated year-end 1996
average rate of $65 is the lowest in the market. This competitive positioning is
reasonable given that the two Hampton Inns are relatively new properties that
are oriented toward commercial travelers; the Commack property maintains the
highest rate because it benefits from a number of negotiated contracts with
local businesses. Because the Howard Johnson is the primary competitor situated
closest to the Hauppauge Industrial Park, we believe that it should capture more
high-rated commercial business than it does at present. As noted earlier, the
Howard Johnson affiliation is considered a major disadvantage in attracting this
type of demand.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds
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inflation. Markets that are overbuilt or suffering from declining demand
are unlikely to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Statistics provided by Smith Travel Research indicate that the market maintained
strong average rate gains of 6.4% in 1994 and 5.5% in 1995. Estimates indicate a
further marketwide increase of 5.2% from 1995 to 1996, and the subject property
is estimated to have achieved a 6.6% rate increase in 1996. Based on these
considerations, the following table shows our projection of average rate
increases.
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================================================================================
Table 7-14 Average Rate Forecast
- --------------------------------------------------------------------------------
Marketwide Subject Property
---------------------- ---------------------------
Rate Rate
Year Occupancy Increase Increase Average Rate
- --------------------------------------------------------------------------------
Positioned Base --- --- --- $65.00
1997 74 % 5% to 6% 4.0 % 67.61
Stabilized 75 4 to 5 3.5 69.97
- --------------------------------------------------------------------------------
To derive a forecast of average rate for the subject property, we have
recognized the strong level of growth in the market. We forecast the Howard
Johnson's average rate to increase by 4.0% in 1997, followed by increases of
3.5% annually (in tandem with the assumed underlying inflation rate). The
following table outlines our project of occupancy and average rate for the
Howard Johnson through the stabilized year.
================================================================================
Table 7-15 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
-----------------------------------------------------------
1997 59% $67.61
Stabilized 60 69.97
- --------------------------------------------------------------------------------
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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HVS International, Mineola, New York Highest and Best Use 80
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be for the development of a lodging facility. Based on the fact
that the value of the land does not exceed the value of the hotel plus the cost
of demolition, it is our further opinion that the subject property's highest and
best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 81
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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HVS International, Mineola, New York Approaches to Value 83
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
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================================================================================
10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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HVS International, Mineola, New York Income Capitalization Approach 85
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 86
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
4. Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
5. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 87
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Howard Johnson Commack is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1971, and achieved
occupancy levels of 55.3% in 1994 and 56.9% in 1995. The following income and
expense statements were provided by the Ashford Financial Corporation, and are
unaudited. Where applicable, we have reorganized the statements in accordance
with the Uniform System of Accounts for Hotels.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 88
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================================================================================
Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
----------------------------------------------- --------------------------------------------------
No of Rooms: 109 109
No of Occupied Rooms 22,630 14,411
No of Complimentary Rooms: 479 346
No of Days Open: 365 245
Occupancy: 56.9% Amount per Amount per 55.3% Amount per Amount per
Average Rate: $61.34 Percent Available Occupied $56.67 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,388 96.2% $12,736 $61.34 $817 94.7% $7,492 $56.67
Telephone 34 2.3 310 1.49 29 3.4 270 2.04
Other Income 21 1.5 193 12.80 17 1.9 152 1.15
Total 1,443 100.0 13,238 63.76 863 100.0 7,915 59.86
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 290 20.9 2,658 12.80 204 24.9 1,868 14.13
Telephone 19 54.9 170 0.82 15 52.4 142 1.07
Other Income 0.0 0.00 0.6 1 0.01
Total 308 21.4 2,828 13.62 219 25.4 2,011 15.21
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,135 78.6 10,411 50.14 644 74.6 5,904 44.65
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 159 11.0 1,459 7.03 88 10.2 810 6.13
Management Fee 43 3.0 397 1.91 26 3.0 239 1.81
Marketing 138 9.5 1,263 6.08 26 3.0 241 1.82
Franchise Fees 44 3.0 400 1.93 41 4.8 378 2.86
Property Oper. & Maint. 101 7.0 929 4.47 64 7.4 584 4.42
Energy 151 10.4 1,382 6.66 102 11.9 940 7.11
Total 636 43.9 5,830 28.08 348 40.3 3,192 24.14
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 499 34.7 4,581 22.06 296 34.3 2,712 20.51
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 104 7.2 957 4.61 58 6.7 528 3.99
Insurance 37 2.5 335 1.61 24 2.8 221 1.67
Reserve for Replacement 58 4.0 530 2.55 26 3.0 239 1.81
Equipment Rental 5 0.4 50 0.24 7 0.9 68 0.51
Total 204 14.1 1,872 9.01 115 13.4 1,055 7.98
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $295 20.6% $2,709 $13.05 $181 20.9% $1,657 $12.53
====================================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year-to-Date August, 1995 Year-to-Date August, 1996
--------------------------------------------- -----------------------------------------------
No of Rooms: 109 109
No of Occupied Rooms: 14,705 15,260
No of Complimentary Rooms: 0 0
No of Days Open: 242 243
Occupancy: 55.7% Amount per Amount per 57.6% Amount per Amount per
Average Rate: $61.05 Percent Available Occupied $65.09 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $898 96.5% $8,237 $61.05 $993 95.4% $9,113 $65.09
Telephone 22 2.3 198 1.47 32 3.1 298 2.13
Other Income 11 1.2 103 0.76 15 1.5 139 0.99
Total 931 100.0 8,538 63.29 1,041 100.0 9,549 68.21
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 182 20.3 1,670 12.38 199 20.0 1,826 13.04
Telephone 12 54.1 107 0.79 16 50.6 151 1.08
Other Income 0.0 0.00 0.0 0.00
Total 194 20.8 1,777 13.17 215 20.7 1,977 14.12
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 737 79.2 6,761 50.11 825 79.3 7,573 54.09
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 100 10.8 920 6.82 117 11.2 1,071 7.65
Management Fee 28 3.0 256 1.90 31 3.0 286 2.05
Marketing 87 9.3 797 5.91 91 8.8 839 5.99
Franchise Fees 28 3.0 259 1.92 32 3.1 294 2.10
Property Oper. & Maint. 67 7.2 612 4.54 74 7.2 683 4.88
Energy 110 11.8 1,006 7.45 121 11.6 1,111 7.94
Total 420 45.1 3,850 28.53 467 44.9 4,285 30.61
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 317 34.1 2,911 21.58 358 34.4 3,288 23.48
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 64 6.9 585 4.34 60 5.8 550 3.93
Insurance 27 2.9 250 1.85 19 1.8 172 1.23
Reserve for Replacement 37 4.0 342 2.53 41 4.0 380 2.72
Equipment Rental 4 0.4 33 0.25 4 0.4 37 0.26
Total 132 14.2 1,210 8.97 124 12.0 1,140 8.14
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $185 19.9% $1,701 $12.61 $234 22.4% $2,148 $15.34
====================================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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The year-to-date August statements presented on the previous page show an
increase in telephone revenues from 1995 to 1996; this is largely attributable
to the presence of numerous government officials and media representatives
following the crash of TWA Flight 800 off the coast of Long Island; by the
nature of their business, these guests made more long-distance calls than would
be expected of the hotel's typical clientele. Departmental expenses and
operating expenses remained relatively stable. The only fixed expense that
showed any significant fluctuation was insurance, which declined from 1995 to
1996 on a year-to-date basis.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
operating results. Depending on the dynamics of the local market, a typical
buyer's projection may be adjusted upward or downward. We have attempted to
consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
56.9%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
1995
--------------------------------------------------
No of Rooms: 109
Occupancy: 56.9%
Average Rate: $61.34 Amount per Amount per
No of Occupied Rooms: 22,630 Percent Available Occupied
(+000) of Gross Room Room
- --------------------------------------------------------------------------------
REVENUE
Rooms $1,388 95.8 % $12,736 $61.34
Telephone 40 2.8 371 1.79
Other Income 21 1.5 193 0.93
Total 1,450 100.0 13,300 64.06
- --------------------------------------------------------------------------------
EXPENSES
Rooms* 329 23.7 3,018 14.54
Telephone* 21 53.0 197 0.95
Administrative & General 180 12.4 1,649 7.94
Management Fee 43 3.0 399 1.92
Marketing 124 8.5 1,136 5.47
Franchise Fees 53 3.6 484 2.33
Property Oper. & Maint. 111 7.7 1,022 4.92
Energy 151 10.4 1,382 6.66
Property Taxes 86 6.0 793 3.82
Insurance 33 2.3 300 1.44
Reserve for Replacement 58 4.0 532 2.56
Equipment Rental 5 0.4 50 0.24
Total 1,195 82.4 10,963 52.80
- --------------------------------------------------------------------------------
NET INCOME $255 17.6 % $2,337 $11.26
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Although line items can be affected by different factors,
we must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1 % 2.3 %
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, Amer. Exp. Finl. Adv. 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
----- -----
Average 3.0 % 2.9 %
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
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The preceding table shows inflation forecasts averaging 3.0% and 2.9%. Although
most of the economists in the sample estimate inflation rates ranging from 2.5%
to 3.4%, several anticipate slightly higher levels. As a further check on these
inflation projections, we have reviewed historical increases in the Consumer
Price Index. Because the value of real estate is predicated on cash flows over a
relatively long period, inflation should be considered from a long-term
perspective. Between 1986 and 1995, the national CPI increased at an average
annual compounded rate of 3.7%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% annually.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, the subject property's room rate is
expected to increase by 4.0% in 1997 before stabilizing at 3.5% annually
throughout the remainder of the projection period.
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1995 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 Stabilized
-----------------------------------------------------------------------
Projected Occupancy Percentage 59.0 % 60.0 %
Projected Average Rate $67.61 $69.97
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
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================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Rooms
Number Days Revenue
Year Occupancy Average Rate of Units in Year (+000)
- --------------------------------------------------------------------------------
1997 59 % x $67.61 x 109 x 365 = $1,587
Stabilized 60 x 69.97 x 109 x 365 = 1,670
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the early 1980s, hotels were limited to a 15%
commission on long-distance calls, which allowed few profits. Deregulation and
the development of sophisticated call-accounting equipment have resulted in
profitable telephone departments. State-of-the-art equipment is capable of
least-cost routing, automatic price billing, and posting telephone charges to
guest folios. Hotels can select among various long-distance services, and can
also work with any one of a number of Alternative Operator Services (AOS). These
systems route and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
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Table 10-8 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Revenue (+000) $45 $47
Percent of Total Revenue 2.7% 2.7%
Amount per Available Room $411 $432
Amount per Occupied Room $1.92 $1.97
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms and telephone
services. Depending on the type of hotel and the facilities and amenities
offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
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Table 10-9 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Other Income (+000) $23 $24
Percent of Total Revenue 1.4% 1.4%
Amount per Available Room $209 $218
Amount per Occupied Room $0.98 $1.01
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-10 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Rooms Expense (+000) $358 $373
Percent of Rooms Revenue 22.5% 22.3%
Amount per Available Room $3,282 $3,420
Amount per Occupied Room $15.25 $15.63
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
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The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
================================================================================
Table 10-11 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Expense (+000) $23 $24
Percent of Telephone Revenue 51.8% 51.6%
Amount per Available Room $214 $222
Amount per Occupied Room $0.98 $1.01
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category. Most administrative and general
expenses are relatively fixed. The exceptions are cash overages and shortages;
commissions on credit card charges; provision for doubtful accounts, which are
moderately affected by the number of transactions or total revenue; and
salaries, wages, and benefits, which are very slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of
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alcohol served and total food and beverage sales; the presence of a dance floor;
a high-rise structure; a swimming pool; life safety support systems; and the
guest transportation services provided by the hotel. The following table
illustrates our forecast of administrative and general expense.
================================================================================
Table 10-12 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Admin. & General Expense (+000) $196 $204
Ratio to Total Revenue 11.9% 11.7%
Amount per Available Room $1,798 $1,872
Amount per Occupied Room $8.37 $8.56
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Hotel Company for a fee of 3.0% of
total revenue. Based on our review of the current market for management
contracts, we are of the opinion that this fee is consistent with prevailing
market terms. Applying this management fee structure to the
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projection of total revenue yields the following forecast of the subject
property's management fee.
================================================================================
Table 10-13 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Management Fee (+000) $50 $52
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue. Based on the location of the subject property, the
local market for transient accommodations, the competitive environment, and the
hotel's anticipated market segmentation, we have developed the following
marketing forecast using a fixed and variable component model.
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Table 10-14 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Marketing Expense (+000) $135 $141
Ratio to Total Revenue 8.2% 8.1%
Amount per Available Room $1,241 $1,291
Amount per Occupied Room $5.76 $5.90
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Howard Johnson for the use of the
company's name, trademarks, and service marks. The following table illustrates
the projection of the subject property's franchise fee.
================================================================================
Table 10-15 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Franchise Fees (+000) $60 $63
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
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Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-16 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Prop. Oper. & Maint. Expense (+000) $122 $127
Ratio to Total Revenue 7.4% 7.3%
Amount per Available Room $1,116 $1,161
Amount per Occupied Room $5.18 $5.30
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 102
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================================================================================
Table 10-17 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Energy Expense (+000) $162 $168
Ratio to Total Revenue 9.8% 9.7%
Amount per Available Room $1,491 $1,546
Amount per Occupied Room $6.92 $7.06
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-18 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Property Taxes (+000) $94 $99
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $35,000 in 1997 (the first projection period). In subsequent
years, this amount is assumed to increase in tandem with inflation. The
following table outlines our projection of insurance expense.
================================================================================
Table 10-19 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Insurance Expense (+000) $35 $36
- --------------------------------------------------------------------------------
<PAGE>
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Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-20 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Replacement Reserve (+000) $66 $70
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years, and are expressed in inflated
dollars for each year.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 104
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================================================================================
Table 10-21 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Howard Johnson Commack, Commack,
New York
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1995 Results 1997
--------------------------------------- ----------------------------------------
No of Rooms: 109 109
Occupancy: 56.9% 59.0%
Average Rate: $61.34 $67.61
No of Days Open: 365 Percent 365 Percent
No of Occupied Rooms: 22,630 of 23,473 of
(+000) Gross PAR POR (+000) Gross PAR POR
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,388 96.2 % $12,736 $61.34 $1,587 95.9 % $14,560 $67.61
Telephone 34 2.3 310 1.49 45 2.7 413 1.92
Other Income 21 1.5 193 0.93 23 1.4 211 0.98
Total 1,443 100.0 13,238 63.76 1,655 100.0 15,183 70.51
- --------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 290 20.9 2,658 12.80 358 22.6 3,284 15.25
Telephone 19 54.9 170 0.82 23 51.1 211 0.98
Total 308 21.4 2,828 13.62 381 23.0 3,495 16.23
- --------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,135 78.6 10,411 50.14 1,274 77.0 11,688 54.27
- --------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 159 11.0 1,459 7.03 196 11.8 1,798 8.35
Management Fee 43 3.0 397 1.91 50 3.0 459 2.13
Marketing 138 9.5 1,263 6.08 135 8.2 1,239 5.75
Franchise Fees 44 3.0 400 1.93 60 3.6 550 2.56
Property Oper. & Maint. 101 7.0 929 4.47 122 7.4 1,119 5.20
Energy 151 10.4 1,382 6.66 162 9.8 1,486 6.90
Total 636 43.9 5,830 28.08 725 43.8 6,651 30.89
- --------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 499 34.7 4,580 22.06 549 33.2 5,037 23.39
- --------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 104 7.2 957 4.61 94 5.7 862 4.00
Insurance 37 2.5 335 1.61 35 2.1 321 1.49
Reserve for Replacement 58 4.0 530 2.55 66 4.0 606 2.81
Equipment Rental 5 0.4 50 0.24 6 0.4 55 0.26
Total 204 14.1 1,872 9.01 201 12.2 1,844 8.56
- --------------------------------------------------------------------------------------------------------------------------------
NET INCOME $295 20.6 % $2,709 $13.05 $348 21.0 % $3,193 $14.83
================================================================================================================================
Telephone/Rooms 2.4% 2.8%
Other Income/Rooms 1.5% 1.4%
</TABLE>
Stabilized
----------------------------------------
No of Rooms: 109
Occupancy: 60.0%
Average Rate: $69.97
No of Days Open: 365 Percent
No of Occupied Rooms: 23,871 of
(+000) Gross PAR POR
- ------------------------------------------------------------------------------
REVENUE
Rooms $1,670 95.9 % $15,321 $69.96
Telephone 47 2.7 431 1.97
Other Income 24 1.4 220 1.01
Total 1,741 100.0 15,972 72.93
- ------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 373 22.3 3,422 15.63
Telephone 24 51.1 220 1.01
Total 397 22.8 3,642 16.63
- ------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,344 77.2 12,330 56.30
- ------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 204 11.7 1,872 8.55
Management Fee 52 3.0 477 2.18
Marketing 141 8.1 1,294 5.91
Franchise Fees 63 3.6 578 2.64
Property Oper. & Maint. 127 7.3 1,165 5.32
Energy 168 9.6 1,541 7.04
Total 755 43.3 6,927 31.63
- ------------------------------------------------------------------------------
HOUSE PROFIT 589 33.9 5,404 24.67
- ------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 99 5.7 908 4.15
Insurance 36 2.1 330 1.51
Reserve for Replacement 70 4.0 642 2.93
Equipment Rental 6 0.3 55 0.25
Total 211 12.1 1,936 8.84
- ------------------------------------------------------------------------------
NET INCOME $378 21.8 % $3,468 $15.84
==============================================================================
Telephone/Rooms 2.8%
Other Income/Rooms 1.4%
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 105
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================================================================================
Table 10-22 Ten-Year Forecast of Income and Expense, Howard Johnson Commack,
Commack, New York (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
--------------- --------------- ----------------- ---------------- ---------------
No of Rooms: 109 109 109 109 109
No of Occupied Rooms: 23,473 23,871 23,871 23,871 23,871
Occupancy: 59.0% % of 60.0% % of 60.0% % of 60.0% % of 60.0% % of
Average Rate: $67.61 Gross $69.97 Gross $72.42 Gross $74.95 Gross $77.58 Gross
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,587 95.9% $1,670 95.9% $1,729 95.9% $1,789 96.0% $1,852 96.0%
Telephone 45 2.7 47 2.7 49 2.7 50 2.7 52 2.7
Other Income 23 1.4 24 1.4 25 1.4 25 1.3 26 1.3
Total 1,655 100.0 1,741 100.0 1,803 100.0 1,864 100.0 1,930 100.0
- ------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 358 22.6 373 22.3 386 22.3 399 22.3 413 22.3
Telephone 23 51.1 24 51.1 25 51.0 26 52.0 27 51.9
Total 381 23.0 397 22.8 411 22.8 425 22.8 440 22.8
- ------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,274 77.0 1,344 77.2 1,392 77.2 1,439 77.2 1,490 77.2
- ------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 196 11.8 204 11.7 211 11.7 219 11.7 226 11.7
Management Fee 50 3.0 52 3.0 54 3.0 56 3.0 58 3.0
Marketing 135 8.2 141 8.1 146 8.1 151 8.1 156 8.1
Franchise Fees 60 3.6 63 3.6 66 3.7 68 3.6 70 3.6
Property Oper. & Maint. 122 7.4 127 7.3 131 7.3 136 7.3 140 7.3
Energy 162 9.8 168 9.6 174 9.7 180 9.7 187 9.7
Total 725 43.8 755 43.3 782 43.5 810 43.4 837 43.4
- ------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 549 33.2 589 33.9 610 33.7 629 33.8 653 33.8
- ------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 94 5.7 99 5.7 103 5.7 108 5.8 113 5.9
Insurance 35 2.1 36 2.1 38 2.1 39 2.1 40 2.1
Reserve for Replacement 66 4.0 70 4.0 72 4.0 75 4.0 77 4.0
Equipment Rental 6 0.4 6 0.3 6 0.3 6 0.3 7 0.4
Total 201 12.2 211 12.1 219 12.1 228 12.2 237 12.4
- ------------------------------------------------------------------------------------------------------------------------
NET INCOME $348 21.0% $378 21.8% $391 21.6% $401 21.6% $416 21.4%
========================================================================================================================
<CAPTION>
2002 2003 2004 2005 2006
--------------- ---------------- --------------- --------------- ---------------
No of Rooms: 109 109 109 109 109
No of Occupied Rooms: 23,871 23,871 23,871 23,871 23,871
Occupancy: 60.0% % of 60.0% % of 60.0% % of 60.0% % of 60.0% % of
Average Rate: $80.29 Gross $83.10 Gross $86.01 Gross $89.02 Gross $92.14 Gross
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,917 95.9% $1,984 95.9% $2,053 95.9% $2,125 95.9% $2,199 95.9%
Telephone 54 2.7 56 2.7 58 2.7 60 2.7 62 2.7
Other Income 27 1.4 28 1.4 29 1.4 30 1.4 31 1.4
Total 1,998 100.0 2,068 100.0 2,140 100.0 2,215 100.0 2,292 100.0
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 428 22.3 443 22.3 458 22.3 474 22.3 491 22.3
Telephone 28 51.9 29 51.8 30 51.7 31 51.7 32 51.6
Total 456 22.8 472 22.8 488 22.8 505 22.8 523 22.8
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,542 77.2 1,596 77.2 1,652 77.2 1,710 77.2 1,769 77.2
- ----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 234 11.7 243 11.8 251 11.7 260 11.7 269 11.7
Management Fee 60 3.0 62 3.0 64 3.0 66 3.0 69 3.0
Marketing 162 8.1 167 8.1 173 8.1 179 8.1 185 8.1
Franchise Fees 73 3.7 75 3.6 78 3.6 81 3.7 84 3.7
Property Oper. & Maint. 145 7.3 150 7.3 156 7.3 161 7.3 167 7.3
Energy 193 9.7 200 9.7 207 9.7 214 9.7 222 9.7
Total 867 43.5 897 43.5 929 43.4 961 43.5 996 43.5
- ----------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 675 33.7 699 33.7 723 33.8 749 33.7 773 33.7
- ----------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 118 5.9 123 5.9 129 6.0 134 6.0 140 6.1
Insurance 42 2.1 43 2.1 45 2.1 46 2.1 48 2.1
Reserve for Replacement 80 4.0 83 4.0 86 4.0 89 4.0 92 4.0
Equipment Rental 7 0.4 7 0.3 7 0.3 8 0.4 8 0.3
Total 247 12.4 256 12.3 267 12.4 277 12.5 288 12.5
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $428 21.3% $443 21.4% $456 21.4% $472 21.2% $485 21.2%
======================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the average A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
<PAGE>
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================================================================================
Table 10-23 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average Average A Corporate
Year Interest Rate Bond Yield
----------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 108
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hotel mortgage and the concurrent yield on an average A corporate bond. Through
a regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The average yield on A corporate bonds for the third quarter of 1996, as
reported by Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the
equation presented above produces an estimated hotel/motel interest rate of
8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of 65% to 75%, and
amortization periods of 25 to 30 years. The exact terms offered depend on
specific factors such as the property's location, the age and quality of the
physical facility, local hostelry market conditions, and
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 109
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(perhaps more significantly) the profile of the borrower. The strongest projects
typically command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 20-year
amortization mortgage with a 9.5% interest rate and a 0.111856 constant is
appropriate for the subject property. We believe that a mortgage lender will
lend up to 70% of the hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
<PAGE>
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================================================================================
Table 10-24 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $ 23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 111
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-25 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22.0% before payment of incentive management
fees. This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Table 10-26 Equity Yield Requirements
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Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70 % x 0.11186 = 0.07830
Equity 30 % x 0.13000 = 0.03900
-------
Overall Capitalization Rate 0.11730
- --------------------------------------------------------------------------------
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 12.0%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-27 Summary of Valuation Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow (as
derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $3,140,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22.0%, then $3,140,000 is the correct value by the
income capitalization approach. Using the assumed financial structure set forth
in the previous calculations, market value can be allocated between the debt and
equity as follows.
Mortgage Component (70%) $ 2,198,000
Equity Component (30%) 942,000
-----------
Total $ 3,140,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $ 2,198,000
Mortgage Constant 0.111856
-----------
Annual Debt Service $ 245,859
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-28 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Net Income
Year Debt Service Debt Service to Equity
- --------------------------------------------------------------------------------
1997 $348,000 - $246,000 = $102,000
1998 378,000 - 246,000 = 132,000
1999 391,000 - 246,000 = 145,000
2000 401,000 - 246,000 = 155,000
2001 416,000 - 246,000 = 170,000
2002 428,000 - 246,000 = 182,000
2003 443,000 - 246,000 = 197,000
2004 456,000 - 246,000 = 210,000
2005 472,000 - 246,000 = 226,000
2006 485,000 - 246,000 = 239,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($502,000 / 0.120 ) $ 4,183,000
Less: Brokerage and Legal Fees 126,000
Less: Mortgage Balance 1,583,000
-----------
Net Sale Proceeds to Equity $ 2,474,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-29 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
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Total Property $3,140,000 14.4%
Mortgage 2,198,000 9.4
Equity 942,000 22.0
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $3,140,000 value is correct based on the assumptions
used in this approach.
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Table 10-30 Total Property Yield
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Net Income Before Present Worth of $1
Year Debt Service Factor at 14.4% Cash Flow
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1997 $348,000 x 0.873955 = $304,000
1998 378,000 x 0.763798 = 289,000
1999 391,000 x 0.667525 = 261,000
2000 401,000 x 0.583387 = 234,000
2001 416,000 x 0.509854 = 212,000
2002 428,000 x 0.445589 = 191,000
2003 443,000 x 0.389425 = 173,000
2004 456,000 x 0.340340 = 155,000
2005 472,000 x 0.297442 = 140,000
2006 4,543,000 * x 0.259951 = 1,181,000
----------
Total Property Value $3,140,000
* Tenth-year net income of $485,000 plus sales proceeds of $4,058,000
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Table 10-31 Mortgage Component Yield
- --------------------------------------------------------------------------------
Present Worth of $1 Discounted
Year Debt Service Factor at 9.5% Cash Flow
- --------------------------------------------------------------------------------
1997 $246,000 x 0.914195 = $225,000
1998 246,000 x 0.835752 = 206,000
1999 246,000 x 0.764040 = 188,000
2000 246,000 x 0.698481 = 172,000
2001 246,000 x 0.638547 = 157,000
2002 246,000 x 0.583757 = 144,000
2003 246,000 x 0.533667 = 131,000
2004 246,000 x 0.487876 = 120,000
2005 246,000 x 0.446013 = 110,000
2006 1,829,000 * x 0.407743 = 746,000
----------
Value of the Mortgage Component $2,199,000
* Tenth-year debt service of $246,000
plus outstanding mortgage balance of $1,583,000
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Table 10-32 Equity Component Yield
- --------------------------------------------------------------------------------
Net Income Present Worth of $1
Year to Equity Factor at 22.0% Cash Flow
- --------------------------------------------------------------------------------
1997 $102,000 x 0.819758 = $84,000
1998 132,000 x 0.672004 = 89,000
1999 145,000 x 0.550880 = 80,000
2000 155,000 x 0.451589 = 70,000
2001 170,000 x 0.370194 = 63,000
2002 182,000 x 0.303469 = 55,000
2003 197,000 x 0.248771 = 49,000
2004 210,000 x 0.203932 = 43,000
2005 226,000 x 0.167175 = 38,000
2006 2,714,000 * x 0.137043 = 372,000
--------
Value of the Equity Component $943,000
* Tenth-year net income to equity of $239,000 plus sales proceeds of $2,475,000
- --------------------------------------------------------------------------------
Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.42%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 6% to 18%, it is our opinion that a 14% discount factor is
appropriate for the Howard Johnson Commack. The following table illustrates the
discounted cash flow analysis using this 14% factor.
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Table 10-33 Discounted Cash Flow Analysis
- --------------------------------------------------------------------------------
Discount
Net Factor Discounted
Year Income at 14.0% Cash Flow
- --------------------------------------------------------------------------------
1997 $348,000 x 0.87719 = $305,263
1998 378,000 x 0.76947 = 290,859
1999 391,000 x 0.67497 = 263,914
2000 401,000 x 0.59208 = 237,424
2001 416,000 x 0.51937 = 216,057
2002 428,000 x 0.45559 = 194,991
2003 443,000 x 0.39964 = 177,039
2004 456,000 x 0.35056 = 159,855
2005 472,000 x 0.30751 = 145,144
2006 4,542,833 * x 0.26974 = 1,225,401
Estimated Market Value: $3,215,948
(Say): $3,200,000
Reversion Analysis
11th Year Net Income $ 502,000
Capitalization Rate 12.0%
Total Sales Proceeds $4,183,333
Less: Broker & Legal Fees at 3.0% 125,500
-----------
Net Sales Proceeds $4,057,833
* Tenth-year net income of $485,000 plus sales proceeds of $4,057,833
- --------------------------------------------------------------------------------
Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors. This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $3,140,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
--------
Property: Quality Inn
Location: Woodbury, New York
Date of Sale: August, 1995
Sales Price: $2,900,000
Grantor: The Estate of Frederick Phillips, et. al.
Grantee: Woodbury Realty Associates
Year Opened: 1961
Number of Rooms: 85
Price per Room: $34,118
Confirmed By: Goodman Marks Associates
Comments: This property is located on Jericho Turnpike
in Woodbury. The purchase price includes the
furniture, fixtures and equipment, and is
subject to a long-term lease for a restaurant
on the premises.
Sale #2:
--------
Property: Comfort Inn
Location: Abingdon, Virginia
Date of Sale February, 1995
Sales Price: $2,600,000
Grantor: B&R Enterprises
Grantee: MRS
Number of Rooms: 80
Price per Room: $32,500
Confirmed by: Broker
Sale #3:
--------
Property: La Plata Super 8 Motel
Location: 9400 Chesapeake Street, La Plata, Maryland
Date of Sale: May, 1996
Sales Price: $1,350,000
Grantors: Faisal J. and Bahjat Jodeh and Nidal Suleiman
Grantees: JAD, Inc.; Rahit K. and Rohet C. Patel
Year Opened: 1988
Number of Rooms: 45
Price per Room: $30,000
Confirmed By: Rahit K. Patel; Charles County Clerk; Charles
County Assessment Office
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Comments: This property house a typical three-story
Super 8 motel, which is reported to be in
good condition
Sale #4:
--------
Property: Quality Inn
Location: 6111 Arlington Blvd., Falls Church, Virginia
Date of Sale: September, 1995
Sales Price: $3,000,000
Grantor: Third Hotel Associates
Grantee: Virginia Hospitality Inc.
Year Opened: 1966
Number of Rooms: 108
Price per Room: $27,778
Confirmed By: Broker
Sale #5:
--------
Property: Ramada Inn
Location: Germantown, Maryland
Date of Sale: May, 1995
Sales Price: $5,350,000
Grantor: Goldenrod Limited Partnership
Grantee: Inn Keepers USA Limited Partnership
Year Opened: Not available
Number of Rooms: 180
Price per Room: $29,722
Confirmed By: Eastdil Corp.
Comments: This property was subsequently renovated and
converted to a Hampton Inn
Sale #6:
--------
Property: Days Inn
Location: 30 Wheeler Road, Burlington, Massachusetts
Date of Sale: June, 1995
Sales Price: $4,200,000
Grantor: The First National Bank of Boston
Grantee: Burlington Garden Level I, LP
Year Opened: 1969
Number of Rooms: 173
Price per Room: $24,277
Confirmed By: CB Commercial
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Comments: The buyers have spent approximately
$4,000,000 to convert the property to a
Wyndham Garden.
In addition to considering the transactions outlined above, we have also
reviewed the March, 1994 sale of the subject property. The details of this
transaction are summarized as follows.
Subject Property:
-----------------
Property: Howard Johnson - Commack
Location: Commack, New York
Date of Sale: March, 1994
Sales Price: $2,610,602
Grantor: Nippon Credit Bank, Ltd.
Grantee: Chartwell/G.S.R. Hotels III Limited
Partnership, an entity controlled by Ashford
Financial Corp.
Year Opened: 1971
Number of Rooms: 109
Price per Room: $23,950
Est. 1994 Occupancy: 55.1%
Est. 1994 Average Rate: $56.40
Est. 1994 Rev. PAR: $31.08
It is important to consider the terms and conditions pertaining to the subject
property's sale. The Howard Johnson was acquired by Ashford Financial
Corporation from Nippon Credit Bank, Ltd. in March of 1994 as part of a purchase
of a mortgage loan secured by 15 hotel properties. The outstanding principal
balance of the nonperforming mortgage loan at the time of acquisition was
$72,840,000, and the purchase price was $18,730,000. At the time of the closing,
the mortgage loan was the subject of a settlement agreement between Nippon
Credit Bank, Ltd. and Northeast Hotel Association, Inc., which owned the subject
property. The settlement agreement called for the conveyance of property deeds
in lieu of foreclosure as well as a cash payment of $2,000,000 for the
settlement of guaranty obligations. The price set forth above represents an
allocation of the total package price rather than a negotiated value for this
single asset. Based on our understanding of the terms of this transaction, we do
not believe that this sale was reflective of the market value of the individual
hotel.
The relevance of the transaction involving the subject property is also
undermined by the significant change in market conditions that occurred
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between the date of this sale and the date of value of this appraisal. Areawide
occupancy and average rate have improved in the intervening months, and this
favorable trend is expected to continue. As previously discussed, the market for
hotel investments has also improved significantly as a result of changes in
lender and investor attitudes. Finally, the property itself has undergone a
significant renovation, in which approximately $400,000 was spent to upgrade the
facilities and amenities. For these reasons, it is our opinion that the March,
1994 sale of the subject property is not a reliable indicator of the hotel's
current value.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property,
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the sales prices range from approximately $24,100 to $34,100 per room, or
$2,630,000 to $3,700,000 for the 109-unit subject property. The income
capitalization approach indicates a value of $3,140,000, which falls within this
range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount needed to
acquire a site and construct a building of equal desirability and utility
without undue delay. This approach estimates market value by first calculating
the current cost of replacing the improvements. Appropriate deductions are made
for depreciation resulting from physical deterioration, functional obsolescence,
and external (economic) obsolescence, and the land value is added to the
depreciated replacement cost to provide an estimate of market value. The cost
approach employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as a depressed market
for real estate, can cause a property to be worth less than its replacement cost
as new. The task of estimating the loss in value resulting from incurable
functional and external obsolescence is highly subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence becomes
increasingly difficult to quantify accurately. Loss in value
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attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1971, and thus is approximately 25 years
old as of the date of this appraisal. At the time of our inspection, the hotel
was in fair condition, and we note that its design includes interior corridors.
In addition to guestrooms, the Howard Johnson is equipped with a breakfast
lounge (where continental breakfast is served) and an outdoor swimming pool.
The depressed hotel market conditions that prevailed in the late 1980s and the
early 1990s have also led to a degree of external obsolescence. In our opinion,
it is impossible to identify and quantify the impact of the various types of
depreciation and obsolescence on the property's value with any accuracy, so we
will only estimate the hotel's replacement cost.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May issue
of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
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<S> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- - ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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<PAGE>
HVS International, Mineola, New York Cost Approach 129
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
- --------------------------------------------------------------------------------
Cost No. of
Hotel Cost per Room Rooms Total Cost
--------------------------------------------------------------------------
Building $35,000 109 $3,815,000
FF&E 8,000 109 872,000
Pre-Opening 2,000 109 218,000
Operating Capital 1,800 109 196,200
--------------------------------------------------------------------------
Totals $46,800 $5,101,200
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
<PAGE>
HVS International, Mineola, New York Cost Approach 130
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Howard Johnson Commack appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 4.0% and 5.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.5% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $ 1,614,040
Rental Percentage 0.045
-----------
Economic Ground Rent $ 72,632
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
<PAGE>
HVS International, Mineola, New York Cost Approach 131
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Economic Ground Rent $72,632 $ 726,318
------------------------ = ------------ =
Capitalization Rate 0.10
Estimated Land Value (Say) $ 730,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 23% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
- --------------------------------------------------------------------------------
Cost of the Improvements and FF&E $ 5,101,200
Land Value 730,000
-----------
Total Replacement Cost $ 5,831,200
(Say) $ 5,800,000
- --------------------------------------------------------------------------------
If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Howard Johnson Commack. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 132
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================================================================================
13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
-------- ----------------
Income Capitalization $3,140,000
Sales Comparison $2,630,000 - $3,700,000
Cost (Replacement Cost) $5,800,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 133
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate a value range of
$24,100 to $34,100 per available room. The income capitalization approach
indicates a per-room value of approximately $28,800. This information suggests
that a slight upward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. In the case of the subject property, the replacement cost is higher
than the value indicated by the income capitalization approach or the sales
comparison approach. This suggests that a slight
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 134
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upwards adjustment to the value indicated by the income capitalization approach
may be warranted.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the sales
comparison approach, the replacement cost estimate, and our extensive experience
in the hospitality industry. It is our opinion that the market of the fee simple
interest in the Howard Johnson Commack, as of January 1, 1997, is:
$3,200,000
THREE MILLION TWO HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $29,358 per room, which is well supported
by market sales and approximately 1.8% higher than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
<PAGE>
HVS International, Mineola, New York Reconciliation of Value Indications 135
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A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items. Our
inspection of the Howard Johnson Commack indicates that the personal property
and fixtures are in fair condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $8,000 per available room. Assuming an average useful
life of ten years and an effective age of seven years, the value of the
furniture, fixtures, and equipment currently in place is approximately $2,400
per room, or a total of $261,600. Hotels have both business and real estate
components; without the business expertise necessary to operate the facility, a
hostelry would have little real estate value. Because furniture, fixtures, and
equipment are essential to a hotel's income-generating ability and are seldom
removed from the property or sold separately, the separation of the personal
property component from the real property is not particularly meaningful.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(1)
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 136
Limiting Conditions
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================================================================================
14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 137
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 138
Limiting Conditions
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HVS
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 139
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================================================================================
15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Sean A. Hehir and Anne R. Lloyd-Jones personally inspected the
property described in this report; that Stephen Rushmore participated in
the analysis and reviewed the findings but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
<PAGE>
HVS International, Mineola, New York Certification 140
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
Sean A. Hehir
-------------------------------
Sean A. Hehir
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
Anne R. Lloyd-Jones
-------------------------------
Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
Stephen Rushmore
-------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property
[GRAPHIC OMITTED]
View of the Subject Property's lobby
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of a guestroom with jacuzzi at the Subject Property
[GRAPHIC OMITTED]
View of a guestroom with two double beds at the Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the guestroom corridor at the Subject Property
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
View of the breakfast lounge at the Subject Property
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Hampton Inn - Commack
[GRAPHIC OMITTED]
Hampton Inn - Islandia
<PAGE>
Howard Johnson B&B - Commack, NY
SMITHTOWN
SCHEDULE A
ALL THAT CERTAIN PLOT, PIECE, OR PARCEL OF LAND, SITUATE, LYING, AND BEING AT
COMMACK, TOWN OF SMITHTOWN, COUNTY OF SUFFOLK AND STATE OF NEW YORK BEING MORE
PARTICULARLY BOUNDED AND DESCRIBED AS FOLLOWS::
BEGINNING AT A POINT ON THE WESTERLY SIDE OF WICKS ROAD DISTANT 137.14 FEET
NORTHERLY FROM THE NORTHEASTERLY END OF A STRAIGHT LINE CONNECTING THE WESTERLY
SIDE OF WICKS ROAD WITH THE NORTHERLY SIDE OF LONG ISLAND EXPRESSWAY (VANDERBILT
MOTOR PARKWAY);
RUNNING THENCE SOUTH 83 DEGREES, 36 MINUTES, 00 SECONDS WEST 401.94 FEET TO A
POINT AND LAND NOW OR FORMERLY OF PAY-LESS MINI WAREHOUSE;
THENCE NORTH 4 DEGREES, 21 MINUTES, 00 SECONDS EAST ALONG LAST MENTIONED LAND
AND LAND OF RWS REALTY CORP. 548.36 FEET TO A POINT;
THENCE NORTH 83 DEGREES, 36 MINUTES, 00 SECONDS EAST ALONG LAST MENTIONED LAND
AND LAND NOW OR FORMERLY OF SUFFOLK COUNTY GIRL SCOUT COUNCIL, 264.47 FEET TO
THE WESTERLY SIDE OF MORELAND ROAD (WICKS ROAD);
THENCE ALONG THE WESTERLY SIDE OF MORELAND ROAD (WICKS ROAD) THE FOLLOWING TWO
COURSES AND DISTANCES:
1) SOUTH 10 DEGREES, 20 MINUTES, 10 SECONDS EAST 520.39 FEET TO A POINT;
2) SOUTH 4 DEGREES, 50 MINUTES, 30 SECONDS EAST 19.58 FEET TO THE POINT OR PLACE
OF BEGINNING.
TOGETHER WITH AN EASEMENT IN COMMON WITH OTHERS OVER THE FOLLOWING DESCRIBED
PREMISES FOR ACCESS TO AND FROM VANDERBILT MOTOR PARKWAY:
BEGINNING AT A POINT ON THE NORTHERLY SIDE OF LONG ISLAND EXPRESSWAY (VANDERBILT
MOTOR PARKWAY) DISTANT 123.57 FEET WESTERLY FROM THE SOUTHWESTERLY END OF A
STRAIGHT LINE CONNECTING THE NORTHERLY SIDE OF LONG ISLAND EXPRESSWAY WITH THE
WESTERLY SIDE OF WICKS ROAD;
RUNNING THENCE SOUTH 83 DEGREES, 36 MINUTES, 00 SECONDS WEST ALONG THE NORTHERLY
SIDE OF LONG ISLAND EXPRESSWAY 50 FEET;
THENCE NORTH 6 DEGREES, 24 MINUTES, 00 SECONDS WEST 170 FEET;
THENCE NORTH 83 DEGREES, 36 MINUTES, 00 SECONDS EAST 50 FEET;
THENCE SOUTH 6 DEGREES, 24 MINUTES, 00 SECONDS EAST 170 FEET TO THE NORTHERLY
SIDE OF LONG ISLAND EXPRESSWAY AND THE POINT OR PLACE OF BEGINNING.
EXCEPTING THEREFROM SO MUCH OF THE ABOVE DESCRIBED PREMISES THAT WAS CONVEYED TO
THE TOWN OF SMITHTOWN FOR THE WIDENING OF WICKS ROAD BY DEED DATED 8/23/72,
RECORDED 11/30/72 IN LIBER 7293 CP 187.
<PAGE>
HVS International, Mineola, New York Synopsis of Hotel Management Agreement
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Synopsis of Hotel Management Agreement
Date: May, 1994
Owner: Chartwell/G.S.R. Hotels III Limited Partnership
(Ashford Financial Corp.)
Manager: Remington Hotel Company
Premises: Howard Johnson Motor Lodge, Commack, New York
Term: 15 years
Renewal: Operator option for two successive periods of five
years
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: 1) Upon default by owner or manager
2) Upon death or incapacitation of Archie Bennett,
Jr., president of Remington Hotel Company
3) Upon a sale of the property (at the owner's option)
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 1
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The Simultaneous Valuation Formula as Used in the Valuation of the Subject
Property
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily. This process can be expressed in two algebraic equations
that set forth the mathematic relationships between the known and unknown
variables using the following symbols.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 2
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/S^n = Present worth of a $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (de) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 3
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b(NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b(NI^11/R(r)) - ((1 - P) x M x V) = d(r)
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 4
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = de^1
NI^2 - (f x M x V) = de^2
NI^10 - (f x M x V) = de^10
(NI^11/R(r)) - (b(NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M)V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M)V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M)V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V))1/S^1) + ((NI^2 - (f x M x V))1/S^2) + . . .
((NI^10 - (f x M x V))1/S^10) +
(((NI^11/R(r)) - (b(NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M)V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 5
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most instances, net
income before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1: Summary of Known Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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The following table illustrates the present worth of a $1 factor at the 22.0%
equity yield rate.
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 6
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Table 2: Present Worth of $1 Factor at Equity Yield Rate
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Present Worth of $1
Year Factor at 22.0%
---------------------------------------------------------------
1997 0.819758
1998 0.672004
1999 0.550880
2000 0.451589
2001 0.370194
2002 0.303469
2003 0.248771
2004 0.203932
2005 0.167175
2006 0.137043
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 x 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following.
( 348,000 - 0.078299 V ) x 0.819672 +
( 378,000 - 0.078299 V ) x 0.671862 +
( 391,000 - 0.078299 V ) x 0.550707 +
( 401,000 - 0.078299 V ) x 0.451399 +
( 416,000 - 0.078299 V ) x 0.369999 +
( 428,000 - 0.078299 V ) x 0.303278 +
( 443,000 - 0.078299 V ) x 0.248589 +
( 456,000 - 0.078299 V ) x 0.203761 +
( 472,000 - 0.078299 V ) x 0.167017 +
( 485,000 - 0.078299 V ) x 0.136899 +
((( 502,000 / 0.120 ) - ( 0.03 x ( 502,000 / 0.120 )) -
(( 1 - 0.279638 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula 7
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Like terms are combined as follows.
$2,123,053 - 0.376214 V = (1 - 0.70) V
$2,123,053 = 0.67621 V
V = $2,123,053 / 0.67621
V = $3,139,620
Value Indicated by the
Income Capitalization
Approach (Say) $3,140,000
<PAGE>
HVS International, Mineola, New York Qualifications of Sean A. Hehir
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INTERNATIONAL
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Sean A. Hehir
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility Reports,
and Investment Counseling)
Summer, 1996 THE HILTON AT SHORT HILLS
Short Hills, New Jersey
1995 to 1996 THE STATLER HOTEL AND JW MARRIOTT
EXECUTIVE EDUCATION CENTER
Ithaca, New York
1993 HOTEL DE CHAILLY
Montreux, Switzerland
1992 HOTEL BAUR AU LAC
Zurich, Switzerland
Education BS - School of Hotel Administration, Cornell University
University of Nevada at Las Vegas
Hotel Institute Montreux, Montreux, Switzerland
Professional Cornell Society of Hotelmen
Affiliations
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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HVS
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Howard Johnson
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Woburn, Massachusetts
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
December 31, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Howard Johnson
Woburn, Massachusetts
Ref. #9610283
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the Middlesex area.
Our report was prepared in accordance with, and is subject to, the requirements
of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and
the Uniform Standards of Professional Practice (USPAP), as provided by the
Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market of the fee simple interest in the
subject property described in this report, as of January 1, 1997, is:
$5,200,000
FIVE MILLION TWO HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Robert Wong
---------------------------------------------
Robert Wong
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
---------------------------------------------
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
---------------------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
RW: ARL-J: SR: dce
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HVS International, Mineola, New York Table of Contents
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Table of Contents
1. Executive Summary .......................................... 1
2. Nature of the Assignment ................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes and Neighborhood ............................. 7
4. Market Area Analysis ....................................... 22
5. Overview of External Forces Affecting the U.S. Lodging
Industry ................................................... 35
6. Lodging Market Supply and Demand Analysis .................. 51
7. Projection of Occupancy and Average Rate ................... 68
8. Highest and Best Use ....................................... 83
9. Approaches to Value ........................................ 85
10. Income Capitalization Approach ............................. 88
11. Sales Comparison Approach .................................. 125
12. Cost Approach .............................................. 132
13. Reconciliation of Value Indications ........................ 138
14. Statement of Assumptions and Limiting Conditions ........... 142
15. Certification .............................................. 145
Addenda
Photographs of the Subject Property
Photographs of the Competition
Legal Description
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Addenda (continued)
Synopsis of Franchise and License Agreements
Synopsis of Hotel Management Agreement
Synopsis of Restaurant Lease
Explanation of the Simultaneous Valuation Formula
Qualifications
Robert Wong
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Howard Johnson
Location: 1 Mack Road
Woburn, Massachusetts 01801
Date of Inspection: October 17, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
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Area: +/-5.2 acres, or +/-226,512 square
feet
Zoning: OP- Office Park
Assessor's Parcel Number: 28-70270-53982-0
Improvements Description
- ------------------------
Age: Constructed in 1972
Property Type: Full-service
Guestrooms: 100
Number of Stories: One and five stories
Food and Beverage Spud's Restaurant, currently leased to
an independent operator
Meeting Space: Four rooms, +/-4,431 square feet
Parking: +/-150 surface parking spaces
Summary of Value Parameters
- ---------------------------
Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six months to one year
Number of Years to Stabilize: Three
Stabilized Year: 1999
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HVS International, Mineola, New York Executive Summary 2
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Valuation Assumptions
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Mortgage Interest Rate: 9.5%
Amortization Period: 20 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22%
Terminal Capitalization Rate: 12%
Brokerage and Legal Fees: 3%
Holding Period: 10 years
Calculated Discount Rate: 14.4%
Estimates of Value
- ------------------
Income Capitalization Approach: $5,309,000
Sales Comparison Approach: $4,700,000 - $5,500,000
Cost Approach (Replacement Cost): $6,400,000
Market Value Conclusion: $5,200,000
Market Value Conclusion per Room: $52,000
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-226,512-square-foot (+/-5.2-acre) parcel improved with a 100-room,
full-service lodging facility known as the Howard Johnson, which opened in 1972.
In addition to guestrooms, the subject property contains a restaurant, which is
leased and operated by Home Fries, Inc., 4,431 square feet of meeting and
banquet space, an indoor swimming pool, and other facilities typically found in
a full-service transient lodging facility. The hotel is located in the
northwestern quadrant of the intersection formed by Montvale Avenue and
Interstate 93, in the southeastern section of the City of Woburn. Municipal
jurisdictions governing the property include the City of Woburn, the County of
Middlesex, and the State of Massachusetts. The hotel's civic address is 1 Mack
Road, Woburn, Massachusetts, 01801.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Woburn
area for the purpose of estimating the market value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
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HVS International, Mineola, New York Nature of the Assignment 4
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3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Ashford Financial Corporation and Remington Hotel
Company. Unless noted otherwise, we have inspected the competitive lodging
facilities and analyzed the sales summarized in this report, and our value
conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility).
Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(3) Hotels,
Motels and Restaurants: Valuations and Market Studies,(4) The
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
(3) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
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HVS International, Mineola, New York Nature of the Assignment 5
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Computerized Income Approach to Hotel/Motel Market Studies and Valuations,(2)
and Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations.(3)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
Ashford Financial Corporation, is presented in the Addenda to this report; the
appraisers assume no responsibility regarding the accuracy of this legal
description.
According to records maintained at the City of Woburn Tax Assessor's Office, the
subject property was previously owned by Northeast Hotel Associates. On February
28, 1994, the Chartwell/G.S.R. Hotels III, Limited Partnership (formed by Woburn
Massachusetts Hotel Limited Partnership) entered into a purchase agreement with
Nippon Credit Bank, Ltd., which held the mortgage loan on the subject property
and 14 other hotel properties. The closing of the sale of the mortgage loan took
place on March 25, 1994. The purchase price allocated to the subject property
was $2,698,482. Conveyance of the fee simple title to the subject property
occurred on or about August 25, 1994. The current ownership entity is Woburn
Massachusetts Hotel Limited Partnership, which is a wholly owned subsidiary of
Ashford Financial Corporation.
The subject property entered into a franchise agreement with Howard Johnson on
May 12, 1994; this agreement expires on May 11, 2009. The
(1) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(2) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(3) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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franchise affiliation of the subject property did not change upon the hotel's
acquisition by Woburn Massachusetts Hotel Limited Partnership.
The hotel is also subject to a management agreement with Remington Employers
Corporation; an abstract of this contract is presented as an Addendum to this
report.
For the purposes of this appraisal, we have assumed the continued ownership of
the subject property by Ashford Financial Corporation and the operation of the
property by Remington Employers Corporation as a Howard Johnson hotel.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six months
to one year to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Robert Wong and Anne Lloyd-Jones on
October 17, 1996.
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located in the northwestern quadrant of the intersection
formed by Montvale Avenue and Interstate 93, in the southeastern section of the
City of Woburn. Municipal jurisdictions governing the property include the City
of Woburn, the County of Middlesex, and the Commonwealth of Massachusetts.
According to the tax map provided by the City of Woburn Tax Assessor's Office,
the subject parcel measures approximately +/-226,512 square feet, or +/-5.2
acres. The site is roughly triangular in shape. The Aberjona River flows along
the site's eastern border; beyond the river is Interstate 93, a north/south
highway. Montvale Avenue extends along the southern boundary of the property. To
the west, the subject property is bounded by Mack Road. Adjacent to the north is
a parcel currently improved with an instrument manufacturing company; a
chain-link fence borders the northern property line. Primary vehicular access to
the property is provided by Mack Road.
The topography of the parcel is generally level, with no significant grading.
According to the Environmental Report prepared by Certified Engineering and
Testing Company and dated December 29, 1993, the subject site has been graded so
that the site's topography slopes gently upward to the northeast at an
approximate 2% grade. Overall, the size and topography of the subject parcel
appear well-suited for hotel use. The site appears to be fully developed, with
no excess land for expansion.
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Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purpose of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
which would affect its use or marketability.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is readily accessible to a variety of local, county, state, and interstate
highways.
The Howard Johnson is strategically located in proximity to the intersection of
two of Massachusetts' major roadways: Interstate 93 and Interstate 95 (known
locally as Route 128).
Interstate 93, which abuts the subject property, is a six-lane, limited-access,
divided highway that originates south of Boston and stretches north, eventually
connecting with Interstate 91 in northern Vermont, along the New
Hampshire-Vermont border. Interstate 93 is the primary north/south route
connecting Boston to points north; during the summertime this roadway is popular
with leisure travelers journeying between the Boston metropolitan area and New
Hampshire.
Interstate 95 (I-95) - a transnational highway connecting the City of Miami,
Florida in the south to the Maine-Canadian border to the north - also serves as
an important north/south artery serving the area. The subject property is
located approximately three-quarters of a mile southeast of the intersection of
Interstates 93 and 95. In the vicinity of the City of Woburn, I-95 extends in an
east/west direction. This highway has become a major commercial corridor, with
high-technology businesses proliferating along this route over the last decade.
State Route 128, which runs conjointly with I-95 in the greater Boston area,
serves a significant amount of interstate, inter-regional, and commutational
motorists. From the City of Woburn, State Route 128 extends in a northeasterly
direction to Gloucester at the far northeastern portion of the commonwealth.
Southward from the City of Woburn, State Route 128 (I-95) serves as an inner
beltway, partially encircling the western side of the City of Boston before
terminating near Dedham, where I-95 continues southward through Providence,
Rhode Island and along the eastern coast of the United States to Florida.
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Overall, by virtue of its location along Interstate 93 and its close proximity
to Interstate 95, regional access to the Howard Johnson is considered to be
highly favorable.
Local Access and Visibility
Visibility of the Howard Johnson from northbound Interstate 93 is only fair, due
to both the higher elevation of the interstate overpass as it crosses Montvale
Avenue and the mid-rise nature of the subject property's improvements.
Visibility from southbound Interstate 93, however, is good. The subject property
is not visible from Interstate 95, and motorists must exit this roadway and
follow I-93 south to reach the property.
The subject property is visible from Montvale Avenue. This roadway extends in an
east/west direction, originating in Stoneham to the east and terminating in
downtown Woburn to the west. To access to the subject property, motorists use
the Interstate 93-Montvale Avenue exit and travel westbound on Montvale Avenue
before making a right turn onto Mack Road, from which the subject property is
accessible.
Airport Access
Logan International Airport is located approximately 15 miles southeast of the
subject site. Access to the subject property is provided by Interstate 93.
Motorists travel on northbound I-93 and follow the same instructions as set
forth previously.
Access to Local Demand Generators
The Howard Johnson is situated proximate to the area's primary generators of
lodging demand, which range from retail distributors to high-technology firms.
The following table outlines some of these major demand generators and their
distance from the subject site.
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Table 3-1 Local Demand Generators
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Approximate Distance Approximate Driving
Demand Generator from Subject Site (in Miles) Time (in Minutes)
---------------- ---------------------------- -----------------
Marshalls 8 15
W.R. Grace 5 10
General Foods 8 15
Cummings Properties 5 10
Lechmere 8 15
Alpha Industries 5 10
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The subject parcel is proximate to the area's demand generators and is
well-suited for its use as a transient lodging facility.
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Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water City of Woburn
Electricity Boston Edison Co.
Telephone NYNEX
Sewer City of Woburn
Gas Boston Gas Co.
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Flood Zone
Possible locational hazards include flood potential. As indicated by the Federal
Emergency Management Agency (FEMA) panel number 250229 005 B, dated July 2,
1980, the subject property is located within Flood Zone B, an area between the
limits of 100-year and 500-year flood.
Seismicity
Information pertaining to the seismicity of the subject site was not provided to
the appraisers. We have assumed that the subject site is not situated in an area
of seismic danger.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by Ashford Financial Corporation, is presented in the Addenda to this
report.
Conclusion
The subject parcel appears well suited as the site of a transient lodging
facility. We have analyzed the issues of size, topography, access, visibility,
and the availability of utilities, and noted the following advantages and
disadvantages.
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Advantages
o The subject site consists of a smooth topography.
o A well-developed network of area and interstate highways exists in close
proximity to the subject property.
o All necessary utilities are available to the subject property.
o The subject site has good visibility from Montvale Avenue and southbound
Interstate 93.
Disadvantages
o Visibility from northbound Interstate 93 is fair.
o The subject property is not visible from Interstate 95.
o Logan International Airport is located 15 miles away from the subject
property, making airport access only fair.
The advantages exhibited by the subject site are all important characteristics
of a hotel location. Even though the subject parcel is not visible from
Interstate 95 and northbound Interstate 93, the advantages outweigh the
disadvantages, and we believe that the site is well-suited for hotel use.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by Ashford Financial
Corporation.
Howard Johnson is a full-service lodging facility containing 100 rentable units,
4,431 square feet of meeting and banquet space, a restaurant (which is currently
leased to an independent operator), an indoor swimming pool, and appropriate
back-of-the-house facilities. The one- and five-story property opened in 1972,
and is approximately 25 years old as of the date of this appraisal. The hotel
was acquired by Ashford Financial Corporation in March, 1994. At the time of
this acquisition, the hotel was in extremely poor condition. Subsequent to the
acquisition, the subject property was extensively renovated at an estimated cost
of $448,726. In scope, this renovation
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included the exterior of the building, public areas and the guestrooms. The
hotel is now judged to be in relatively good condition; management
representatives report that all building systems are in good working order. The
hotel is operated under a license agreement with Howard Johnson and reportedly
meets the standards for lodging facilities of that brand.
Based on our inspection and information provided by Ashford Financial
Corporation, the following table summarizes the facilities available at the
subject property.
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Table 3-3 Facilities Summary
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Opening Date 1972
Number of Buildings One
Exterior Facade Beige stucco finish
Entrance Walkway with Canopy
Guestroom Configuration:
King Beds 62 Units
Double/Doubles 36
Standard Single 2
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Total 100 Units
Corridors Double-loaded, interior
Food and Beverage Outlets Spud's Restaurant
Meeting and Banquet Rooms:
Waterford Ballroom 2,160 Square Feet
Tiffany Ballroom 1,560
Board Room A 480
Board Room B 231
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Total 4,431 Square feet
Parking Facilities Approximately 150 parking spaces
Recreational and Other Amenities Indoor swimming pool
Laundry:
Washers One Milnor, one Wascomat
Dryers Two Speed Queen
Self-Service One washer, one dryer
Elevators Two
Life Safety Systems Hardwired smoke detectors
Construction Details
Foundation Continuous Wall;
Poured Concrete Slab on Grade
Framing Steel; Concrete Block
Poured-in-Place Concrete
Exterior Walls Concrete Block; Reinforced Concrete
Roof Steel Deck; Asphalt Covering
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Property Exterior
The hotel structure is situated near the center of the subject parcel. Paved
parking areas accommodating approximately 150 vehicles are predominantly located
in the northern and southern sides of the hotel. A small parking area is also
situated along the eastern side of the subject parcel. Vehicular access to the
subject site is provided by three driveways located along the western boundary
of the subject parcel. After entering the site, guests proceed to the hotel's
main entrance, which is located on the eastern side of the hotel structure. The
subject property does not feature a porte cochere; however, a canopy extending
from the main entrance to the driveway shields guests from inclement weather
such as rain and snow. Service traffic can gain access to the loading dock by
entering the southernmost driveway and circling around the southern portion of
the subject parcel to the western side of the hotel.
Construction and Design
The Howard Johnson features two wings. The one-story commercial wing houses the
hotel's main lobby, meeting and banquet space, restaurant, swimming pool, and
most of the back-of-the-house space. To the north of the commercial wing is the
five-story guestroom tower, which contains the hotel's guestrooms and laundry
facility. An enclosed corridor connects the commercial wing to the guestroom
tower. Combining the two wings, the hotel structure's footprint measures
approximately 31,243 square feet.
The subject property features a continuous wall foundation, concrete slab floor
structure, and steel frame. The exterior walls are constructed of concrete block
and reinforced concrete and are finished in stucco. The roofs feature steel
decks and are covered with asphalt. Ownership capital expenditure reports
indicate that the roof over the meeting and banquet space was replaced in 1995,
and the roof over the restaurant was replaced in 1996. Overall, Management
representatives report that the building structure is in good condition, and our
inspection revealed no visible signs of damage.
Lobby
Situated in the northeastern corner of the commercial wing and immediately north
of the main entrance, the hotel's main lobby acts as the focal point of the
hotel and provides access to other areas of the property. Guests enter the main
entrance of the hotel and turn left to access the lobby. The front desk, which
consists of a three-sided, obtuse-angled counter, is located along the western
wall of the lobby. A seating area is situated in the eastern portion of the
lobby. On the northern side of the lobby is the corridor that connects the
commercial wing to the guestroom tower. Extending from the southern side of the
lobby are two, perpendicular corridors - one of which runs easterly and leads to
the hotel's swimming
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pool and two ballrooms, and the other which extends southerly towards the
hotel's restaurant and two small meeting rooms.
Renovated in 1996, the lobby features newly replaced carpeting, refinished vinyl
wallcovering, white ceiling tiles, and refurbished lighting and drapery. As a
result of the recent upgrades, the lobby is currently in good condition.
Food and Beverage Outlets
The subject property's food and beverage facility is currently leased to Hash
Browns, Inc., an operator of five restaurants in the northeast United States
known as Spud's Restaurant and Pub. Located in the southern portion of the
commercial wing, the restaurant serves lunch and dinner seven days a week and
handles the food and beverage component of the hotel's meeting and banquet
events as well as room service. A synopsis of the restaurant lease is included
as an Addendum to this report.
Meeting and Banquet Space
The subject property offers approximately 4,431 square feet of meeting and
banquet space, which is located in the commercial wing southeast of the lobby
area. The 2160-square-foot Waterford Ballroom is located near the center of the
commercial wing and can be partitioned into three separate rooms; the
1560-square-foot Tiffany Ballroom is situated east of the Waterford Ballroom and
can be divided into two smaller meeting rooms. Board Room A, which is situated
south of the Waterford Ballroom, offers 480 square feet of function space; the
231-square-foot Board Room B is located immediately south of the main entrance.
Although the hotel oversees and controls the booking of all meetings and events,
the food and beverage function is serviced by the restaurant. All of the hotel's
meeting and banquet space was renovated in 1994, including the installation of
new lighting, refinishing of walls, and the replacement of carpeting. At the
time of inspection, the subject property's meeting and banquet space was in good
condition, although some signs of wear and tear were apparent.
Guestrooms
The subject property features 100 guestrooms: 62 with king beds, 36 with two
double beds, and 2 with one double bed. Management reports that two rooms are
currently being converted to handicapped-accessible rooms, which will allow the
hotel to meet ADA requirements through the year 2000. Guestrooms in the subject
property's tower are double loaded. The hotel's guestrooms are standard in
configuration and feature one room that contains sleeping and working areas with
a bathroom situated to the left or
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right of the entrance to the room. Guestrooms are typically furnished with the
following items.
o One king, one double bed, or two double beds
o Dresser
o Desk with chair
o Color television with remote control
o Nightstand with alarm clock/radio
o Floor lamp and wall-mounted lamps
o Upholstered chair
o Standard touchtone telephone
o Closet with luggage rack
o Assorted artwork
o Full-length glass balcony doors leading to nonfunctional balconies
o Wall-to-wall carpeting
o Vinyl wallcovering
o Popcorn ceilings
The guest bathrooms feature a vanity with sink, a wall-mounted mirror, a
commode, and a combination shower-and-tub unit. Finishes include vinyl
wallcovering, tiled floors, and ceiling tiles. Twelve guestrooms feature
in-room, full Jacuzzis; an additional twelve rooms offer mini-whirlpool tubs in
the bathrooms.
Although the guestrooms were renovated in 1994, additional upgrades were
completed in 1996. The guestrooms received new carpeting, drapes, chair
upholstery, lamp shades, and artwork in 1996; additionally, case goods were
refinished. Plans for the remainder of 1996 include the installation of 21-inch
televisions, the replacement of bathroom floor tiles, the refinishing of the
walls in 27 bathrooms, and the replacement of ceiling tiles in half the
bathrooms. In 1997, the hotel plans to refinish guestroom walls with textured
paint, seal the balcony doors, re-tile the remainder of the bathrooms, repair
moisture damage in the wall areas near the HVAC units, and refinish the bathroom
walls.
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At the time of our inspection, the subject property's guestrooms appeared to be
in relatively good condition. However, despite the refinishing of case goods,
the guestrooms furniture appears outdated.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with carpet, vinyl
wallcovering, and a popcorn ceiling. The corridors were refinished in 1994 and
are currently in good condition. While each floor contains a housekeeping
closet, floors 2 and 4 offer ice machines and floors 1 and 5 feature soda
vending machines.
Recreational Amenities
The Howard Johnson features an indoor, heated swimming pool, which is located in
the northeastern portion of the commercial wing. The swimming pool area was
redecked in 1995, and the heat pumps were replaced in 1996. The greenhouse-like
structure that encloses the pool is in fairly good condition, with no leaks
reported in the roof. However, the swimming pool lining is slightly stained as a
result of the hard, local water supply.
Back-of-the-House Space
The subject property's back-of-the-house space is housed entirely on the first
floor. The hotel's administrative and sales offices are located near the
northwest corner of the commercial wing behind the front desk. The laundry and
housekeeping facility is located in the western wing of the guestroom tower. By
virtue of its location near the elevator core, the laundry facility's location
enhances efficient flow of housekeeping staff. The main kitchen is situated in
the southeast corner of the commercial wing, where it provides direct service
flow to the restaurant and the meeting and banquet space. Based on information
provided by management representatives, all of the subject property's operating
systems are in good working order.
Vertical Transportation
Vertical transportation in the five-story guestroom tower is provided by two
elevators and two stairwells. The two elevators are situated adjacent to each
other in the western end of the guestroom tower; one stairwell is located at
each end of the guestroom wing.
Heating, Ventilation, and Air Conditioning
The subject property's heating, ventilation, and air conditioning (HVAC) are
provided by individual, through-the-wall, electrical units for the guestrooms
and centralized, gas- and electrical-powered HVAC units for the public areas.
The guestroom HVAC units were newly installed in 1994. The property's management
indicate that all HVAC equipment is in good working condition.
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Fire Protection
The Howard Johnson's guestrooms and public areas feature hardwired smoke
detectors. However, the hotel's guestrooms are not serviced by a sprinkler
system. Given that the guestroom tower is five-stories tall, the lack of a
sprinkler system is highly disadvantageous and poses a life safety risk to the
hotel's guests.
Security
The subject property utilizes electronic door locks. Security is further
enhanced by restricted access through peripheral entrances to the hotel. Only
guests and service staff with electronically-coded key cards can gain access to
the hotel through exterior entrances located away from the lobby area. The
hotel's front desk is fully staffed 24 hours per day.
Asbestos
According to information provided by management representatives, there is no
asbestos present in the subject property's improvements; however, we have not
been provided with an asbestos report to confirm this assertion. The reader
should be advised that any costs associated with asbestos removal or containment
may have an unfavorable impact on the hotel's market value, and the estimate set
forth in this appraisal reflects our value conclusions prior to the deduction of
any such costs. We suggest that interested parties initiate an independent
analysis regarding current asbestos levels and the capital expenditures
necessary to remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
For the purposes of this appraisal, we have assumed that the subject property
will be maintained in its present condition throughout the assumed ten year
holding period. Specifically, it is assumed that hotel management will employ
standard preventive maintenance measures, and that a reserve for replacement
fund will be established which will fund the cost of any future necessary
capital expenditures.
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ZONING
According to the City of Woburn zoning regulations and map (dated April 19,
1985), the subject property is zoned as follows.
OP - Office Park
Conforming uses under this zoning designation include medical and professional
offices, restaurants, and retail and service uses in connection with a hotel or
motel. Hotels and motels require a special use permit under the OP zoning
classification. In the case of the subject property, a special use permit was
obtained; hence, the subject property appears to conform to local zoning
regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning ordinances, building codes, and
all other applicable regulations. Our zoning analysis should be verified before
any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property taxes can be based on the
value of the real property or the value of the personal property and the real
property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
The taxing jurisdiction governing the subject property assesses both real and
personal property. The assessed value ratio is reported to be approximately 100%
of market value. A review of the assessed values of six comparable hotels
located in the Woburn taxing jurisdiction reveals the following information.
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Table 3-4 Assessed Value of Comparable Hotels
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Number Total Assessment Assessment per Room
-------------------------- ---------------------
Hotel of Rooms Land Improvements Land Improvements
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Subject Property 100 $1,703,000 $1,747,000 $17,030 $17,470
Ramada Plaza Hotel 196 $1,816,000 $5,959,000 $9,265 $30,403
Crowne Plaza Hotel 345 $1,797,000 $15,192,000 $5,209 $44,035
Courtyard by Marriott 120 1,072,000 5,589,000 8,933 46,575
Red Roof Inn 159 2,845,000 2,836,000 17,893 17,836
Comfort Inn 100 852,000 2,562,000 8,520 25,620
Suisse Chalet 129 887,000 2,156,000 6,876 16,713
Source: City of Woburn Assessor's Office
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As indicated in the preceding table, the subject property's land value per room
ranked second behind that of the Red Roof Inn. The Red Roof Inn's and the
subject property's high land value can be attributed to their excellent
locations; each site is located near interstate exits and adjacent to desirable
commercial development. The subject property's improvements value per room
appears reasonable and is comparable to those of limited-service properties,
including the Red Roof Inn, Comfort Inn, and Suisse Chalet.
The Howard Johnson's personal property assessment totals $417,700. Based on a
total real and personal property assessment of $3,867,700 and a tax rate of
$23.09 per $1000 of assessment, the subject property's 1995/96 tax burden is
calculated as follows.
$3,867,700 X $0.02309 = $89,305
The following table illustrates the historical changes in the real and personal
property tax rates for the subject property's governing jurisdiction.
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Table 3-5 Tax Rates Applicable to the Subject Property
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Tax Rate per $1,000 Percent Change from
Year of Assessment Previous Year
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1991/92 $17.74
1992/93 19.39 9.3%
1993/94 20.16 4.0
1994/95 21.38 6.1
1995/96 23.09 8.0
Annual Compounded Rate 6.8%
Source: City of Woburn Assessor's Office
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Historically, the applicable tax rates have increased at an annual compounded
rate of 6.8%. For the purpose of this appraisal, and in recognition of the
potential for increases in the subject property's assessed value, we have
forecasted the subjected property's tax burden to increase at an annual rate of
6.0% for the first three projection years. From 2000 and beyond, property taxes
are projected to increase at the underlying rate of inflation of 3.5%.
Applying the projected increases to the1995/96 tax burden yields the following
forecast of property taxes for the subject property.
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Table 3-6 Forecast of Property Tax Expense (+000)
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1997 Stablized 1999 2000 2001
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Forecast Property Taxes $93 $99 $102 $106 $110
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section of the report
investigates the subject property's neighborhood and evaluates any pertinent
locational factors that could affect its occupancy, average rate, food and
beverage revenues, and overall profitability.
The neighborhood surrounding the subject property is characterized by commercial
development, consisting primarily of office buildings, high-technology
industrial companies, and retail outlets. The majority of these
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HVS International, Mineola, New York Description of the Land, Improvements, 21
Zoning, Taxes, and Neighborhood
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developments are located in the vicinity of the I-93/I-95 interchange, and are
directly accessible from the subject property. Some of the companies located at
this intersection are EDS, Alpha Industries, Inc., and Environmental Products
and Services, Inc. Several business are situated proximate to the subject
property. Unicorn Park is located east of the property and is tenanted by small
companies, many of which are financial, insurance, and real estate firms.
Cummings Park, a large business park situated approximately two miles northwest
of the subject property, features companies such as Elliott Corporation, Theta
Systems, the Access Group, and the Professional Development Group. Additionally,
restaurants and day care centers are housed within Cummings Park and a 347-room,
full-service hotel - the Crowne Plaza - is situated in close proximity.
The Aberjona River traverses the eastern margin of the subject site, past a
narrow zone of woods and weeds which comprise the eastern border. Beyond the
Aberjona River to the east are Interstate 93 and Unicorn Park.
To the immediate west of the subject property is a service station and an
architectural firm, Will-Bern Associates, Inc. The neighborhood further west of
the subject property is characterized by service stations and single- and
two-family housing units.
To the immediate north of the subject property is the office for Rainin
Instrument Company, Inc., an instrument manufacturing company. Situated further
north of the property are single- and two-family housing units.
The area immediately south of the subject property is characterized by
restaurants, retail stores, service stations, and offices. The restaurants in
the neighborhood include McDonald's, Friendly's, Primo's Steak Restaurant, and a
pancake outlet; these eateries are located in proximity to stores selling
woodcraft items and groceries.
Conclusion
The neighborhood surrounding the Howard Johnson appears well-suited for the
operation of a transient lodging facility. Major companies in the various
business developments, such as Cummings and Unicorn Parks, are located within
the subject property's vicinity. In addition, a number of restaurants and retail
stores are situated in the immediate vicinity of the subject property and
support the operation of a transient lodging facility.
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HVS International, Mineola, New York Market Area Analysis 22
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The market area encompassing the subject property can broadly be defined as the
Boston-Worcester-Lawrence-Lowell-Brockton Metropolitan Statistical Area (MSA).
The Boston MSA, the largest in the commonwealth, with roughly 64% of the total
population, is comprised of Suffolk, Essex, Middlesex, Norfolk, Plymouth, and
Worcester Counties.
More specifically, the subject property's market area can be described as
northern suburban Boston and the State Route 128 (I-95) corridor. For the
purpose of generally defining the geographical/economic boundaries within the
area, three major market areas exist within the greater Boston metropolitan
area: the Route 128 corridor, the Route 495 corridor, and the inner urban
market. The subject property is located in close proximity to the intersection
of Route 128 and Interstate 93.
Woburn's economy is closely tied to the trends occurring both in the central
Boston area and along Route 128's high-technology area. For this reason, the
market area analysis will include relevant data for both the City of Boston and
suburban Boston. In most cases, the Boston metropolitan area is the market for
which pertinent information on the economic and demographic trends that will
affect the subject property is available.
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[GRAPHIC OMITTED]
AREA MAP
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HVS International, Mineola, New York Market Area Analysis 23
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In the early to middle 1980s, the Massachusetts area underwent a period of
strong economic growth, often referred to as the "Massachusetts Miracle." This
period of economic success can be attributed to a boom in industrial and
high-technology manufacturing as well as to an increase in tourism and a sharing
in the rapid expansion of the national financial service industry. In the early
1990s, however, downturns in the computer and high-technology fields had a
negative impact on the area's economy. The area's economic problems were further
exacerbated by the difficulties on Wall Street and in the region's depository
institutions. As a result of the recent revival of the nation's economy as a
whole, however, Woburn's economy - as demonstrated by Smith Travel Research
statistics and the commercial developments planned for the City of Woburn - is
pulling out of its economic difficulties.
According to the Planning Department of the City of Woburn, an extensive
development project is scheduled to begin construction in 1998 or 1999, with
completion projected for the year 2001. The project is planned on a site roughly
five miles northwest of the subject property, on Commerce Way. According to city
officials, $10 million in state funds have been allocated for the project, and
170 acres of land have been zoned for business parks on the site. Moreover,
restaurants, a commuter rail stop, and a commuter parking garage are planned for
the site. The Logan Airport Bus Terminal and the train station providing access
to Boston will be relocated there as well. Plans are also being reviewed to
build an exit ramp from Interstate 93 that would lead directly into the proposed
development. Presently, the proposed site is a superfund site which is scheduled
for clean-up in 1997.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
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HVS International, Mineola, New York Market Area Analysis 24
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Population
Between 1980 and 1995, Middlesex County registered an average annual compounded
population growth of 0.2%, which was lower than the rates registered by the MSA,
the commonwealth, and the nation, which achieved rates of 0.5%, 0.4%, and 1.0%,
respectively. Between 1990 and 1995, population growth in the county, the MSA,
and the commonwealth slowed to 0.1%, 0.2%, and 0.1%, respectively, despite
increased population growth in the nation (1.1%). The slowed population growth
in Massachusetts can be attributed to the economic recession that gripped the
commonwealth in the early 1990s. Projections for the period 1995 to 2000 call
for a relatively slow rate of population growth for Middlesex County and
increased rates of growth for the MSA, the commonwealth, and the nation.
Population in Middlesex County is expected to increase by an average annual
compounded rate of 0.1%, while the MSA, commonwealth, and nation are anticipated
to increase by 0.4%, 0.3%, and 0.9%, respectively.
We find that the rate of population growth generally establishes a minimum rate
of increase for commercial hotel demand; this observation also holds true for
the meeting and convention segment if a majority of the meetings are
business-oriented.
Retail Sales
Retail sales in Middlesex County increased at a real average annual compounded
rate of 1.1% between 1980 and 1995, a level that was lower than the gains
registered by the MSA, at 1.6%, the commonwealth, at 1.4%, and the nation, at
1.9%. Between 1990 and 1995, the county, MSA and commonwealth experienced slower
retail sales growth as a result of the regional recession. During this period,
Middlesex County registered retail sales growth of 0.3%, while the Boston MSA
and Massachusetts experienced growth of 0.6% and 0.5%, respectively. Although
retail sales growth declined in these three areas, the nation achieved a higher
rate of growth of 2.5%.
Retail sales in all four areas of evaluation are projected to increase at lower
rates between 1995 and 2000. Retail sales in Middlesex County are projected to
increase at an average annual compounded rate of 0.1%, and the MSA,
commonwealth, and nation are expected to show average annual growth in retail
sales of 0.4%, 0.2%, and 0.9%. Overall, retail sales trends indicate slowing
economic growth in the subject property's market area as well as in the nation
as a whole.
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Personal Income
Between 1980 and 1995, total personal income in Middlesex County increased at an
average annual compounded rate of 2.7%, after adjustment for inflation. Growth
in personal income in Middlesex outpaced those of the MSA, commonwealth, and
nation, which experienced growth of 2.5%, 2.3%, and 2.3%, respectively. Although
slower growth was achieved between 1990 and 1995, projections call for improved
personal income growth in the next five years. Middlesex County is anticipated
to achieve real gains of 1.6% annually between 1995 and 2000. During the same
period, personal income in the MSA, the commonwealth, and the nation is
projected to increase at rates of 1.8%, 1.6%, and 2.3%, respectively. Overall,
the projected growth in total personal income is a favorable economic indicator
for businesses in Middlesex County.
In terms of per capita personal income, projections for Middlesex County
indicate a higher level than those anticipated for the Boston MSA, Massachusetts
and the United States. This relationship suggests that Middlesex County
residents will have more money available to spend on retail goods and services
than do typical Americans. This increased spending ability contributes to a
favorable environment for local commercial establishments, and restaurants in
particular. It should be noted, however, that personal income does not take into
account cost-of-living factors; as a result, it is possible for local residents
to have higher income levels without enjoying greater affluence if the cost of
necessities is greater than it is in other parts of the nation.
Work Force Characteristics
The greatest long-term historical employment growth in Middlesex County occurred
in the services and agricultural services sectors, which achieved growth rates
of 3.6% and 3.4%, respectively between 1980 and 1995. Between 1990 and 1995,
most of the sectors in the county experienced declines, with the exception of
services, agricultural services, and transportation, communications and
utilities sectors. The greatest drops occurred in the federal military,
manufacturing, and mining sectors. Overall employment decreased between 1990 and
1995 at an average annual compounded rate of 0.4% in Middlesex County.
Employment is expected to rebound slightly between 1995 and 2000, with total
employment forecasted to increase annually at 0.3%. The strongest gains in
employment are projected to occur in the mining and services sectors, which are
forecasted to increase at rates of 3.0% and 0.9%, respectively. These moderate
employment gains reflect stabilization of the local economy
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HVS International, Mineola, New York Market Area Analysis 26
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following the dramatic expansion in the 1980s and the recession that
characterized the early 1990s.
A favorable characteristic is the diversification of the MSA economy, with
services, trade, manufacturing, and government as the largest employment sectors
in 1995. Because the local economy is not tied to the prosperity of any single
sector, the impact of business cycles is somewhat cushioned. Furthermore, the
downturn in high-technology industries that occurred in the early 1990s resulted
in a diminished dependence on this industrial sector; nevertheless, the
high-technology firms in the region remain a dominant influence on the area's
economy.
The major employers in Woburn represent a cross-section of hotel demand
potential. Some are national in scope, while others operate on a more local
basis; some are engaged in manufacturing, and others are active in retail
distribution. The following table outlines some of the major employers in
Woburn.
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Table 4-1 Major Employers
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Number of
Firm Product Employees
--------------------------------------------------------
Marshalls Retail 600
W.R. Grace Retail 500
General Foods Food 200
Cummings Properties Commercial Real Estate
Source: Executive Office of Communications & Development
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Office Space
The City of Woburn is an industrial town containing a number of industrial parks
that are owned by both the public and private sectors. According to the Planning
Department of the City of Woburn, the 1995 vacancy rate for business parks in
the city is estimated at below 7%, an improvement over vacancy levels in recent
years that is attributable to the economic revival and the lack of new
construction. With the planned development on Commerce Way, city officials
anticipate significant growth in the future.
Highway Traffic
The subject property occupies a prominent location, proximate to the
intersection of Interstates 93 and 95. Access to the property is provided by
Interstate 93, via the Montvale Avenue exit. The amount of traffic passing
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through a market area can have a direct impact on commercial and leisure demand
and an indirect effect on meeting demand. At the time of preparing this
appraisal, no information on the volume of traffic entering or exiting the
Montvale Avenue exit ramps was available. According to representatives of the
Massachusetts Department of Transportation, the only information available is
the daily traffic counts on Interstate 93 in the vicinity of the intersection of
Interstates 93 and 95. For northbound Interstate 93, the latest statistics
available (for 1994) show 135,000 vehicles utilizing Interstate 93 daily; for
southbound Interstate 93, the latest count (in 1990) reveals 137,120 vehicles
per day.
As mentioned previously, given the proximity of Woburn to the City of Boston,
the latest developments in Boston do have some effect on the subject property's
market area. Major road construction is currently underway in the City of
Boston. The $7.7-billion Central Artery/Third Harbor Tunnel project -the largest
highway initiative in the history of the commonwealth - will replace the
six-lane, elevated section of the Central Artery (I-93) in downtown Boston with
a largely underground, eight- to ten-lane section extending from the Southeast
Expressway (I-93) to Charlestown. This project also involves extending I-90 (the
Massachusetts Turnpike) to Logan Airport via a new seaport access road that will
pass through commercial land in south Boston, and constructing a four-lane
tunnel across Boston Harbor. Completion of this project should improve access
between Logan Airport and downtown Boston dramatically. The project is expected
to double traffic capacity both through the city and across the harbor, thus
alleviating one of the most congested urban traffic areas in the nation and
providing the city with a safer and wider traffic configuration.
The Central Artery depression will create over 27 acres of new green space,
including the area abutting Atlantic Avenue. Work began in early 1994 on the
relocation of utility infrastructures and on wall construction near Quincy
Market to clear a path for the proposed project. Currently, work is occurring
below ground near South Station and Quincy Market to construct the tunnel
itself; the estimated completion date of the artery depression is late 1999.
The construction of the 1.3-mile third harbor tunnel began in 1992. According to
the Massachusetts Department of Transportation, the tunnel is currently open to
commercial traffic only, and should relieve some traffic congestion. The tunnel
is four lanes wide, doubling the present cross-harbor capacity to eight lanes.
Although it is unclear as to when the tunnel
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will permit passenger vehicles, it is hoped that the tunnel will enable
airport-bound drivers from the west and south, who comprise 70% of airport
traffic, to bypass downtown Boston and the existing Sumner and Callahan tunnels,
thereby alleviating traffic congestion to and from the city.
Airport Traffic
The main airport serving the City of Woburn is Logan International Airport,
located roughly 15 miles southeast of the subject property. The airport is
utilized by more than 40 major domestic airlines and international carriers that
offer non-stop service to the business centers of Europe and Asia. In 1995, the
airport served more than 24 million arriving and departing passengers, making it
the 10th busiest airport in the country for passenger service. The airport also
handled more than 800 million pounds of cargo and mail during the same year,
making it the 12th busiest airport in the country in terms of cargo service.
Currently, Logan International Airport is undergoing an expansion and upgrading,
which may continue until 2010. This $1.5-billion modernization program - known
as Logan 2000 - consists of roughly 30 projects, and is intended to ensure the
facility's economic contribution to the greater Boston area and the New England
region well into the 21st Century. According to the Massachusetts Port
Authority, the projects include improvements to the passenger terminals,
roadways, parking facilities, public transportation and passenger amenities.
Specifically, Terminal A will be replaced with a modern concourse to accommodate
wide-bodied jets, ultimately expanding the number of gates that can handle these
larger aircraft from 45 to 70. Terminal E will receive an expanded customs hall
to be located on what is now the Terminal E parking lot. While the old customs
facility could handle only 600 international passengers per hour, the new one
will be able to handle 3,000. In addition, a new central terminal will connect
to both the new Terminal A and the customs hall in Terminal E. The
aforementioned Boston Tunnel project will, upon completion, surface at the
airport, thereby significantly improving access to Logan.
The following table shows historical passenger counts at Logan International
Airport.
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Table 4-2 Logan International Airport Passenger Statistics
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Domestic
Domestic Jet Commuter International Total Percent
Year Passengers Passengers Passengers Passengers Change
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1986 18,640,863 1,233,531 2,058,686 21,933,080 --
1987 19,316,103 1,365,371 2,687,528 23,369,002 6.5%
1988 19,237,619 1,400,674 3,093,630 23,731,923 1.6%
1989 17,689,413 1,348,616 3,235,831 22,273,860 -6.1%
1990 17,968,410 1,550,837 3,358,944 22,878,191 2.7%
1991 16,585,359 1,771,873 3,092,911 21,450,143 -6.2%
1992 17,083,755 2,067,965 3,571,418 22,723,138 5.9%
1993 17,722,509 2,277,059 3,580,158 23,579,726 3.8%
1994 18,774,177 2,035,166 3,658,835 24,468,178 3.8%
1995 18,596,080 2,120,262 3,475,753 24,192,095 -1.1%
Average Annual Compounded Change 1986-1995 1.1%
Source: Massachusetts Port Authority, Aviation Department
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With 1.1% in average annual compounded growth, Logan International Airport has
not witnessed any strong growth in passenger count over the past ten years. The
number of domestic jet passengers has remained steady, while increases have been
achieved in the number of domestic commuter and international passengers. This
lack of strong growth is a consequence of the airport operating at capacity;
growth should occur in the future as the expansion projects at Logan
International Airport are completed.
Convention Center
The nearest convention center, the John B. Hynes Veterans Memorial Convention
Center, is located in the City of Boston. Because of the large number of hotels
located in the city, and Woburn's distance from downtown Boston, hotels in the
subject property's area do not enjoy significant overflow generated by the
convention center.
Tourist Attractions
Woburn is a historic site and contains a number of historic attractions,
including the Baldwin Mansion and the Count Rumford House. The majority of
leisure travelers who stay in Woburn, however, commute to Boston to visit the
city's numerous tourist attractions. The subject property's strategic location
along Interstate 93, which provides direct access to Boston, enhances its
ability to attract leisure travelers.
Boston is a popular destination because it offers a wide variety of visitor
attractions. The area's educational, medical, and scientific institutions are a
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HVS International, Mineola, New York Market Area Analysis 30
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magnet for scholars, researchers, and scientists. Visitors are attracted by
local sports teams and recreational activities. Numerous golf courses are
available in the outlying suburban area, and miles of Atlantic beaches are
located within a few miles of the city.
For cultural entertainment, Boston offers many museums, a planetarium, an
aquarium, and a variety of historic attractions. Visitors also enjoy symphony
concerts, opera, and the theater. The city offers ample restaurants.
Some of the most popular historic attractions include the Old South Church, the
Boston Tea Party Ship and Museum, Faneuil Hall, Quincy Market, the Boston
Massacre Site, the Old South Meeting House, the Bunker Hill Pavilion, Trinity
Church, the Paul Revere House, Boston Common, the U.S.S. Constitution, and the
Old North Church. Cultural attractions include the Museum of Fine Arts, the
Isabella Stewart Gardner Museum, and the world-famous Boston Pops. Other
attractions include Newbury Street, the John Hancock Observatory, and the New
England Aquarium.
There are 68 colleges and universities in the Boston metropolitan area with an
enrollment of approximately 275,000 students. Two out of three of the
undergraduates enrolled in Boston's most prestigious colleges and universities
(Boston College, Boston University, Harvard University, Massachusetts Institute
of Technology, Northeastern, and Tufts) come from areas outside Massachusetts.
These institutions generate strong leisure visitation during the weekends when
school is in session, and particularly during commencement and parents'
weekends. During the week, the schools and the medical hospitals host guest
lecturers, continuing educational seminars, and meetings and banquets, much of
which attract attendees who require overnight accommodations.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area has recovered from the recession of the early 1990s, with
economic growth stabilizing. With the planned development on Commerce Way, the
economy of the City of Woburn is anticipated to grow at a moderate pace.
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus may not calculate exactly.
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
Middlesex County 1980-1995 1,369.4 1,404.6 0.2%
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 5,348.9 5,754.9 0.5
State of Massachusetts 1980-1995 5,748.4 6,057.9 0.4
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
Middlesex County 1990-1995 1,398.3 1,404.6 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 5,688.4 5,754.9 0.2
State of Massachusetts 1990-1995 6,018.4 6,057.9 0.1
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
Middlesex County 1995-2000 1,404.6 1,410.3 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 5,754.9 5,874.5 0.4
State of Massachusetts 1995-2000 6,057.9 6,137.0 0.3
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
Middlesex County 1980-1995 8,547.6 10,122.4 1.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 33,570.2 42,615.7 1.6
State of Massachusetts 1980-1995 35,625.3 43,503.2 1.3
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
Middlesex County 1990-1995 9,987.3 10,122.4 0.3
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 41,364.4 42,615.7 0.6
State of Massachusetts 1990-1995 42,531.0 43,503.2 0.5
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
Middlesex County 1995-2000 10,122.4 10,148.1 0.1
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 42,615.7 43,528.2 0.4
State of Massachusetts 1995-2000 43,503.2 44,042.8 0.2
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Middlesex County 1980-1995 6,241.8 7,206.4 1.0
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 6,276.1 7,405.2 1.1
State of Massachusetts 1980-1995 6,197.4 7,181.2 1.0
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Middlesex County 1990-1995 7,142.4 7,206.4 0.2
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 7,271.7 7,405.2 0.4
State of Massachusetts 1990-1995 7,066.8 7,181.2 0.3
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Middlesex County 1995-2000 7,206.4 7,195.9 (0.0)
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 7,405.2 7,409.7 0.0
State of Massachusetts 1995-2000 7,181.2 7,176.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
Middlesex County 1980-1995 795.9 1,061.3 1.9
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 3,389.3 4,693.3 2.2
State of Massachusetts 1980-1995 3,709.2 5,043.2 2.1
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
Middlesex County 1990-1995 989.1 1,061.3 1.4
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 4,407.3 4,693.3 1.3
State of Massachusetts 1990-1995 4,750.3 5,043.2 1.2
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
Middlesex County 1995-2000 1,061.3 1,092.5 0.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 4,693.3 4,883.0 0.8
State of Massachusetts 1995-2000 5,043.2 5,221.0 0.7
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales Per Capita
Middlesex County 1980-1995 581.2 755.5 1.8
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 633.6 815.5 1.7
State of Massachusetts 1980-1995 645.2 832.5 1.7
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales Per Capita
Middlesex County 1990-1995 707.4 755.5 1.3
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 774.8 815.5 1.0
State of Massachusetts 1990-1995 789.3 832.5 1.1
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking Place Sales Per Capita
Middlesex County 1995-2000 755.5 774.7 0.5
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 815.5 831.2 0.4
State of Massachusetts 1995-2000 832.5 850.7 0.4
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
Middlesex County 1980-1995 22,135.6 32,881.8 2.7
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 80,572.5 116,135.5 2.5
State of Massachusetts 1980-1995 85,728.2 120,350.9 2.3
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 33
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Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income (+000,000)
Middlesex County 1990-1995 31,480.0 32,881.8 0.9
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 111,831.4 116,135.5 0.8
State of Massachusetts 1990-1995 116,527.4 120,350.9 0.6
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
Middlesex County 1995-2000 32,881.8 35,681.4 1.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 116,135.5 126,766.0 1.8
State of Massachusetts 1995-2000 120,350.9 130,482.7 1.6
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Middlesex County 1980-1995 16,164.0 23,409.0 2.5
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1980-1995 15,064.0 20,180.0 2.0
State of Massachusetts 1980-1995 14,913.0 19,867.0 1.9
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
Middlesex County 1990-1995 22,513.0 23,409.0 0.8
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1990-1995 19,660.0 20,180.0 0.5
State of Massachusetts 1990-1995 19,362.0 19,867.0 0.5
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Middlesex County 1995-2000 23,409.0 25,301.0 1.6
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH MSA 1995-2000 20,180.0 21,579.0 1.3
State of Massachusetts 1995-2000 19,867.0 21,262.0 1.4
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment - Middlesex County (+000)
Farm 1980-1995 2.8 1.6 (3.5)
Agriculture Services, Other 1980-1995 3.2 5.3 3.4
Mining 1980-1995 0.5 0.6 1.6
Construction 1980-1995 29.2 35.9 1.4
Manufacturing 1980-1995 202.4 139.3 (2.5)
Trans., Comm. & Public Utils. 1980-1995 27.7 30.3 0.6
Total Trade 1980-1995 161.5 182.7 0.8
Wholesale Trade 1980-1995 43.7 51.9 1.2
Retail Trade 1980-1995 117.8 130.8 0.7
Finance, Insurance, & Real Estate 1980-1995 41.1 51.5 1.5
Services 1980-1995 229.8 392.2 3.6
Total Government 1980-1995 95.8 87.3 (0.6)
Federal Civilian Govt. 1980-1995 15.0 15.3 0.1
Federal Military Govt. 1980-1995 14.4 11.6 (1.5)
State & Local Govt. 1980-1995 66.4 60.4 (0.6)
TOTAL 1980-1995 794.0 926.7 1.0
</TABLE>
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<PAGE>
HVS International, Mineola, New York Market Area Analysis 34
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================================================================================
Table 4-3 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment - Middlesex County (+000)
Farm 1990-1995 1.8 1.6 (1.3)
Agriculture Services, Other 1990-1995 5.1 5.3 0.5
Mining 1990-1995 0.7 0.6 (3.4)
Construction 1990-1995 38.3 35.9 (1.3)
Manufacturing 1990-1995 168.9 139.3 (3.8)
Trans., Comm. & Public Utils. 1990-1995 30.0 30.3 0.2
Total Trade 1990-1995 194.3 182.7 (1.2)
Wholesale Trade 1990-1995 58.8 51.9 (2.5)
Retail Trade 1990-1995 135.5 130.8 (0.7)
Finance, Insurance, & Real Estate 1990-1995 55.5 51.5 (1.5)
Services 1990-1995 358.1 392.2 1.8
Total Government 1990-1995 94.2 87.3 (1.5)
Federal Civilian Govt. 1990-1995 15.5 15.3 (0.2)
Federal Military Govt. 1990-1995 14.4 11.6 (4.2)
State & Local Govt. 1990-1995 64.4 60.4 (1.3)
TOTAL 1990-1995 946.9 926.7 (0.4)
Projected Employment - Middlesex County (+000)
Farm 1995-2000 1.6 1.5 (1.3)
Agriculture Services, Other 1995-2000 5.3 5.1 (0.4)
Mining 1995-2000 0.6 0.7 3.0
Construction 1995-2000 35.9 35.8 (0.0)
Manufacturing 1995-2000 139.3 134.7 (0.7)
Trans., Comm. & Public Utils. 1995-2000 30.3 30.2 (0.0)
Total Trade 1995-2000 182.7 181.5 (0.1)
Wholesale Trade 1995-2000 51.9 51.4 (0.2)
Retail Trade 1995-2000 130.8 130.2 (0.1)
Finance, Insurance, & Real Estate 1995-2000 51.5 52.8 0.5
Services 1995-2000 392.2 410.4 0.9
Total Government 1995-2000 87.3 88.3 0.2
Federal Civilian Govt. 1995-2000 15.3 15.4 0.1
Federal Military Govt. 1995-2000 11.6 11.7 0.2
State & Local Govt. 1995-2000 60.4 61.2 0.3
TOTAL 1995-2000 926.7 941.2 0.3
</TABLE>
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Subsequent sections of this economic study and appraisal will relate
these historical and projected growth trends to specific market
segments based on their propensity to reflect visitation. This
analysis will provide a basis for forecasting changes in room night
demand in the subject property's area.
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HVS International, Mineola, New York Overview of External Forces 35
Affecting the U.S. Lodging Industry
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5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 36
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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HVS International, Mineola, New York Overview of External Forces 37
Affecting the U.S. Lodging Industry
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
<PAGE>
HVS International, Mineola, New York Overview of External Forces 38
Affecting the U.S. Lodging Industry
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 39
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 40
Affecting the U.S. Lodging Industry
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
================================================================================
Table 5-1 Summary of Major Hotel Transactions
- --------------------------------------------------------------------------------
Year 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
- --------------------------------------------------------------------------------
In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in
<PAGE>
HVS International, Mineola, New York Overview of External Forces 41
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1994 and 1995. During the low-volume years, many sellers remained on the
sidelines waiting for values to increase before placing their properties on the
market. The jump in 1994 is attributable to a number of factors, including the
greater availability of mortgage funds, a return of institutional investors to
the market, and a resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 42
Affecting the U.S. Lodging Industry
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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HVS International, Mineola, New York Overview of External Forces 43
Affecting the U.S. Lodging Industry
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
- --------------------------------------------------------------------------------
Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- ------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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HVS International, Mineola, New York Overview of External Forces 44
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
<PAGE>
HVS International, Mineola, New York Overview of External Forces 45
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 46
Affecting the U.S. Lodging Industry
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Table 5-3 Hotel Valuation Index per Room
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valuation Index Per Room
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
- --------------------------------------------------------------------------------
The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
<PAGE>
HVS International, Mineola, New York Overview of External Forces 47
Affecting the U.S. Lodging Industry
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================================================================================
Table 5-4 Percent Change in the Hotel Valuation Index
- --------------------------------------------------------------------------------
Annual Percent Change
<TABLE>
<CAPTION>
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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HVS International, Mineola, New York Overview of External Forces 48
Affecting the U.S. Lodging Industry
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
<PAGE>
HVS International, Mineola, New York Overview of External Forces 49
Affecting the U.S. Lodging Industry
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is a good indication that hotel values will return to record levels in the
next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
<PAGE>
HVS International, Mineola, New York Overview of External Forces 50
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 51
Analysis
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================================================================================
6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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HVS International, Mineola, New York Lodging Market Supply and Demand 52
Analysis
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================================================================================
Table 6-1 Historical Room Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year to Date
-----------------
1989 1990 1991 1992 1993 1994 1995 1995 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 1,537 1,855 1,884 1,884 1,884 1,884 1,884 1,884 1,884
Annual Guestroom Supply 561,005 676,903 687,660 687,660 687,660 687,660 687,660 457,812 457,812
Percent Change -- 20.7% 1.6% 0.0% 0.0% 0.0% 0.0% -- 0.0%
Room Night Demand 399,997 411,557 409,158 429,100 446,979 475,173 479,299 315,432 325,047
Percent Change -- 2.9% (0.6)% 4.9% 4.2% 6.3% 0.9% -- 3.0%
Occupancy 71.3% 60.8% 59.5% 62.4% 65.0% 69.1% 69.7% 68.9% 71.0%
Percent Change -- (14.7)% (2.1)% 4.9% 4.2% 6.3% 0.9% -- 3.0%
Average Rate $ 81.07 $ 78.57 $ 71.27 $ 68.47 $ 67.25 $ 69.67 $ 74.60 $72.47 $ 80.73
Percent Change -- (3.1)% (9.3)% (3.9)% (1.8)% 3.6% 7.1% -- 11.4%
RevPAR $ 57.80 $ 47.77 $ 42.41 $ 42.73 $ 43.71 $ 48.14 $ 52.00 $49.93 $ 57.32
Percent Change -- (17.4)% (11.2)% 0.8% 2.3% 10.1% 8.0% -- 14.8%
</TABLE>
Average Annual Average Annual
Compounded Growth Compounded Growth
1989 - 1995 1992 - 1995
- -------------------------------------------------------------
Number of Rooms
Annual Guestroom Supply
Percent Change 3.5% 0.0%
Room Night Demand
Percent Change 3.1% 3.8%
Occupancy
Percent Change -0.4% 3.8%
Average Rate
Percent Change -1.4% 2.9%
RevPAR
Percent Change -1.7% 6.8%
The 347-room Crowne Plaza Hotel opened in February of 1990
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 53
Analysis
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
As indicated in the preceding table, room supply in the market area has remained
relatively stable in recent years. The only change to the room supply occurred
in 1990, when the 347-room Crowne Plaza opened. Because the Crowne Plaza opened
in February of 1990, an addition to the room supply of 318 rooms was reflected
in 1990, while the total 347 rooms was reflected in 1991. These additions
equated to increases in room supply of 20.7% and 1.6% in 1990 and 1991,
respectively.
With the exception of 1991, room night demand has shown increases in each year
since 1989. The 0.6% decrease in room demand in 1991 can be attributed to the
nationwide recession that occurred in that year as well as the Persian Gulf War,
both of which adversely affected travel. The market recovered in 1992, when
demand climbed by 4.9%, and continued to show growth in 1993 and 1994, when
demand increased by 4.2% and 6.3%, respectively. Although growth in demand
slowed to 0.9% in 1995, year-to-date data through August, 1996 indicates an
increase in demand of 3.0%. Between 1989 and 1995, room night demand increased
by an average annual compounded rate of 3.1%.
Although growth in demand has resulted in corresponding growth in occupancy
since 1992 (as a result of stable room supply), demand and supply dynamics
adversely impacted occupancy in 1990 and 1991. When the Crowne Plaza Hotel
opened in 1990, demand did not grow sufficiently to absorb the expansion in room
supply. As supply increased by 20.7%, demand only grew by 2.9%, resulting in a
severe decline in market occupancy of 14.7%. In 1991, occupancy decreased by
2.1% due to an 1.6% increase in room supply and a 0.6% decrease in room night
demand. Despite growth in demand in 1990 and in each year since 1992, the market
has not yet fully absorbed the addition of the Crowne Plaza Hotel, as indicated
by the 1995 market occupancy of 69.7%, which lags behind the 1989 occupancy
level of 71.3%. The overall drop in occupancy from 71.3% in 1989 to 69.7% in
1995 represents an average annual compounded decline of 0.4%. With year-to-
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 54
Analysis
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date 1996 data indicating a 3.0% increase in demand, occupancy appears to be
climbing near the 1989 occupancy level.
In response to the opening of the Crowne Plaza and the resulting decline in
occupancy, as well as the recession that occurred in 1991, hotels in the market
lowered rates in an effort to gain a competitive advantage and thus boost
occupancy. Average rate in the market declined in each year between 1990 and
1993, with the greatest decrease occurring in 1991, when average rate decreased
by 9.3%. As occupancy neared the 70% level in 1994 and 1995, average rate
increased by 3.6% and 7.1%, respectively. Year-to-date data indicates an 11.4%
average rate increase over the same period in 1995. Overall, average rate in the
market declined at an average annual compounded rate of 1.4% from 1989 to 1995.
Our analysis of STR indicates that while the market suffered a severe downturn
in the early 1990s - as a result of a dilution of demand from increased supply,
the national recession, and the Gulf Crisis - the area lodging market has nearly
recovered to 1989 levels. Room demand and occupancy demonstrated fairly strong
growth between 1992 and 1995, with both increasing at an average annual
compounded rate of 3.8%. Growth in average rate has followed demand and
occupancy growth. While average rate increased at an average annual compounded
rate of 2.9% from 1992 to 1995, the strongest growth has occurred since 1995,
with average rate increasing 7.1% in 1995 and 11.4% for year-to-date August,
1996.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the Woburn area
is generated primarily by the following three market segments.
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 55
Analysis
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Segment 1: Commercial
Segment 2: Meeting and Group
Segment 3: Leisure
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the 1996 distribution of accommodated hotel room night
demand as follows.
================================================================================
Table 6-2 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 194,000 68% 16,000 58%
Meeting and Group 38,000 13 3,000 10
Leisure 54,000 19 9,000 32
------- ---- ------ ---
Total 285,000 100% 28,000 100%
- --------------------------------------------------------------------------------
Commercial demand predominates in the local lodging market, accounting for
approximately 68% of the 1996 room night demand. Leisure demand follows the
commercial segment with a 19% share of room night demand, while meeting and
group demand contributes a relatively strong 13% of the estimated 1996 total.
The subject property's demand segmentation differs from that of the market to
some degree. Approximately 58% of the Howard Johnson's occupancy is derived from
the commercial segment. The leisure segment comprises 32% of the subject
property's demand, a share that is substantially higher than the market leisure
demand segment, and roughly 10% of the subject property's demand is generated
from the meeting and group segment. The subject property's relatively high
percentage of leisure demand is partially attributable to several factors: its
location next to a major interstate highway, its proximity to Boston, and the
existence of whirlpool baths in 24 of its guestrooms.
Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 56
Analysis
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Commercial Segment
The commercial segment consists of individual businesspeople who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. The typical length of stay ranges from one to
three days, and the rate of double occupancy is a low 1.2 to 1.3 people per
room. Commercial demand is relatively constant throughout the year, although
some declines are noticeable in late December and during other holiday periods.
In general, commercial travelers are not overly rate-sensitive, and will make
use of a hotel's food and beverage outlets and recreational facilities. The
commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
Commercial demand in the subject property's market is generated by a wide
variety of corporations, with the computer industry and other high-technology
employers exhibiting some dominance. Many of the companies are located in the
business parks situated along the Interstate 95 corridor and in the vicinity of
the I-93/I-95 interchange. Firms that generate lodging demand in the area
include Sybase, IBM, USA Today, AW Chesterton, Hewlett Packard, Lahey Hitchcock
Clinic, McDonnell Douglas, and Motorola. The subject property is located in
close proximity to Cummings and Unicorn business parks, which provide a strong
commercial demand base. Also providing demand is Hanscom Air Force Base, which
has increased its work force by roughly 300 people in recent years as a result
of personnel transfers from closed federal bases. As previously noted, the area
has suffered from the effects of defense cutbacks and the nationwide recession,
which curtailed commercial activity in the area in the early 1990s. However,
indications of a full economic recovery are evident with the proposed
IndustryPlex business park development on Commerce Way and the low commercial
vacancy rates in Woburn as indicated by city planning officials.
Based on the economic and demographic data presented earlier in the Market Area
Analysis section, we estimate that commercial hotel demand in the Woburn market
rose at rates ranging from 5% to 6% annually during the early 1980s, followed by
a period of decline as a result of the dramatic downturns which affected the
high-tech industries in the region. In conjunction with the recovery from the
national recession of the early 1990s and slower growth in the local economy,
commercial demand in the recent past has increased more moderately. As the
national and international economy continue to improve and prominent local
businesses increase
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 57
Analysis
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their production and employment levels, commercial hotel demand is expected to
grow steadily. Smith Travel Research estimates that total hotel demand in the
competitive market rose by an average annual compounded rate of 3.8% between
1992 and 1995. We project that commercial demand (which comprises approximately
68% of the total market) will increase by 3% in 1997. Thereafter, we project
continued commercial demand growth of 3% during 1998 and 1999 before stabilizing
at 2% annually in subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group demand in Woburn is generated primarily by local businesses
and includes functions such as training sessions, product announcements,
meetings, and seminars. Most of these meetings are small, and range from 15 to
20 persons. Non-commercial groups such as civic associations and professional
societies are a secondary source of meeting and group demand. Such meetings
often range from 75 to 250 persons. Most of the meetings and group functions in
Woburn are held at local hotels. Because the subject property offers only
+/-4,400 square feet of meeting space, participation in this segment is
inherently limited.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 58
Analysis
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business purpose, the economic considerations that have an impact on commercial
travel also affect meeting and group demand. The exception is non-commercial
meetings, which are tied to the economic factors that influence leisure travel.
It should be noted that meetings and similar events are booked in advance, and
thus growth in this segment tends to lag slightly behind increases in commercial
demand.
Historically, meeting and group demand in the Woburn area is estimated to have
increased at a rate slower than the overall average annual compounded rate of
3.8% achieved by the market. In light of this information and the relevant
economic and demographic trends, we estimate that meeting and group demand in
the subject property's market area will increase by a stable rate of 2%
annually.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They often prefer low-rise accommodations where parking is convenient to
the rooms, and they typically demand extensive recreational facilities and
amenities. Ease of highway access and proximity to tourist attractions are
important locational considerations. Leisure demand in the subject property's
market is generated by travelers who stay in Woburn to visit local attractions
or by travelers who are visiting Boston but select lodging accommodations in
Woburn. These travelers are generally drawn to the Woburn market area by its
proximity and ease of access to the many tourist attractions in the Boston area,
together with the availability of significantly lower rates than those charged
by hotels in the city itself.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 59
Analysis
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visitation. Traffic counts on nearby highways and attendance at local
attractions can also form a basis for projections.
Although Middlesex County residents enjoy considerable disposable income, there
are few leisure attractions in the subject property's immediate neighborhood. In
addition, the ongoing construction at Logan Airport and on Boston's highways is
anticipated to create traffic congestion and cause travel inconveniences;
therefore, we do not anticipate significant growth in this segment. In light of
these factors and the overall commercial orientation of the area, we estimate
that future leisure demand will increase at a rate of 1% throughout the
projection period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rate
------------------------------------------------------
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------
Commercial 3.0% 3.0% 3.0% 2.0% 2.0% 2.0%
Meeting and Group 2.0 2.0 2.0 2.0 2.0 2.0
Leisure 1.0 1.0 1.0 1.0 1.0 1.0
Annual Average Growth 2.5% 2.5% 2.5% 1.8% 1.8% 1.8%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. The suburban region of the greater
Boston metropolitan area is served by a wide array of lodging facilities. In
general, these hotel are situated near or within the larger concentration of
office space and/or along the major highways which serve the
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HVS International, Mineola, New York Lodging Market Supply and Demand 60
Analysis
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region. The subject property is located along Interstate 93, approximately 1.5
miles south of Interstate 95. In this location, the subject Howard Johnson
competes with other hotels situated along Interstates 95 and 93 for demand
generated by the businesses located along these corridors.
We have identified five properties that are considered primarily competitive
with the Howard Johnson. Including the subject property, these primary
competitors total 816 rooms. Four additional lodging facilities are judged to be
only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The room count of each secondary competitor has been weighted to reflect the
degree to which it competes with the Howard Johnson; the aggregate weighted room
count of the secondary competitors is 296 rooms.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
penetration factors; penetration is the ratio between a specific hotel's
operating results and the corresponding data for the market. If the penetration
factor is greater than 100%, the property is performing better than the market
as a whole; conversely, if the penetration is less than 100%, the hotel is
performing at a level below the marketwide average.
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================================================================================
Table 6-4 Primary Competitors and Aggregate Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995
------------------------ ---------------------------
Number Year Meeting Meeting Meeting Average
Property/Location of Rooms Opened Space Space/Room Comm. & Group Leisure Occupancy Rate Rev PAR
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subject Property
1 Mack Road 100 1972 4,431 44 58 % 10 % 32 % 68.6 % $58.69 $40.26
Ramada Plaza Hotel
15 Middlesex Canal Park 196 1974 5,328 27 50 35 15 60.0 51.00 30.60
Red Roof Inn
19 Commerce Way 159 1974 Minimal N/A 75 5 20 73.0 55.00 40.15
Suisse Chalet
285 Mishawum Road 129 1984 Minimal N/A 70 10 20 60.0 50.00 30.00
Comfort Inn
315 Mishawum Road 100 1975 Minimal N/A 70 5 25 68.0 56.00 38.08
Howard Johnson Burlington
98 Middlesex Turnpike 132 1968 Minimal N/A 75 5 20 69.0 69.00 47.61
- -----------------------------------------------------------------------------------------------------------------------------
Sub-Totals and Averages 816 66 % 13 % 21 % 66.0 % $56.37 $37.22
Secondary Competition 296 73 % 14 % 13 % 73.0 % $91.13 $66.52
Totals/Averages 1112 68 % 13 % 19 % 67.9 % $66.31 $45.00
<CAPTION>
Estimated 1996
---------------------------------------------------------
Average Occupancy Yield
Property/Location Occupancy Rate Rev PAR Penetration Penetration
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Subject Property
1 Mack Road 74.0 % $65.00 $48.10 105.5 % 96.0 %
Ramada Plaza Hotel
15 Middlesex Canal Park 61.0 62.00 37.82 86.9 75.5
Red Roof Inn
19 Commerce Way 75.0 52.00 39.00 106.9 77.8
Suisse Chalet
285 Mishawum Road 63.0 51.00 32.13 89.8 64.1
Comfort Inn
315 Mishawum Road 67.0 57.00 38.19 95.5 76.2
Howard Johnson Burlington
98 Middlesex Turnpike 69.0 75.00 51.75 98.3 103.2
- -------------------------------------------------------------------------------------
Sub-Totals and Averages 67.7 % $60.16 $40.71 96.4 % 81.2 %
Secondary Competition 77.0 % $98.74 $76.03 109.7 % 151.7 %
Totals/Averages 70.2 % $71.44 $50.12 100.0 % 100.0 %
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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HVS International, Mineola, New York Lodging Market Supply and Demand 62
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Our survey of the primarily competitive hotels in the Woburn market shows a
representation of nationally recognized, franchised lodging chains. These
properties range in size from 100 to 196 rooms, and their ages range from 12 to
28 years old. The market demand has a commercial orientation; in 1996, this
segment is estimated to contribute 66% of the overall occupancy. The leisure
segment comprised 21% of the total, followed by the meeting and group segment
(at 13%). In 1996, the primary competitors achieved an overall occupancy of
67.7% at an average rate of $60.16, yielding RevPAR of $40.71.
The subject property outperforms the market in terms of occupancy, average rate,
and RevPAR, placing second among the primary competitive set in each category.
The Red Roof Inn generates the greatest occupancy, with an estimated 1996
occupancy of 75% and an occupancy penetration of 106.9%, followed by the subject
property at 74% and 105.5%, respectively. The Howard Johnson Burlington leads
the primary competitive set in terms of average rate (1996 average rate of $75),
due to its highly favorable location on Interstate 95, which allows the property
to capture more commercial demand. The subject property places second with a
1996 average rate of $65. As a result of its strong average rate, the Howard
Johnson Burlington outperforms the competitive set in terms of RevPAR, as
indicated by its yield penetration of 103.2. The Suisse Chalet is the poorest
performer in the market; this property's low occupancy and average rate can be
attributed to its less-recognized brand name and its greater distance from an
I-95 exit in comparison to its competitors.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
Ramada Plaza Hotel
The Ramada Plaza Hotel, a full-service hotel located off Interstate 95, was
purchased by Ashford Financial Corporation in October of 1994 as a Ramada Inn.
Reportedly, at the time of the sale, the hotel was in poor condition. The
property underwent renovations in 1995, including upgrades to the guestrooms,
lobby, and public space, and was recently upgraded to a Ramada Plaza Hotel.
Currently managed by Remington Employers Corporation, the property's facilities
include 196 rooms, a restaurant, a lounge, over 5,300 square feet of meeting
space, an indoor heated swimming pool, and health facilities. It should be noted
that the Ramada Plaza Hotel is presently owned and managed by the same entities
as the subject property.
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HVS International, Mineola, New York Lodging Market Supply and Demand 63
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Located approximately two miles northwest of the subject property, the Ramada
Plaza Hotel features fair visibility from northbound Interstate 95 due to the
low-rise nature of the property; the property is not visible from southbound
I-95. In terms of occupancy and average rate, the property has improved since
the renovations, but is still underperforming in comparison to its competitors.
The 1996 occupancy and average rate is estimated to be 61% and $62. The Ramada
Inn derives approximately 50% of its room night demand from commercial business,
35% from the meeting and group segment, and 15% from leisure travelers.
Red Roof Inn Woburn
The Red Roof Inn is strategically located near the intersection of Interstates
93 and 95, less than two miles north of the subject property. Formerly a Days
Inn, the property was acquired by Red Roof, Inc. in November of 1995. The new
owner subsequently renovated the property, including the removal of the
restaurant and meeting and banquet space, the refurbishing of the guestrooms,
and the upgrading of the exterior. The property features 159 guestrooms, one
meeting room with a maximum capacity of 25 people, and an indoor, heated
swimming pool. The adjacent land where the former restaurant and function space
were situated is being leased to a national restaurant company which is
currently constructing On the Border, a restaurant that will feature Mexican
cuisine.
Although management representatives report a loss of some corporate contract
business as a result of the conversion from a Days Inn to a Red Roof Inn, the
property is expected to maintain its leading occupancy position in the primary
competitive set of hotels. Although visibility of the property from Interstate
95 is poor, access to the property is favorable due to its close proximity to
the interstate exit. We estimate the property's occupancy to be 75% and its
average rate to be $52 for 1996. In addition, we estimate that the property
derives 75% of its demand from the commercial segment, followed by 20% from the
leisure segment, and 5% from the meeting and group segment.
Suisse Chalet Woburn
The Suisse Chalet is owned by Telahc Properties L.P. and managed by Suisse
Chalet International, Inc. Like the Red Roof Inn, this property is located near
the I-93/I-95 interchange. In addition, this property is situated in close
proximity to the Logan Airport Bus Terminal and the Boston commuter train
station. According to management representatives, the hotel underwent a $400,000
renovation of the guestrooms and hallways in 1994 and a $30,000 upgrading of its
lobby in 1995. As a result, the facilities are
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HVS International, Mineola, New York Lodging Market Supply and Demand 64
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comparable to those found in the competitive hotels. The facilities at the
Suisse Chalet include 129 guestrooms and an outdoor swimming pool.
Visibility of the Suisse Chalet from Interstate 95 is excellent, however, access
to the property is less favorable than the Red Roof Inn and the Comfort Inn,
both of which are situated closer to the interstate exit. The 1996 occupancy and
average rate is estimated to be 63% and $51, respectively. We estimate that 70%
of the property's demand is generated from the commercial segment, 10% from the
meeting and group segment, and 20% from leisure travelers.
Comfort Inn Woburn
The Comfort Inn is located across from the Red Roof Inn, in close proximity to
the Suisse Chalet. The leasehold interest of the property was sold to
Innkeepers, Inc. in August of 1996 from 128 Motel Corp. The property is
scheduled to be converted to a Hampton Inn and will close in November, 1996 for
approximately eight months for renovations. Facilities at the Comfort Inn
include 100 rooms, a restaurant, and a lounge. Visibility of the property is
excellent from I-95 and access is highly favorable.
With the planned renovations and the reflagging of the property to a Hampton Inn
(a strong, highly recognized brand), the property should be able to improve its
position in the market. The property's 1996 occupancy and average rate are
estimated to be 67% and $57, respectively. We estimate that the property derives
70% of its room night demand from commercial travelers, 25% from leisure demand,
and 5% from group and meeting attendees.
Howard Johnson Burlington
The Howard Johnson Burlington is located on Middlesex Turnpike, opposite the
Burlington Mall in the City of Burlington, approximately six miles west of the
subject property. The property is owned and managed by the Crystal Group and
features 132 guestrooms, a restaurant, a lounge, a swimming pool, and a fitness
room. Although the property is the oldest of the primary competitive set,
continual maintenance and upgrading of the guestrooms has allowed the property
to remain highly competitive. The current franchise agreement expires within two
years and management representatives report that it has not been decided whether
the Howard Johnson brand will be retained. Although this property ranks as one
of the top performing Howard Johnsons in the country, ownership and management
are concerned about the brand's reputation and appeal, especially with young
corporate professionals. Reportedly, HFS has offered the
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HVS International, Mineola, New York Lodging Market Supply and Demand 65
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property interest-free financing for funds to completely renovate the property's
interior and exterior.
Visibility of the Howard Johnson from Middlesex Turnpike is excellent because
the property is situated on a slope above the grade of the road. We estimate the
property's occupancy and average rate to be 69% and $75, respectively, in 1996.
The property's demand segmentation consists of 75% commercial demand, 20%
leisure, and 5% meeting and group demand.
Secondary Competitors
The subject property's secondary competitors consist of four hotel properties,
all of which feature higher room rate structures and more extensive amenities.
One of the properties is the 120-room Courtyard by Marriott, which is situated
just west of the Suisse Chalet and targets higher end corporate travelers. Three
of the secondarily competitive properties are full-service hotels, consisting of
the 345-room Crowne Plaza Hotel located approximately one mile north of the
subject property along Interstate 93, the 419-room Marriott Burlington situated
near I-95 less than one mile east of the Howard Johnson Burlington, and the
180-room Wyndham Garden Hotel located just southeast of the I-95 Middlesex
Turnpike intersection.
The three full-service properties are considered to be 25% competitive, while
the Courtyard is considered to be 50% competitive with the subject property. The
secondary competitors are estimated to capture 73% of their demand from the
business travelers, 14% from meeting and group attendees, and 13% from leisure
travelers.
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================================================================================
Table 6-5 Secondary Competitors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation Estimated 1995 Estimated 1996
Weighted ----------------------- -------------------------- --------------------------
Number Percentage Number Meeting Average Average
Property of Rooms Competitive of Rooms Comm. & Group Leisure Occupancy Rate Rev PAR Occupancy Rate Rev PAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Crowne Plaza Hotel 345 25 % 86 70 % 15 % 15 % 63 % $ 84.00 $52.92 73 % $ 90.00 $65.70
Courtyard by Marriott 120 50 60 80 5 15 83 85.00 70.55 81 92.00 74.52
Marriott Burlington 419 25 105 70 20 10 77 104.00 80.08 82 111.00 91.02
Wyndham Garden Hotel 180 25 45 75 10 15 69 80.00 55.20 68 93.00 63.24
- ------------------------------------------------------------------------------------------------------------------------------------
Totals/Averages 1064 296 73 % 14 % 13 % 73 % $ 91.13 $66.52 77 % $ 98.74 $76.03
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Lodging Market Supply and Demand 67
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Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have identified one property that is proposed or under development
in the Woburn area.
It is reported that a 101-room Sierra Suites will be developed on 827 Main
Street, just north of Interstate 95. The Woburn Planning Department reports that
approval of the project appears favorable and that construction should start in
Spring of 1997, with the opening of the hotel slated for the Summer of 1998.
Based on the extended stay nature of the Sierra Suites product, the proposed
property's distance from the subject property, and the higher rate structure of
the proposed property, it is our opinion that the Sierra Suites will be 40%
competitive with the subject property.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market has shown signs of recovery from 1992 onwards, corresponding to
the economic recovery nationwide. According to Smith Travel Research, these
growth patterns have continued through August of 1996. While supply has remained
constant over recent years, growth in demand has driven occupancy upwards,
allowing the hotels in the market to follow with average rate increases.
Based on our review of the local area, three market segments were defined within
the subject property's lodging market. Growth rates for each market segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period.
We have identified five properties that are considered competitive with the
subject hotel. The subject property has outperformed the overall market in the
past in terms of occupancy, average rate, and RevPAR. Despite the completed and
planned renovations scheduled at the majority of the competitive hotels, with an
improved product and a strong marketing focus, we anticipate that the subject
property will remain highly competitive in the market. We have also identified
one proposed property in the area; however, due to the nature of the proposed
product, we have deemed it to be only moderately competitive with the subject
property.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
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================================================================================
Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year to Date
------------------------
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 72.0 % 68.6 % 64.2 % 72.7 %
Percent Change -- (4.7) % -- 13.3 %
Occupancy Penetration 104.2 % 98.4 % 93.2 % 102.4 %
Average Rate $ 51.85 $ 58.69 $ 56.76 $ 64.19
Percent Change -- 13.2 % -- 13.1 %
Average Rate Penetration 74.4 % 78.7 % 78.3 % 79.5 %
RevPAR $ 37.33 $ 40.26 $ 36.45 $ 46.69
Percent Change -- 7.8 % -- 28.1 %
RevPAR Penetration 77.5 % 77.4 % 73.0 % 81.4 %
Areawide (STR)
Occupancy 69.1 % 69.7 % 68.9 % 71.0 %
Percent Change -- 0.9 % -- 3.0 %
Average Rate $ 69.67 $ 74.60 $ 72.47 $ 80.73
Percent Change -- 7.1 % -- 11.4 %
RevPAR $ 48.14 $ 52.00 $ 49.93 $ 57.32
Percent Change -- 8.0 % -- 14.8 %
- --------------------------------------------------------------------------------
Since 1994, the subject property has focused on increasing RevPAR. In 1995, in
an effort to increase its RevPAR, the Howard Johnson sacrificed occupancy in
return for higher average rate. As indicated in the above table, occupancy for
the subject property declined by 4.7% in 1995, while occupancy for the area
increased slightly by 0.9%; this resulted in a drop in the subject property's
occupancy penetration from 104.2% in 1994 to 98.4% in 1995. However, the subject
property substantially boosted average rate by 13.2% in 1995, which contributed
to an increase in RevPAR of 7.8%. Because the competitive hotels as a whole
experienced increases in both occupancy and average rate, areawide RevPAR
climbed by 8.0%, or 0.2% above that of the subject property. Therefore, the
subject property's RevPAR penetration declined slightly by 0.1%.
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Based on year-to-date data through August, 1996, the Howard Johnson has shown
significant improvement in its ability to capture demand and increase room
rates. Occupancy, average rate, and RevPAR have increased at higher rates than
those experienced by the competitive set of hotels. While the area has shown a
3.0% occupancy increase in 1996 over 1995, the subject property has increased
occupancy by 13.3%, which has boosted occupancy penetration from 93.2% in 1995
to 102.4% in 1996. At the same time, the Howard Johnson has continued its upward
pressure on room rates, as indicated by its 13.3% increase in average rate in
1996. In comparison, the area has shown a 11.4% increase in average rate in
1996. The combined effects of occupancy and average rate changes for the subject
property have resulted in its RevPAR climbing from 73.0% in 1995 to 81.4% in
1996. This equates to a 28.1% increase in RevPAR, which is significantly higher
than the 11.4% increase experienced by the competitive set.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
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The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
================================================================================
Table 7-2 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
1996 Annual Room Night Demand (Rounded)
-------------------------------------------------------------
Percentage Percentage
Market Segment Market Wide of Total Subject Property of Total
- --------------------------------------------------------------------------------
Commercial 194,000 68% 16,000 58%
Meeting and Group 38,000 13 3,000 10
Leisure 54,000 19 9,000 32
------- ---- ------ ---
Total 285,000 100% 28,000 100%
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. Based
on our fieldwork and our discussions with the area's general managers, we
believe an insignificant amount of latent demand exists in the Woburn market.
Demand Adjustment
As discussed in the section entitled Lodging Market Supply and Demand Analysis,
the Comfort Inn will be closing from November, 1996 until the Summer of 1997 for
renovation and conversion into a Hampton Inn. The market room night demand must
be adjusted downward to account for the demand lost from the Comfort Inn's
guestroom closing. Although the competitive set of hotels will be able to
capture some of the Comfort Inn's lost demand, a significant portion of the
demand will inevitably escape the market since the area's hotels will only have
limited amounts of available rooms to accommodate the additional demand. For
example, on Tuesday and Wednesday nights, when demand from the commercial
segment is strongest, the area's hotels will likely operate at or near capacity,
with few rooms available to accommodate guests who would have stayed at the
Comfort Inn. Furthermore, guests will also be lost as the central reservation
system serving the Comfort Inn refers guests to Comfort Inns, or other Choice
Hotel brands, located in other nearby areas.
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As indicated in the following table, room night demand in the commercial segment
is adjusted downward by 10,000 room nights in 1997 as a result of the temporary
closing of the Comfort Inn.
================================================================================
Table 7-3 Demand Adjustment
- --------------------------------------------------------------------------------
1997 1998 1999
- ------------------------------------------------------------------
Phase-in: 100% 0% 0%
Commercial (10,000) 0 0
Meeting and Group 0 0 0
Leisure 0 0 0
------- ---- ----
Total (10,000) 0 0
- --------------------------------------------------------------------------------
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
Based on the established demand growth rates set forth in the previous section
of this report, as well as the projected drop in demand resulting from the
temporary closing of the Comfort Inn, total usable room night demand is expected
to decline by 1.0% in 1997. With the projected growth in marketwide demand and
the reopening of the Comfort Inn property, total usable demand is forecasted to
climb by 6.1% in 1998. Although the increase in demand for 1998 appears high, it
is important to note that a substantial portion of the demand increase results
from the room nights returning to the Comfort Inn property. In 1999 and
thereafter, demand is projected to grow at the rates set forth earlier in this
report.
The following table shows the projected annual change in accommodated and usable
room night demand in the subject property's competitive market.
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<TABLE>
<CAPTION>
====================================================================================================
Table 7-4 Total Usable Room Night Demand
- ----------------------------------------------------------------------------------------------------
Historical 1997 1998 1999 2000 2001 2002 2003
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate -- 3.0% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 193,563 199,370 205,351 211,512 215,742 220,057 224,458 228,947
Usable Latent -- (10,000) 0 0 0 0 0 0
Meeting and Group
Growth Rate -- 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Accommodated Demand 37,726 38,481 39,251 40,036 40,837 41,654 42,487 43,337
Usable Latent -- 0 0 0 0 0 0 0
Leisure
Growth Rate -- 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Accommodated Demand 53,510 54,045 54,585 55,131 55,682 56,239 56,801 57,369
Usable Latent -- 0 0 0 0 0 0 0
Totals
Commercial 193,563 189,370 205,351 211,512 215,742 220,057 224,458 228,947
Meeting and Group 37,726 38,481 39,251 40,036 40,837 41,654 42,487 43,337
Leisure 53,510 54,045 54,585 55,131 55,682 56,239 56,801 57,369
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL DEMAND 284,799 281,896 299,187 306,679 312,261 317,950 323,746 329,653
Annual Forecasted Growth -1.0% 6.1% 2.5% 1.8% 1.8% 1.8% 1.8%
</TABLE>
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Guestroom Supply
In 1996, the competitive properties provided a weighted total of 1,112
guestrooms. Due to the temporary closing of the Comfort Inn in 1997, room supply
is expected to decline to 1,062 rooms. However, with the reopening of the
Comfort Inn and the opening of the proposed 101-room Sierra Suites, which will
contribute 40 guestrooms to the supply based on its estimated competitiveness,
total room supply is projected to increase to 1,132 rooms in 1997, and a
stabilized room supply of 1,152 rooms in 1999. The following table shows the
projected competitive supply of available rooms and available room nights. To
calculate the annual number of available room nights, the number of available
rooms is multiplied by 365.
================================================================================
Table 7-5 Available Rooms and Room Nights
- --------------------------------------------------------------------------------
Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
- ------------------------------------------------------------------
Historical 284,799 405,880 70%
1997 281,896 387,630 73
1998 299,187 413,180 72
1999 306,679 420,480 73
2000 312,261 420,480 74
2001 317,950 420,480 76
2002 323,746 420,480 77
2003 329,653 420,480 78
- --------------------------------------------------------------------------------
Overall Competitive Occupancy
As indicated in the above table, the competitive set of hotels experienced an
overall occupancy of 70% in 1996. Despite a forecasted decline in demand in
1997, overall occupancy is expected to climb by 3.0% due to a deeper drop in
room supply. In 1998, when the proposed Sierra Suites opens, occupancy in the
area is expected to decrease from 73% in 1997 to 72% as a result of the
additional room supply. As demand continues to increase, the additional rooms
will be absorbed into the market, and overall occupancy should climb. In 1999,
overall competitive occupancy is forecasted to increase to 73%. Subsequent to
1999, overall occupancy is projected to grow in conjunction with growth in
demand since room supply expected to remain constant.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline), or the number of
room nights actually accommodated per year, per room, per
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market segment. For example, if a hotel has a commercial competitive index of
190, each room in the property is occupied 190 times a year by a commercial
traveler. The competitive index is calculated by dividing a hotel's annual
accommodated room night demand in a particular market segment by that property's
room count. Competitive indexes will be used to illustrate each property's
position in the market based on its ability to compete with other local lodging
facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market ranged from 111 to 205. The Red Roof Inn and the set of secondary hotels
were the most competitive properties in the commercial market in 1996, with each
registering an index of 205. The Howard Johnson Burlington ranked second with an
index of 189, while the Comfort Inn placed third with an index of 171. The
subject property's competitive index of 157 placed it fifth among the six
primary competitive hotels
Based on our field work, all of the hotels are expected to retain their current
competitive indexes, except for the Comfort Inn. The Comfort Inn's renovation of
its facilities and conversion to a Hampton Inn will allow it to significantly
improve its competitive position in the commercial segment. With a fresh product
and a strong franchise affiliation, the Comfort Inn should become the market
leader in the commercial segment.
For the proposed Sierra Suites, we have forecasted a stabilized competitive
index of 190, which is higher than the index of the Howard Johnson Burlington,
but lower than that of the Red Roof Inn and converted Comfort Inn. Although
suite-type hotels are typically very competitive in the commercial segment, the
Sierra Suites brand, which has only limited national exposure and presence,
prohibits the proposed property from achieving a stronger competitive position
in the area. The following table shows the projected commercial segment
competitive indexes of the area's hotels.
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Table 7-6 Commercial Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001
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Subject Property 157 157 157 157 157 157
Ramada Plaza Hotel 111 111 111 111 111 111
Red Roof Inn 205 205 205 205 205 205
Suisse Chalet 161 161 161 161 161 161
Comfort Inn 171 171 200 210 210 210
Howard Johnson Burlington 189 189 189 189 189 189
Secondary 205 205 205 205 205 205
Sierra Suites 0 0 170 180 190 190
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Meeting and Group Segment
The Ramada Plaza Hotel is the market leader in the meeting and group segment,
with an index of 78. The competitive indexes of all the hotels are expected to
remain constant in the meeting and group segment. With limited meeting space and
a commercial segment orientation, the proposed Sierra Suites is expected to have
a stabilized competitive index of 15.
The following table illustrates the competitive indexes in the meeting and group
segment.
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Table 7-7 Meeting and Group Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001
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Subject Property 27 27 27 27 27 27
Ramada Plaza Hotel 78 78 78 78 78 78
Red Roof Inn 14 14 14 14 14 14
Suisse Chalet 23 23 23 23 23 23
Comfort Inn 12 12 12 12 12 12
Howard Johnson Burlington 13 13 13 13 13 13
Secondary 40 40 40 40 40 40
Sierra Suites 0 0 10 13 15 15
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Leisure Segment
The subject property ranked first in the leisure segment, with a competitive
index of 86; this can be attributed to its closer proximity to Boston in
comparison to its competitors, as well as the property's offering of Jacuzzis in
some of its guestrooms. The Comfort Inn's competitive position in the leisure
segment is expected to increase as a result of its planned renovations, which
will enable to the property to provide more appealing facilities to its guests.
The proposed Sierra Suites is projected to achieve a competitive index of 45.
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The following table illustrates the competitive indexes in the leisure segment.
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Table 7-8 Leisure Segment Competitive Indexes
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Property Historical 1997 1998 1999 2000 2001
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Subject Property 86 86 86 86 86 86
Ramada Plaza Hotel 33 33 33 33 33 33
Red Roof Inn 55 55 55 55 55 55
Suisse Chalet 46 46 46 46 46 46
Comfort Inn 61 61 75 80 80 80
Howard Johnson Burlington 50 50 50 50 50 50
Secondary 37 37 37 37 37 37
Sierra Suites 0 0 35 40 45 45
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Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
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Table 7-9 Room Nights Captured by the Subject Property
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1997 1998 1999 2000 2001 2002
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Commercial
Demand 189,370 205,351 211,512 215,742 220,057 224,458
Market Share 0.0849 0.0786 0.0767 0.0766 0.0766 0.0766
Capture 16,071 16,132 16,227 16,519 16,849 17,186
Meeting and Group
Demand 38,481 39,251 40,036 40,837 41,654 42,487
Market Share 0.0723 0.0708 0.0702 0.0701 0.0701 0.0701
Capture 2,783 2,779 2,811 2,861 2,918 2,977
Leisure
Demand 54,045 54,585 55,131 55,682 56,239 56,801
Market Share 0.1708 0.1550 0.1511 0.1506 0.1506 0.1506
Capture 9,231 8,458 8,333 8,387 8,470 8,555
------- ------- ------- ------- ------- -------
Total Capture 28,085 27,370 27,370 27,767 28,238 28,718
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Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 100 x 365) produces the
projected occupancy percentage.
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Table 7-10 Calculation of the Subject Property's Projected Occupancy
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1997 1998 1999 2000 2001 2002
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Total Room Nights
Captured/Year 28,085 27,369 27,371 27,767 28,237 28,718
Available Room Nights 36,500 36,500 36,500 36,500 36,500 36,500
Occupancy 76.95% 74.98% 74.99% 76.07% 77.36% 78.68%
Rounded 77% 75% 75% 76% 77% 79%
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For the purpose of forecasting income and expense, we will use the following
occupancy levels.
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Table 7-11 Occupancy Forecast
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Year Occupancy
--------------------------
1997 77%
1998 75
Stabilized 75
2,000 76
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Although the preceding room night analysis shows the subject property achieving
a 76% occupancy in 2000, we have chosen to use a stabilized level of 75%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusually high or low occupancies. Although the
subject property may operate at occupancies above this stabilized level, we
believe it equally possible for new competition and temporary economic downturns
to force the occupancy below this selected point of stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
Competitive Positioning
The Howard Johnson's average rate will be projected using a competitive
positioning method. This technique begins with an analysis of the average rates
achieved by the subject property and its competitors. These rates establish a
range that reflects certain characteristics of the specific market, such as
price sensitivity, demand orientation, and occupancy. The subject property's
average rate is then compared to those of the hotels to which it is most similar
in terms of size, quality, facilities, amenities, market orientation, location,
management, image, and affiliation. Adjustments are made to reflect any relevant
differences.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
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project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by rooms revenue per available room
(RevPAR), which reflects a property's ability to maximize rooms revenue. The
following table summarizes the 1996 average rate and RevPAR of the subject
property and its competitors.
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Table 7-12 1996 Average Rate and RevPAR of the Primary Competitors
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1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
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Subject Property $65.00 $48.10
Ramada Plaza Hotel 62.00 37.82
Red Roof Inn 52.00 39.00
Suisse Chalet 51.00 32.13
Comfort Inn 57.00 38.19
Howard Johnson Burlington 75.00 51.75
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Average $60.16 $40.71
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The subject property's average rate and RevPAR are positioned below only those
of the Howard Johnson Burlington, which enjoys a more favorable location than
the subject property. The subject property's management reports that it has been
able to achieve a higher average rate than most of its competitors by offering
full-service facilities and changing its demand mix in favor of the commercial
segment, which is less rate-sensitive than the group and leisure segments. As
the subject Howard Johnson continues its efforts to gain more commercial
travelers, the property should be able to maintain its current average rate and
RevPAR position in the market area.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
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o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
As discussed earlier, the market has experienced strong growth in average rate
in recent years. According to STR data, average rate in the area increased by
3.6% in 1994 and 7.1% in 1995. Furthermore, year-to-date 1996 data indicates a
11.4% growth in average rate over 1995. The subject property experienced a 13.2%
increase in average rate in 1995, and it is expected to achieve a 10.8% climb in
average rate in 1996. Although the subject property and the competitive set have
shown strong growth in average rate in recent years, as the market achieves a
full recovery from the early 1990's, growth in average rate should become more
moderate. Based on these considerations, the following table shows our
projection of average rate increases.
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Table 7-13 Average Rate Forecast
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Areawide Subject Property's Subject Property's
Areawide Rate Rate Projected
Year Occupancy Increase Increase Average Rate
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Positioned Base -- -- -- $65.00
1997 73 % 5% to 7% 5.0% 68.26
1998 72 3 to 4 4.0 70.99
1999 73 3 to 4 3.5 73.47
2000 74 3 to 4 3.5 76.05
2001 76 3 to 4 3.5 78.71
2002 77 3 to 4 3.5 81.46
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As the above table illustrates, the area's average rate is expected to grow by
5% to 7%. Because the subject property has increased rates substantially in the
past few years, there exists limited opportunity for it to achieve similar rates
of growth. Consequently, we have projected the subject property's average rate
to climb by 5.0% in 1997 and 4.0% in 1998, before stabilizing at an annual rate
of growth of 3.5%.
The following average rates will be used to project the subject property's rooms
revenue.
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Table 7-14 Forecast of Occupancy and Average Rate
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Year Occupancy Average Rate
--------------------------------------------------
1997 77% $68.26
1998 75 $70.99
Stabilized 75 $73.47
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8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be as a full-service transient lodging facility.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
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9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
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10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
(2) Ibid.
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Howard Johnson is an existing hotel with an established operating
performance, its historical income and expense experience can serve as a basis
for projections. The subject property opened in 1972, and achieved occupancy
levels of 77.4% in 1994 and 68.7% in 1995. The following income and expense
statements were provided by Ashford Financial Corporation, and are unaudited.
Where applicable, we have reorganized the statements in accordance with the
Uniform System of Accounts for Hotels. Complete income and expense statements
were not available due to the change in ownership in 1994; consequently, the
1994 statement is for the period beginning May 1, 1994 and ending December 31,
1994.
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<TABLE>
<CAPTION>
======================================================================================================================
Table 10-1 Historical Operating Performance
- ----------------------------------------------------------------------------------------------------------------------
Calendar Year Ending: 1995 1994
Total Rooms: 100 100
Occupied Rooms: 24,813 18,706
Complimentary Rooms: 247 269
Days Open: 365 245
Occupancy: 68.7% Amount per Amount Per 77.4% Amount per Amount Per
Average Rate: $58.66 Percentage Available Occupied $53.94 Percentage Available Occupied
(+000) of Revenues Room Room (+000) of Revenues Room Room
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,456 90.5% $14,556 $58.66 $1,009 89.3% $10,089 $53.94
Telephone 35 2.2 351 1.42 28 2.5 278 1.48
Minor Operated Depts. 49 3.0 485 1.96 1 0.1 8 0.04
Other Income 70 4.3 695 13.57 92 8.1 918 4.91
Total 1,609 100.0 16,088 64.84 1,129 100.0 11,293 60.37
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES
Rooms 337 23.1 3,367 13.57 240 23.8 2,402 12.84
Telephone 21 60.5 213 0.86 13 48.2 134 0.72
Minor Operated Depts. 14 29.2 142 0.57 0 40.2 3 0.02
Total 372 23.1 3,721 15.00 254 22.5 2,538 13.57
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,237 76.9 12,367 49.84 875 77.5 8,754 46.80
- ----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 174 10.8 1,736 7.00 108 9.6 1,083 5.79
Management Fee 48 3.0 483 1.95 34 3.0 336 1.80
Marketing 88 5.4 875 3.53 48 4.2 477 2.55
Franchise Fees 47 2.9 466 1.88 31 2.7 308 1.65
Property Oper. & Maint. 115 7.1 1,149 4.63 85 7.6 853 4.56
Energy 172 10.7 1,716 6.92 81 7.2 809 4.32
Total 643 39.9 6,426 25.90 387 34.3 3,866 20.67
- ----------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 594 37.0 5,941 23.94 489 43.2 4,888 26.13
- ----------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 97 6.0 966 3.89 51 4.5 513 2.74
Insurance 27 1.7 274 1.10 28 2.4 276 1.48
Reserve for Replacement 64 4.0 644 2.59 0 0.0 0 0.00
Equipment Rent 12 0.8 124 0.50 6 0.6 64 0.34
Total 201 12.5 2,007 8.09 85 7.5 853 4.56
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $393 24.5 3,934 $15.85 $404 35.7 4,035 21.57
======================================================================================================================
</TABLE>
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<TABLE>
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Table 10-2 Historical Operating Performance
- ----------------------------------------------------------------------------------------------------------------------
Calendar Year Ending: Year-to-Date through August, 1996 Year-to-Date through August, 1995
Total Rooms: 100 100
Occupied Rooms: 17,570 15,448
Complimentary Rooms: 176 157
Days Open: 244 244
Occupancy: 72.7% Amount per Amount Per 64.0% Amount per Amount Per
Average Rate: $64.19 Percentage Available Occupied $56.76 Percentage Available Occupied
(+000) of Revenues Room Room (+000) of Revenues Room Room
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,128 90.0% $11,277 $64.19 $877 89.8% $8,768 $56.76
Telephone 32 2.6 322 1.83 22 2.2 218 1.41
Minor Operated Depts. 34 2.7 335 1.91 32 3.3 319 2.07
Other Income 60 4.8 597 3.40 45 4.7 454 2.94
Total 1,253 100.1 12,532 71.33 976 100.0 9,760 63.18
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES
Rooms 245 21.7 2,450 13.95 207 23.7 2,074 13.42
Telephone 12 38.2 123 0.70 13 59.7 130 0.84
Minor Operated Depts. 12 34.9 117 0.66 8 24.5 78 0.51
Total 269 21.5 2,690 15.31 228 23.4 2,282 14.77
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 984 78.6 9,842 56.01 748 76.6 7,478 48.40
- ----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 138 11.0 1,384 7.88 114 11.7 1,140 7.38
Management Fee 38 3.0 376 2.14 29 3.0 293 1.90
Marketing 74 5.9 741 4.22 51 5.2 509 3.30
Franchise Fees 36 2.9 364 2.07 28 2.9 283 1.83
Property Oper. & Maint. 88 7.0 883 5.02 75 7.7 755 4.89
Energy 88 7.0 881 5.02 115 11.8 1,154 7.47
Total 463 36.8 4,629 26.35 413 42.3 4,133 26.76
- ----------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 521 41.8 5,213 29.66 334 34.3 3,345 21.64
- ----------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 63 5.0 630 3.59 67 6.8 667 4.32
Insurance 31 2.4 305 1.74 19 2.0 190 1.23
Reserve for Replacement 50 4.0 501 2.85 39 4.0 391 2.53
Equipment Rent 14 1.1 141 0.80 12 1.2 115 0.75
Total 158 12.5 1,578 8.98 136 14.0 1,364 8.83
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $363 29.3 3,635 $20.68 $198 20.3 $1,981 12.81
======================================================================================================================
</TABLE>
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Because the 1994 statement of income and expense is for a partial year only,
they will not be used for comparison; instead, emphasis will be placed upon the
1995 statement and the year-to-date statements for 1995 and 1996. These
historical income and expense statements show that the subject property has
significantly improved its operating performance since 1995. By increasing
revenues and controlling expenses, the subject property has attained net income
of $363,000 through August of 1996, which is approximately an 83% increase over
the 1995 level of $198,000. As a percentage of gross revenues, net income has
risen from 20.3% in 1995 to 29.3% in 1996.
Contributing to the Howard Johnson's increase in net income is its growth in
revenue. Due to increases in both occupancy and average rate, the subject
property's year-to-date rooms revenue for 1996 has increased by 28.6% over the
same period in 1995. Increased occupancy has also boosted revenue from the
telephone and minor operated departments as well as other income. Overall, total
revenue has increased from $976,000 in 1995 to $1,253,000 in 1996.
As revenue has increased, departmental expenses as a percentage of total revenue
has decreased from 23.4% in 1995 to 21.5% in 1996. Rooms department expense as a
percentage of rooms revenue has decreased from 23.7% to 21.7%, and telephone
expense has substantially declined from 59.7% to 38.2% as a result of increased
long distance calls and lower costs associated with these calls. Due to higher
lifeguard wages and greater costs associated with guest laundry services, minor
operated department expense has increased from 24.5% of total revenues to 34.9%.
Like departmental expenses, operating expenses as a percentage of total revenue
has declined. Year-to-date operating expenses has decreased from 42.3% to 36.8%.
Because all of the operating expenses, with the exception of energy expense, has
increased on a per available room basis, the decline in the total operating
expense ratio has resulted from increased revenue, and indicates that management
has been able to generate revenue without incurring corresponding increases in
expenses. While management and franchise fees have remained constant,
administrative and general, property operations and maintenance, and energy
expense ratios have declined. Marketing expense as a percentage of total revenue
has increased from 5.2% in 1995 to 5.9% in 1996.
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Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
68.7%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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================================================================================
Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
Calendar Year Ending: 1995
Number of Rooms: 100
Occupancy: 68.7%
Average Rate: $58.66 Percent of Amount per Amount per
Occupied Rooms: 24,813 Total Available Occupied
(+000) Revenue Room Room
- --------------------------------------------------------------------------------
Revenue:
Rooms $ 1,456 90.0% $14,556 $ 58.66
Telephone 44 2.7 443 1.78
Minor Operated Depts 49 3.0 485 1.96
Other Income 70 4.3 695 2.80
Total Revenue $ 1,618 100.0 $16,179 $ 65.21
- --------------------------------------------------------------------------------
Expenses:
Rooms* $ 378 26.0% $ 3,785 $ 15.25
Telephone* 24 54.0 239 0.96
Minor Operated Depts.* 18 36.8 179 0.72
Other Income* 0 0.0 0 0.00
Administrative & General 200 12.3 1,997 8.05
Management Fee 49 3.0 485 1.96
Marketing 109 6.8 1,094 4.41
Franchise Fees 58 3.6 582 2.35
Property Oper. & Maint 123 7.6 1,229 4.95
Energy 129 8.0 1,287 5.19
Property Taxes 83 5.1 830 3.35
Insurance 30 1.9 300 1.21
Reserve for Replacement 65 4.0 647 2.61
Equipment Rent 12 0.8 124 0.50
Total Expenses $ 1,278 79.0% $12,779 $ 51.50
- --------------------------------------------------------------------------------
Net Income $ 340 21.0% $ 3,401 $ 13.70
================================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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================================================================================
Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W. Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Webber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
---- ----
Average 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
- --------------------------------------------------------------------------------
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The preceding table shows inflation forecasts averaging 3.0% through November of
1996 and 2.9% through May of 1997. Most of the economists in the sample estimate
inflation rates ranging from 2.5% to 3.4% for the 12-month period, although
several anticipate levels of slightly greater than 3.4%. As a further check on
these inflation projections, we have reviewed historical increases in the
Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1994, the national CPI increased at an average annual
compounded rate of 3.8%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-6 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
----------------------------
1997 5.0%
1998 4.0
1999 3.5
2000 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Another exception is the project rate of growth for the Howard Johnson's
property taxes. As discussed earlier in this report, property taxes are
forecasted to increase by 6.0% in the first three projection years. For 2000 and
beyond, property taxes are expected to increase in tandem with the underlying
rate of inflation of 3.5%.
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-7 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 1998 Stablized 2000 2001
- --------------------------------------------------------------------------------
Forecast Occupancy Percentage 77.0% 75.0% 75.0% 75.0% 75.0%
Forecast Average Rate $68.26 $70.99 $73.47 $76.05 $78.71
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-8 Forecast of Rooms Revenue (+000)
- --------------------------------------------------------------------------------
Number of Forecast
Calendar Years Projected Average Number Days in Rooms
Ending: Occupancy Room Rate of Units in Year Revenue
- --------------------------------------------------------------------------------
1997 77.0 X $ 68.26 X 100 X 365 = $ 1,918
1998 75.0 X 70.99 X 100 X 365 = 1,943
Stabilized 75.0 X 73.47 X 100 X 365 = 2,011
2000 75.0 X 76.05 X 100 X 365 = 2,082
2001 75.0 X 78.71 X 100 X 365 = 2,155
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost routing,
automatic price billing, and posting telephone charges to guest folios. Hotels
can select among various long-distance services, and can also work with any one
of a number of Alternative Operator Services (AOS). These systems route and
price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that
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can be accessed locally or through a toll-free number. When guests charge
long-distance calls to their personal or business accounts in this manner, the
hotel loses the revenue associated with long-distance tariffs and mark-ups, and
only receives an access fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed and variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-9 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Telephone Revenue (+000) $ 53 $ 53 $ 55 $ 57 $ 59
Percent of Total Revenue 2.5% 2.5% 2.5% 2.5% 2.5%
Amount Per Available Room $ 526 $ 532 $ 550 $ 570 $ 590
Amount Per Occupied Room $ 1.89 $ 1.94 $ 2.01 $ 2.08 $ 2.16
- --------------------------------------------------------------------------------
Minor Operated Departments Revenue
The subject property contains several minor operated departments. Revenues are
generated from guest laundry services, swimming pool passes, and banquet space
rentals. These revenues typically vary directly with changes in occupancy. The
subject property's minor operated departments revenue is project as follows.
================================================================================
Table 10-10 Forecast Minor Operated Departments Revenue
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Minor Operated Depts. Rev. (+000) $ 54 $ 55 $ 57 $ 59 $ 61
Percent of Total Revenue 2.6% 2.6% 2.6% 2.6% 2.6%
Amount Per Available Room $ 539 $ 553 $ 572 $ 592 $ 613
Amount Per Occupied Room $1.92 $2.01 $2.08 $2.16 $2.23
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
telephone services, and other minor operated departments. Depending on the type
of hotel and the facilities and amenities offered, other income may include the
following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
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o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
================================================================================
Table 10-11 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Other Income (+000) $ 77 $ 79 $ 82 $ 85 $ 88
Percent of Rooms Revenue 3.7% 3.7% 3.7% 3.7% 3.7%
Amount per Available Room $ 772 $ 792 $ 820 $ 848 $ 878
Amount per Occupied Room $ 2.74 $ 2.89 $ 3.00 $ 3.11 $ 3.21
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a
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result, salaries, wages, and employee benefits are only moderately sensitive to
changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-12 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Rooms Expense (+000) $ 425 $ 435 $ 450 $ 466 $ 482
Percent of Rooms Revenue 22.2% 22.4% 22.4% 22.4% 22.4%
Amount per Available Room $4,252 $4,352 $4,504 $4,661 $4,825
Amount per Occupied Room $15.19 $15.96 $16.51 $17.10 $17.68
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
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Table 10-13 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Telephone Expense (+000) $ 27 $ 27 $ 28 $ 29 $ 30
Percent of Telephone Revenue 50.6% 51.6% 51.5% 51.5% 51.5%
Amount per Available Room $ 268 $ 274 $ 283 $ 294 $ 304
Amount per Occupied Room $0.96 $ 0.99 $1.02 $1.06 $1.10
Minor Operated Department Expense
Expenses related to the subject property's minor operated departments consist of
guest laundry cost of sales and payroll expenses for the swimming pool's
lifeguards. The following table illustrates our projection of minor operated
departments expense.
================================================================================
Table 10-14 Forecast of Minor Operated Departments Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Minor Operated Depts. Exp. (+000) $ 20 $ 20 $ 21 $ 21 $ 22
Percent of Minor Operated Depts. Revenue 36.1% 36.4% 36.4% 36.4% 36.4%
Amount per Available Room $ 195 $ 200 $ 208 $ 215 $ 222
Amount per Occupied Room $0.71 $0.73 $0.77 $0.77 $0.80
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of recruiting,
relocating, and training personnel. Security consists of the cost of contract
security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance
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expense category. Liability insurance covers third-party actions involving
bodily injury and personal property, and is typically based on rooms receipts,
meeting and banquet income, and food and beverage revenue. Factors that may have
an impact on a hotel's liability expense include the size of the meeting,
banquet, and restaurant facilities; the ratio between the amount of alcohol
served and total food and beverage sales; the presence of a dance floor; a
high-rise structure; a swimming pool; life safety support systems; and the guest
transportation services provided by the hotel. The following table illustrates
our forecast of administrative and general expense.
================================================================================
Table 10-15 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Administrative &
General Exp. (+000) $ 228 $ 234 $ 242 $ 251 $ 259
Percentage of Total Revenue 10.8% 11.0% 11.0% 11.0% 11.0%
Amount per Available Room $2,280 $2,340 $2,420 $2,510 $2,590
Amount per Occupied Room $ 8.10 $ 8.54 $ 8.84 $ 9.15 $ 9.47
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
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HVS International, Mineola, New York Income Capitalization Approach 105
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HVS
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International
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The subject property is operated by Remington Employers Corporation. According
to the management agreement between Woburn Massachusetts Hotel Limited
Partnership and Remington Employers Corporation, a fee of 3% of gross revenues
is due to the management company. Based on our review of the current market for
management contracts, we are of the opinion that this fee is consistent with
prevailing market terms. Applying this management fee structure to the
projection of total revenue yields the following forecast of the subject
property's management fee.
================================================================================
Table 10-16 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 1998 Stablized 2000 2001
- --------------------------------------------------------------------------------
Management Fee Expense (+000) $ 63 $ 64 $ 66 $ 68 $ 71
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 106
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HVS
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International
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Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a fixed
and variable component model.
================================================================================
Table 10-17 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Marketing Expense (+000) $ 125 $ 128 $ 133 $ 137 $ 142
Percentage of Total Revenue 5.9% 6.0% 6.0% 6.0% 6.0%
Amount per Available Room $1,247 $1,282 $1,327 $1,373 $1,421
Amount per Occupied Room $ 4.44 $ 4.68 $ 4.85 $ 5.02 $ 5.19
- --------------------------------------------------------------------------------
Franchise Fee
Franchise expense represents the fees paid to Howard Johnson Franchise Systems,
Inc. for the use of the company's name, trade marks, and service marks. The
following table illustrates the projection of the subject property's franchise
fee.
================================================================================
Table 10-18 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Franchise Fees Expense (+000) $ 77 $ 78 $ 80 $ 83 $ 86
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However,
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 107
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HVS
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International
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as a hostelry grows older, maintenance expenses escalate. A well-organized
preventive maintenance system often helps delay deterioration, but most
facilities face higher property operations and maintenance costs each year,
regardless of the occupancy trend. The quality of initial construction can also
have a direct impact on future maintenance requirements. The use of high-quality
building materials and construction methods generally reduces the need for
maintenance expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-19 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Property Oper.& Maint.
Exp. (+000) $ 140 $ 144 $ 149 $ 154 $ 160
Percentage of Total Revenue 6.7% 6.8% 6.8% 6.8% 6.8%
Amount per Available Room $1,401 $1,440 $1,490 $1,542 $1,596
Amount per Occupied Room $ 4.98 $ 5.26 $ 5.44 $ 5.63 $ 5.83
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 108
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HVS
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International
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A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-20 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Total Energy Ezpense (+000) $ 141 $ 145 $ 150 $ 156 $ 161
Percentage of Total Revenue 6.7% 6.8% 6.8% 6.8% 6.8%
Amount per Available Room $1,408 $1,454 $1,505 $1,558 $1,612
Amount per Occupied Room $ 5.01 $ 5.31 $ 5.50 $ 5.69 $ 5.89
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-21 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Forecast Property Taxes (+000) $ 93 $ 99 $ 102 $ 106 $ 110
- -------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $93,000 in 1997. In subsequent years, this amount is assumed to
increase in tandem with inflation. The following table outlines our projection
of insurance expense.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 109
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HVS
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International
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================================================================================
Table 10-22 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Forecast Insurance Expense (+000) $ 32 $ 33 $ 34 $ 36 $ 37
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4% of total revenue is sufficient to provide for the periodic
replacement of the subject property's furniture, fixtures, and equipment. This
amount is consistent with the reserve account contributions currently made by
the hotel. The following table summarizes the projected reserve for replacement.
================================================================================
Table 10-23 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Reserve for Replacement Expense (+000) $ 84 $ 85 $ 88 $ 91 $ 95
- --------------------------------------------------------------------------------
Equipment Rental
The equipment rental category is comprised of lease payments for the rental of
the shuttle van and other miscellaneous equipment. For the purposes of this
appraisal, we have assumed that upon expiration of the subject property's
equipment leases, it will enter into other lease agreements under the
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 110
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International
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prevailing lease terms. Based on the 1995 equipment rental of $12,000, we have
forecasted equipment rent to increase in tandem with the underlying inflation
rate of 3.5%. The following table illustrates our projection of equipment rent.
================================================================================
Table 10-24 Forecast of Equipment Rental
- --------------------------------------------------------------------------------
1997 1998 Stabilized 2000 2001
- --------------------------------------------------------------------------------
Equipment Rental $ 13 $ 14 $ 14 $ 15 $ 15
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning January 1, 1997, and are
expressed in inflated dollars for each year.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 111
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HVS
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International
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================================================================================
Table 10-25 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Howard Johnson, Woburn,
Massachusetts (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
---------------------------------------
Calendar Years Ending: 1995 1997
Number of Rooms: 100 100
Occupancy: 68.7% 77.0%
Average Rate: $58.66 $68.26
Days Open: 365 365
Occupied Rooms: 24,813 % Gross PAR POR 28,105 % Gross PAR POR
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $ 1,456 90.5 % $ 14,556 $ 58.66 $ 1,918 91.2 % $ 19,180 $ 68.24
Telephone 35 2.2 351 1.42 53 2.5 530 1.89
Minor Operated Depts 49 3.0 485 1.96 54 2.6 540 1.92
Other Income 70 4.3 695 2.80 77 3.7 770 2.74
Total Revenues 1,609 100.0 16,088 64.84 2,102 100.0 21,020 74.79
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 337 23.1 3,367 13.57 427 22.3 4,270 15.19
Telephone 21 60.5 213 0.86 27 50.9 270 0.96
Minor Operated Depts 14 29.2 142 0.57 20 37.0 200 0.71
Total Dept. Expenses 372 23.1 3,721 15.00 474 22.5 4,740 16.87
- ----------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,237 76.9 12,367 49.84 1,628 77.5 16,280 57.93
- ----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 174 10.8 1,736 7.00 228 10.8 2,280 8.11
Management Fee 48 3.0 483 1.95 63 3.0 630 2.24
Marketing 88 5.4 875 3.53 125 5.9 1,250 4.45
Franchise Fees 47 2.9 466 1.88 77 3.7 770 2.74
Property Oper. & Maint. 115 7.1 1,149 4.63 140 6.7 1,400 4.98
Energy 172 10.7 1,716 6.92 141 6.7 1,410 5.02
Total Operating Expenses 643 39.9 6,426 25.90 774 36.8 7,740 27.54
- ----------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 594 37.0 5,941 23.94 854 40.7 8,540 30.39
- ----------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 97 6.0 966 3.89 93 4.4 930 3.31
Insurance 27 1.7 274 1.10 32 1.5 320 1.14
Reserve for Replacement 64 4.0 644 2.59 84 4.0 840 2.99
Equipment Rent 12 0.8 124 0.50 13 0.6 130 0.46
Total 201 12.5 2,007 8.09 222 10.5 2,220 7.90
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 393 24.5 3,933 $ 15.85 $ 632 30.2 $ 6,320 $ 22.49
======================================================================================================================
<CAPTION>
Calendar Years Ending: 1998 Stabilized
Number of Rooms: 100 100
Occupancy: 75.0% 75.0%
Average Rate: $70.99 $73.47
Days Open: 365 365
Occupied Rooms: 27,375 % Gross PAR POR 27,375 % Gross PAR POR
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $ 1,943 91.2 % $ 19,430 $ 70.98 $ 2,011 91.2 % $ 20,110 $ 73.46
Telephone 53 2.5 530 1.94 55 2.5 550 2.01
Minor Operated Depts 55 2.6 550 2.01 57 2.6 570 2.08
Other Income 79 3.7 790 2.89 82 3.7 820 3.00
Total Revenues 2,130 100.0 21,300 77.81 2,205 100.0 22,050 80.55
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 437 22.5 4,370 15.96 452 22.5 4,520 16.51
Telephone 27 50.9 270 0.99 28 50.9 280 1.02
Minor Operated Depts 20 36.4 200 0.73 21 36.8 210 0.77
Total Dept. Expenses 484 22.7 4,840 17.68 501 22.7 5,010 18.30
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,646 77.3 16,460 60.13 1,704 77.3 17,040 62.25
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 234 11.0 2,340 8.55 242 11.0 2,420 8.84
Management Fee 64 3.0 640 2.34 66 3.0 660 2.41
Marketing 128 6.0 1,280 4.68 133 6.0 1,330 4.86
Franchise Fees 78 3.7 780 2.85 80 3.6 800 2.92
Property Oper. & Maint. 144 6.8 1,440 5.26 149 6.8 1,490 5.44
Energy 145 6.8 1,450 5.30 150 6.8 1,500 5.48
Total Operating Expenses 793 37.3 7,930 28.97 820 37.2 8,200 29.95
- ----------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 853 40.0 8,530 31.16 884 40.1 8,840 32.29
- ----------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 99 4.6 990 3.62 102 4.6 1,020 3.73
Insurance 33 1.5 330 1.21 34 1.5 340 1.24
Reserve for Replacement 85 4.0 850 3.11 88 4.0 880 3.21
Equipment Rent 14 0.7 140 0.51 14 0.6 140 0.51
Total 231 10.8 2,310 8.44 238 10.7 2,380 8.69
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $ 622 29.2 $ 6,220 $ 22.72 $ 646 29.4 $ 6,460 $ 23.60
================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 112
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================================================================================
Table 10-26 Ten-Year Forecast of Income and Expense, Howard Johnson, Woburn,
Massachusetts(+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Years Ending: 1997 1998 1999 2000 2001
----------------- ----------------- ----------------- ----------------- ----------------
Number of Rooms: 100 100 100 100 100
Occupied Rooms: 28,105 27,375 27,375 27,375 27,375
Occupancy: 77.0% % of 75.0% % of 75.0% % of 75.0% % of 75.0% % of
Average Rate: $68.26 Gross $70.99 Gross $73.47 Gross $76.05 Gross $78.71 Gross
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,918 91.2% $1,943 91.2% $2,011 91.2% $2,082 91.2% $2,155 91.2%
Telephone 53 2.5 53 2.5 55 2.5 57 2.5 59 2.5
Minor Operated Depts 54 2.6 55 2.6 57 2.6 59 2.6 61 2.6
Other Income 77 3.7 79 3.7 82 3.7 85 3.7 88 3.7
Total 2,102 100.0 2,130 100.0 2,205 100.0 2,283 100.0 2,363 100.0
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
DEPARTMENTAL EXPENSES
Rooms 427 22.3 437 22.5 452 22.5 468 22.5 484 22.5
Telephone 27 50.9 27 50.9 28 50.9 29 50.9 30 50.8
Minor Operated Depts 20 37.0 20 36.4 21 36.8 21 35.6 22 36.1
Total 474 22.5 484 22.7 501 22.7 518 22.7 536 22.7
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
DEPARTMENTAL INCOME 1,628 77.5 1,646 77.3 1,704 77.3 1,765 77.3 1,827 77.3
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
OPERATING EXPENSES
Administrative & General 228 10.8 234 11.0 242 11.0 251 11.0 259 11.0
Management Fee 63 3.0 64 3.0 66 3.0 68 3.0 71 3.0
Marketing 125 5.9 128 6.0 133 6.0 137 6.0 142 6.0
Franchise Fees 77 3.7 78 3.7 80 3.6 83 3.6 86 3.6
Property Oper. & Maint 140 6.7 144 6.8 149 6.8 154 6.7 160 6.8
Energy 141 6.7 145 6.8 150 6.8 156 6.8 161 6.8
Total 774 36.8 793 37.3 820 37.2 849 37.1 879 37.2
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
HOUSE PROFIT 854 40.7 853 40.0 884 40.1 916 40.2 948 40.1
- ---------------------------- ----------------- ----------------- ----------------- ----------------- ----------------
FIXED EXPENSES
Property Taxes 93 4.4 99 4.6 102 4.6 106 4.6 110 4.7
Insurance 32 1.5 33 1.5 34 1.5 36 1.6 37 1.6
Reserve for Replacement 84 4.0 85 4.0 88 4.0 91 4.0 95 4.0
Equipment Rent 13 0.6 14 0.7 14 0.6 15 0.7 15 0.6
Total 222 10.5 231 10.8 238 10.7 248 10.9 257 10.9
- ---------------------------- ----------------- ----------------- ----------------- ---------------- ----------------
NET INCOME $ 632 30.2% $ 622 29.2% $ 646 29.4% $ 668 29.3% $ 691 29.2%
============================ ================= ================= ================= ================ ================
<CAPTION>
Calendar Years Ending: 2002 2003 2004 2005 2006
---------------- ---------------- --------------- ---------------- ----------------
Number of Rooms: 100 100 100 100 100
Occupied Rooms: 27,375 27,375 27,375 27,375 27,375
Occupancy: 75.0% % of 75.0% % of 75.0% % of 75.0% % of 75.0% % of
Average Rate: $81.46 Gross $84.31 Gross $87.26 Gross $90.32 Gross $93.48 Gross
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,230 91.2% $2,308 91.2% $2,389 91.2% $2,472 91.2% $2,559 91.2%
Telephone 61 2.5 63 2.5 65 2.5 68 2.5 70 2.5
Minor Operated Depts 63 2.6 66 2.6 68 2.6 70 2.6 73 2.6
Other Income 91 3.7 94 3.7 97 3.7 101 3.7 104 3.7
Total 2,445 100.0 2,531 100.0 2,619 100.0 2,711 100.0 2,806 100.0
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
DEPARTMENTAL EXPENSES
Rooms 501 22.5 519 22.5 537 22.5 556 22.5 575 22.5
Telephone 31 50.8 33 52.4 34 52.3 35 51.5 36 51.4
Minor Operated Depts 23 36.5 24 36.4 25 36.8 26 37.1 26 35.6
Total 555 22.7 576 22.8 596 22.8 617 22.8 637 22.7
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
DEPARTMENTAL INCOME 1,890 77.3 1,955 77.2 2,023 77.2 2,094 77.2 2,169 77.3
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
OPERATING EXPENSES
Administrative & General 268 11.0 278 11.0 287 11.0 298 11.0 308 11.0
Management Fee 73 3.0 76 3.0 79 3.0 81 3.0 84 3.0
Marketing 147 6.0 152 6.0 158 6.0 163 6.0 169 6.0
Franchise Fees 89 3.6 92 3.6 96 3.7 99 3.7 102 3.6
Property Oper. & Maint. 165 6.7 171 6.8 177 6.8 183 6.8 190 6.8
Energy 167 6.8 173 6.8 179 6.8 185 6.8 191 6.8
Total 909 37.1 942 37.2 976 37.3 1,009 37.3 1,044 37.2
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
HOUSE PROFIT 981 40.2 1,013 40.0 1,047 39.9 1,085 39.9 1,125 40.1
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
FIXED EXPENSES
Property Taxes 113 4.6 117 4.6 122 4.7 126 4.6 130 4.6
Insurance 38 1.6 40 1.6 41 1.6 42 1.5 44 1.6
Reserve for Replacement 98 4.0 101 4.0 105 4.0 108 4.0 112 4.0
Equipment Rent 16 0.7 16 0.6 17 0.6 17 0.6 18 0.6
Total 265 10.9 274 10.8 285 10.9 293 10.7 304 10.8
- ---------------------------- ----------------- ---------------- --------------- ---------------- ----------------
NET INCOME $ 716 29.3% $ 739 29.2% $ 762 29.0% $ 792 29.2% $ 821 29.3%
============================ ================= ================ ================ ================ ================
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 113
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 114
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International
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================================================================================
Table 10-27 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
- --------------------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 115
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The yield on A corporate bonds for the third quarter of 1996, as reported by
Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the equation
presented above produces an estimated hotel/motel interest rate of 8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of
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65% to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
20-year amortization mortgage with a 0.111856 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-28 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Selling Price Rate Yield Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-29 Equity Yield Requirements
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Source Equity Yield Requirement
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22% before payment of incentive management fees.
This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate.
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Percent of Rate of Weighted
Value Return Average
---------- ------- --------
Mortgage 70% X 0.11186 = 0.07830
Equity 30% X 0.12000 = 0.03600
-------
Overall Capitalization Rate 0.11430
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 12%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
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Table 10-30 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest)
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and the equity investor (equity yield). The equation and the calculations
associated with this simultaneous valuation formula are set forth in the Addenda
to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $5,309,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5%yield
and the equity yield is 22%, then $5,309,000 is the correct value by the income
capitalization approach. Using the assumed financial structure set forth in the
previous calculations, market value can be allocated between the debt and equity
as follows.
Mortgage Component (70%) $ 3,717,000
Equity Component (30%) 1,593,000
-----------
Total $ 5,309,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $ 3,717,000
Equity Component 0.111856
-----------
Annual Debt Service $ 415,768
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-31 Forecast of Net Income to Equity
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Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
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1997 $ 632,000 - $ 416,000 = $ 216,000
1998 622,000 - 416,000 = 206,000
1999 646,000 - 416,000 = 230,000
2000 668,000 - 416,000 = 252,000
2001 691,000 - 416,000 = 275,000
2002 716,000 - 416,000 = 300,000
2003 739,000 - 416,000 = 323,000
2004 762,000 - 416,000 = 346,000
2005 792,000 - 416,000 = 376,000
2006 821,000 - 416,000 = 405,000
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The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ( $850,000 /0.120) $7,083,000
Less:
Brokerage and Legal Fees 213,000
Mortgage Balance 2,677,000
----------
Net Sale Proceeds to Equity $4,193,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-32 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
-----------------------------------------------------------------
Total Property $5,309,000 14.4 %
Mortgage 3,717,000 9.4
Equiy 1,593,000 22.0
Note: Whereas the mortgage constant and value are calculated on the
basis of monthly mortgage payments, the mortghage yield in this
proof assumes single annual payments. As a result, the proof's
derived yield may be slightly less than that actually input.
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The following tables demonstrate that the property receives its anticipated
yields, proving that the $5,309,000 value is correct based on the assumptions
used in this approach.
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Table 10-33 Total Property Yield
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Net Income before Present Worth of $1 Discounted
Year Debt Service Factor @ 14.4% Cash Flow
- -------------------------------------------------------------------------
1997 $ 632,000 x 0.874147 = $ 552,000
1998 622,000 x 0.764133 = 475,000
1999 646,000 x 0.667964 = 432,000
2000 668,000 x 0.583899 = 390,000
2001 691,000 x 0.510414 = 353,000
2002 716,000 x 0.446177 = 319,000
2003 739,000 x 0.390024 = 288,000
2004 762,000 x 0.340938 = 260,000
2005 792,000 x 0.298030 = 236,000
2006 7,692,000 * x 0.260522 = 2,004,000
-----------
Total Property Value $ 5,309,000
*10th year net income of $821,000 plus sales proceeds of $ 6,871,000
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Table 10-34 Mortgage Component Yield
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Total Annual Present Worth of $1 Discounted
Year Debt Service Factor @ 9.4% Cash Flow
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1997 $ 416,000 x 0.914197 = $ 380,000
1998 416,000 x 0.835757 = 348,000
1999 416,000 x 0.764047 = 318,000
2000 416,000 x 0.698490 = 291,000
2001 416,000 x 0.638557 = 266,000
2002 416,000 x 0.583768 = 243,000
2003 416,000 x 0.533679 = 222,000
2004 416,000 x 0.487888 = 203,000
2005 416,000 x 0.446026 = 186,000
2006 3,093,000 * x 0.407756 = 1,261,000
-----------
Value Of Mortgage Component $ 3,718,000
*10th year debt service of $416,000 plus outstanding mortgage
balance of $2,677,000
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Table 10-35 Equity Component Yield
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Net Income Present Worth of $1 Discounted
Year to Equity Factor @ 22.2% Cash Flow
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1997 $ 216,000 x 0.819756 = $ 177,000
1998 206,000 x 0.671999 = 138,000
1999 230,000 x 0.550875 = 127,000
2000 252,000 x 0.451583 = 114,000
2001 275,000 x 0.370187 = 102,000
2002 300,000 x 0.303463 = 91,000
2003 323,000 x 0.248766 = 80,000
2004 346,000 x 0.203927 = 71,000
2005 376,000 x 0.167170 = 63,000
2006 4,599,000 * x 0.137039 = 630,000
----------
Value of Equity Component $1,593,000
*10th year net income to equity of $405,000 plus sales proceeds of $4,194,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.4%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 7.2% to 21.1%, it is our opinion that a 14% discount factor would be
appropriate for the Howard Johnson. The following table illustrates the
discounted cash flow analysis using a 14% discount factor.
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Table 10-36 Discounted Cash Flow Analysis
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Discount
Net Factor Discounted
Calendar Year Income @ 14.0% Cash Flow
---------------------------------------------------------------
1997 $ 632,000 0.87719 $ 554,386
1998 622,000 0.76947 478,609
1999 646,000 0.67497 436,032
2000 668,000 0.59208 395,510
2001 691,000 0.51937 358,884
2002 716,000 0.45559 326,200
2003 739,000 0.39964 295,332
2004 762,000 0.35056 267,126
2005 792,000 0.30751 243,546
2006 7,691,833 * 0.26974 2,074,824
Estimated Market Value: $5,430,448
(Say:) $5,400,000
Reversion Analysis
------------------
11th Year's Net Income $ 850,000
Capitalization Rate 12.0%
Total Sales Proceeds $7,083,333
Less: Broker & Legal @ 3.0% 212,500
----------
* 10th year net income of $821,000 plus sales proceeds of $6,870,833
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors...This technique is simple but less reliable because
the derivation of the discount rate has little support." In light of this
consideration, we have relied on the $5,309,000 value conclusion indicated by
Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error, and thus diminishes the reliability
of this approach. As a result of these
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shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
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attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
- --------
Property: Hampton Inn
Location: 6109 Glenwood Avenue
Raleigh, North Carolina
Date of Sale: May, 1995
Sales Price: $6,700,000
Grantor: IMIC (International Management and Investment Corporation).
Grantee: Winston Hotels, Inc.
Year Opened: 1986
Number of Rooms: 141
Price per Room: $47,518
Confirmed By: Schultz, Carr, Bissette & Associates
Comments: The property features an outdoor swimming pool.
Sale #2:
- --------
Property: Comfort Inn
Location: 629 Frontage Road
Augusta, Georgia
Date of Sale: May, 1995
Sales Price: $6,000,000
Grantor: IMIC (International Management & Investment Corporation)
Grantee: Winston Hotels
Year Opened: 1989
Number of Rooms: 123
Price per Room: $48,780
Confirmed By: Schultz, Carr, Bissette & Associates
Comments: The purchaser reportedly paid a premium for this property,
in order to obtain the remaining properties in the
portfolio.
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Sale #3:
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Property: Comfort Inn
Location: 7625 Imperial Way
Fogelsville, Pennsylvania
Date of Sale: March, 1995
Sales Price: $7,000,000
Grantor: Solow Hotel Corporation
Grantee: Innkeepers USA, L.P.
Year Opened: 1990
Number of Rooms: 127
Price per Room: $55,118
Confirmed By: Pratt, White, and Whitney - Real Estate Appraisers and
Consultants
Sale #4:
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Property: Independent Motel
Location: Wells Beach, Maine
Date of Sale: January, 1996
Sales Price: $6,000,000
Grantor: Vander W. Forbes and Mary E. Forbes
Grantee: Lafayette Wells, Inc.
Year Opened: 1917
Number of Rooms: 122
Price per Room: $47,244
Confirmed By: Amidon Appraisal Company
Comments: This property consists of at least six buildings constructed
between 1917 and 1983.
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HVS International, Mineola, New York Sales Comparison Approach 130
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In addition to considering the above recent transactions, we have also reviewed
the sale of the subject property, which occurred in March, 1994. The details of
this transaction are summarized as follows:
Subject Property:
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Property: Howard Johnson
Location: Woburn, MA
Date of Sale: March, 1994
Sales Price: $2,698,482
Grantor: Nippon Credit Bank, Ltd.
Grantee: Chartwell/G.S.R. Hotels III Limited Partnership (an entity
controlled by Ashford Financial Corporation)
Year Opened: 1972
Number of Rooms: 100
Price per Room: $32,083
Confirmed By: Grantee
In analyzing the sale of the subject property, it is important to consider the
terms and conditions pertaining to the transaction. The subject property was
acquired by Ashford Financial Corporation from Nippon Credit Bank, Ltd. in March
of 1994 as part of a purchase of a mortgage loan secured by 15 hotel properties.
The outstanding principal balance of the non-performing mortgage loan at the
time of acquisition was $72,840,000, and the purchase price was $18,730,000. At
the time of the closing, the mortgage loan was the subject of a settlement
agreement between Nippon Credit Bank, Ltd. and Northeast Hotel Association,
Inc., which was the owner of the subject property. The settlement agreement
called for the conveyance of property deeds in lieu of foreclosure as well as a
cash payment of $2,000,000 for the settlement of guaranty obligations. The above
listed price represents an allocation of the total package price rather than a
negotiated value for this single asset. Based on our understanding of the terms
of this transaction, we do not believe that this sale was reflective of the
market value of the individual hotel.
The relevance of the previous transaction involving the subject property is also
undermined by the material change in market conditions which occurred between
the date of this sale and the present date of value. Areawide occupancy and
average rate have improved dramatically in the intervening months, and are
forecasted to continue this positive trend. As previously discussed, the market
for hotel investments has also improved
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HVS International, Mineola, New York Sales Comparison Approach 131
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significantly, due to changes in lender and investor attitudes. Finally, the
property itself has undergone a significant renovation, with a total of $548,212
spent on upgrading the facilities and amenities in 1994 and 1995. An estimated
$103,771 is expected to be spent in 1996. For these reasons, we are of the
opinion that the 1994 sale involving the subject property is not a reliable
indicator of the current value of the hotel.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. Excluding the prior sale of the subject property, the
sales prices range from approximately $47,000 to $55,000 per room, or $4,700,000
to $5,500,000 for the 100-unit subject property. The income capitalization
approach indicates a value of $5,309,000, which falls within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1972, and will be approximately 24 years
old as of the date of this appraisal. The subject property appeared to be in
good condition at the time of our inspection. The depressed hotel market
conditions that prevailed in the late 1980s and the early 1990s have also led to
a degree of external obsolescence. In our opinion, it is impossible to identify
and quantify the impact of these factors on the property's value with any
accuracy, so we will only estimate the replacement cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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<TABLE>
<CAPTION>
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 -- - --
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 -- - --
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 -- - --
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
</TABLE>
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $ 42,000 100 $4,200,000
FF&E 10,500 100 1,050,000
Pre-Opening 2,500 100 250,000
Operating Capital 1,900 100 190,000
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Total $ 56,900 $5,690,000
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Howard Johnson appears to represent the highest and best use of the property,
the ground lease approach is an appropriate method of determining land value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3.0% and 4.5% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.0% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $ 1,877,290
Rental Percentage 0.04
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Economic Ground Rent $ 75,092
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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Economic Ground Rent $ 75,092 $750,916
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Capitalization Rate 0.10
Estimated Land Value (Say) $750,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 14.1% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
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Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $ 5,690,000
Land Value 750,000
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Total Replacement Cost $ 6,440,000
Total Replacement Cost (Say) 6,440,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Howard Johnson. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 138
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $5,309,000
Sales Comparison $4,700,000 - $5,500,000
Cost (Replacement Cost) $6,400,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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HVS International, Mineola, New York Reconciliation of Value Indications 139
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $47,000 to $55,000 per available room. The income capitalization approach
indicates a per-room value of approximately $53,000. This information suggests
that a slight downward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. The estimated replacement cost for the subject property is
substantially higher than the value indicated by the income capitalization
approach, and represents a barrier to entry for prospective hotel developers.
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HVS International, Mineola, New York Reconciliation of Value Indications 140
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Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market of the
fee simple interest in the Howard Johnson - Woburn, as of January 1, 1997, is:
$5,200,000
FIVE MILLION TWO HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $52,000 per room, which is well supported
by market sales, and is approximately 2% lower than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six months to one
year. Under normal economic conditions, hotels are transferred within this time
frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and
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similar items. Our inspection of the Howard Johnson indicates that the personal
property and fixtures are in good condition.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $10,500 per available room. Assuming an average
useful life of ten years and an effective age of four years, the value of the
furniture, fixtures, and equipment currently in place is approximately $6,300
per room, or a total of $630,000.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that "...any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
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HVS International, Mineola, New York Statement of Assumptions and 142
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and 143
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 144
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
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HVS International, Mineola, New York Certification 145
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Stephen Rushmore personally inspected the property described in this
report;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 146
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Robert Wong
-----------------------------------
Robert Wong
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
-----------------------------------
Anne R. Lloyd-Jones
Senior Vice President
/s/ Stephen Rushmore
-----------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
RW: ARL-J: SR: dce
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Northerly view of Subject Property
[GRAPHIC OMITTED]
Southern side of Guestroom wing
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Lobby
[GRAPHIC OMITTED]
Standard Double/Double Guestroom
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HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Standard King Guestroom
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Comfort Inn
[GRAPHIC OMITTED]
Susse Chalet
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Ramada Plaza Hotel
[GRAPHIC OMITTED]
Red Roof Inn
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HVS International, Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Howard Johnson Burlington
<PAGE>
WOBURN
SCHEDULE A
That certain parcel of land situate in Woburn in the County of
Middlesex and said Commonwealth described as follows:
Easterly by the Westerly line of Interstate Highway (Route 93) No
Access, sixty-three feet;
Southerly by the northerly line of said Interstate Highway, (Route
93) - (55 feet of which is No Access) and Montvale Avenue, two hundred thirteen
and 78/100 feet;
Southwesterly by the Northeasterly curving line forming the junction
of said Montvale Avenue and Mack Road, as shown on plan hereinafter mentioned,
thirty-nine and 27/100 feet;
Southwesterly again and Westerly by said Mack Road, six hundred
ninety and 67/100 feet;
Northerly by Lot 2 on said plan, four hundred twenty and 80/100
feet;
Easterly, five hundred thirty-nine and 03/100 feet and Northerly,
eighty-eight and 79/100 feet by land now or formerly of James F. McDonough.
Said parcel is shown as lot 1 on said plan, (Plan No. 33379B).
Being the same premises conveyed by Howard Johnson company to H.J. Acquisition
Corp. by deed dated 11/29/85 and recorded on 12/4/85 as instrument #69555-7.
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HVS International, Mineola, New York Addendum
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Synopsis of Franchise and License Agreements
Date: May 12, 1994
Licensor: Howard Johnson Franchise Systems, Inc.
Licensee: Woburn Massachusetts Hotel Limited Partnership
Premises: Hotel located on 1 Mack Road, Woburn, Massachusetts
Term: 15 years; expiration on May 11, 2009
Renewal: None
Fees: Royalty fee equal to 4% of gross rooms revenue Marketing
contribution equal to 2% of gross rooms revenue
Reservations fee equal to 2.5% of gross rooms revenue
Licensor Services: Reservation system; marketing; manager training program
Licensee Obligations: Proper bookkeeping; carrying of insurance; proper upkeep
of facilities
Termination: Upon default of either party; licensee termination with
liquidated damages in the amount of the accrued royalties
during the preceding 12 full calendar months.
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HVS International, Mineola, New York Synopsis of Hotel Management Agreement
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Synopsis of Hotel Management Agreement
Date: April, 1994
Owner: Woburn Massachusetts Hotel Limited Partnership
(Ashford Financial Corporation)
Manager: Remington Employers Corporation
Premises: Howard Johnson Woburn
Woburn, Massachusetts
Term: 15 years
Renewal: Operator option for two successive periods of
five years
Management Fee: 3% of gross revenues
Reserve for Replacement: 3% of gross revenues
Termination: 1) Upon default by owner or manager
2) Upon death or incapacitation of Archie
Bennett, Jr., President of Remington
Employers Corporation.
3) Upon sale of property (owner's option)
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HVS International, Mineola, New York Synopsis of Unexecuted Restaurant Lease
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Synopsis of Restaurant Lease
Date: July 1, 1994
Owner: Woburn Massachusetts Hotel Limited Partnership
(Ashford Financial Corporation)
Manager: Home Fries, Inc.
Premises: Howard Johnson Woburn
Woburn, Massachusetts
Term: 20 months
Renewal: Operator option for three successive periods of
five years
Lease Payments:
Basic Fee Initial Term: $5,000 per month
First Year of Renewal: $6,250 per month,
increasing by 5% annually thereafter
Incentive Fee 10% of gross meeting and banquet revenues
<PAGE>
HVS International, Mineola, New York Simultaneous Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation known as the simultaneous valuation formula, which solves
for the total property value using a ten-year mortgage and equity technique, was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of HVS International. A complete discussion of the technique is presented
in her article entitled, "Simultaneous Valuation: A New Technique."(17)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the projected income before
debt service, leaving the net income to equity for each year. The net income as
of the 11th year is capitalized into a reversionary value using the terminal
capitalization rate. The equity residual, which is the total reversionary value
less the mortgage balance at that point in time and less any brokerage and legal
costs associated with the sale, is discounted to the date of value at the equity
yield rate. The net income to equity for each projection year is also discounted
back to the date of value. The sum of these discounted values equals the value
of the equity component. Because the equity component comprises a specific
percentage of the total value, the value of the mortgage and the total property
can be computed easily. This process can be expressed in two algebraic equations
that set forth the mathematical relationships between the known and unknown
variables using the following symbols.
(17) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
de = Annual cash available to equity
dr = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of the loan paid off during the projection period
fp = Annual constant required to amortize the entire loan during the
projection period
Rr = Overall terminal capitalization rate that is applied to net income to
calculate the total property reversion (sales price at the end of the
projection period)
1/Sn = Present worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be used to express some of the
components of this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount that equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the mortgage amount by the
annual debt service constant (f). The following formula represents debt service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents the net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th-year net income before debt service (NI^11) by
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage and equity valuation process. Brokerage and
legal costs (b), expressed as a percentage of reversionary value (NI^11/R(r)),
are calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of the
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i), and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of the loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of the loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity residual value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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HVS International, Mineola, New York Simultaneous Valuation Formula
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial mortgage amount is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each projection year is discounted to the present value at the equity
yield rate (1/S^n). The sum of these cash flows is the value of the equity (1 -
M) V. The following formula represents the calculation of equity as the sum of
the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + ... + (d(e)^10 x 1/S^10)
+ (d(r) x 1/S^10) = (1 - M) V
Combining the Equations: Annual Cash Flow to Equity and Discounting the Cash
Flow to Equity to the Present Value - The last step is to arrive at one overall
equation that shows that the annual cash flow to equity plus the yearly
discounting to the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + ...
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
solved readily.
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most cases, net income
before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income remains constant as a percentage of total revenue, and
the dollar amount escalates at the annual inflation rate. Hotel investors are
currently using inflation rates of approximately 3.5% annually. The ten-year
forecast of income and expense illustrates the subject property's net income,
which is assumed to increase by 3.5% annually subsequent to the hotel's
stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1: Summary of Known Variables
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Annual Net Income NI See Ten-Year Forecast
Loan-To-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 12.0%
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The following table illustrates the present worth of a $1 factor at the 22%
equity yield rate.
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Table 2: Present Worth of $1 Factor at the Equity Yield Rate
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Calendar Year Ending: Present Worth of $1 Factor @22.0%
---------------------------------------------------------
1997 0.819756
1998 0.671999
1999 0.550875
2000 0.451583
2001 0.370187
2002 0.303463
2003 0.248766
2004 0.203927
2005 0.167170
2006 0.137039
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.111856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
(f x M x V) = 0.111856 x 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following.
( 632,000 - 0.078299 V) x 0.819672 +
( 622,000 - 0.078299 V) x 0.671862 +
( 646,000 - 0.078299 V) x 0.550707 +
( 668,000 - 0.078299 V) x 0.451399 +
( 691,000 - 0.078299 V) x 0.369999 +
( 716,000 - 0.078299 V) x 0.303278 +
( 739,000 - 0.078299 V) x 0.248589 +
( 762,000 - 0.078299 V) x 0.203761 +
( 792,000 - 0.078299 V) x 0.167017 +
( 821,000 - 0.078299 V) x 0.136899 +
((( 850,000 / 0.120 ) - ( 0.03 x ( 850,000 / 0.120)) -
(( 1 - 0.279638 ) x 0.70 x V)) x 0.136899 ) = ( 1 - 0.70 )V
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Like terms are combined as follows.
$3,590,297 - 0.376214 V = (1 - 0.70)V
$3,590,297 = 0.67621 V
V = $3,590,297 / 0.67621
V = $5,309,414
Total Property Value as Indicated by
the Income Capitalization
Approach (Say) = $5,300,000
<PAGE>
HVS International, Mineola, New York Qualifications of Robert Wong
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Robert Wong
Employment
1996 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports, and Investment Counseling)
1992 to 1996 CORNELL UNIVERSITY, SCHOOL OF HOTEL ADMINISTRATION
Ithaca, New York
1987 to 1992 DRAGON WYCK RESTAURANTS
Sheboygan, Wisconsin
Summer, 1992 HOLIDAY INN
Madison, Wisconsin
Education BS - School of Hotel Administration, Cornell
University
Professional Affiliations Cornell Society of Hotelmen
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HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Rushmore, CRE, MAI, CHA
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
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HVS
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International
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================================================================================
Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
<PAGE>
Hospitality Valuation Services Mineola, New York
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HVS
- -------------
International
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
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HVS
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Economic Study and Appraisal
----------------------------
Grand Kempinski Dallas
----------------------------
Addison, Texas
----------------------------
Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
<PAGE>
[Letterhead of HVS International]
April 30, 1997
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Grand Kempinski Dallas
Addison, Texas
Ref. #9710145
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities, and have analyzed the hostelry market conditions in the Dallas area.
Our report was prepared in accordance with, and is subject to, the requirements
of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and
the Uniform Standards of Professional Appraisal Practice (USPAP), as provided by
the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple interest in
the subject property described in this report, as of April 1, 1997, is:
$90,000,000
NINETY MILLION DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours, HOSPITALITY VALUATION
SERVICES A Division of Hotel Consulting
Services, Inc.
/s/ Samantha A. Sudre
Samantha A. Sudre
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
<PAGE>
HVS International, Mineola, New York
Grand Kempinski Dallas, Addison, Texas Table of Contents
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Table of Contents
1. Executive Summary ......................................... 1
2. Nature of the Assignment .................................. 3
3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood ...................... 7
4. Market Area Analysis ...................................... 29
5. Overview of External Forces Affecting the
U.S. Lodging Industry ................................ 43
6. Lodging Market Supply and Demand Analysis ................. 59
7. Projection of Occupancy and Average Rate .................. 78
8. Highest and Best Use ...................................... 96
9. Approaches to Value ....................................... 98
10. Income Capitalization Approach ............................ 101
11. Sales Comparison Approach ................................. 142
12. Cost Approach ............................................. 155
13. Reconciliation of Value Indications ....................... 163
14. Statement of Assumptions and Limiting Conditions .......... 167
15. Certification ............................................. 171
Addenda
Quality Assurance
Photographs of the Subject Property
Photographs of the Competitive Properties
Legal Description
Flood Map
Synopsis of Management Agreement
Synopsis of Retail Leases
Explanation of the Simultaneous Valuation Formula
Qualifications
Samantha A. Sudre
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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1. Executive Summary
Property: Grand Kempinski Dallas
Location: 15201 Dallas Parkway
Addison, Texas 75248
Date of Inspection: April 1, 1997
Interest Appraised: Fee simple, including land,
improvements, and furniture,
fixtures, and equipment
Date of Value: April 1, 1997
Land Description
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Area: 11 acres, or +/-480,000 square
feet
Zoning: PD - Planned Development
Assessor's Parcel Number: Quorum North PT Site 4, Block 2
Improvements Description
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Age: Constructed in 1983
Property Type: Four-star luxury convention
Guestrooms: 528
Number of Stories: 15 stories
Food and Beverage Facilities:
Le Cafe (Coffee Shop) 250 seats
Monte Carlo (Gourmet French/Italian) 230 seats
Le Gala (Sophisticated Reception Hall) 150 seats
Malachite (Showroom) 750 seats
Bristol Lounge (Lobby Lounge/Bar) 120 seats
Kempis (Nightclub) 750 seats
Meeting Space: 21 rooms, totaling +/-76,000
square feet
Parking: 860 total spaces
Surface Lot: 330 spaces
Parking Garage: 530 spaces
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HVS International, Mineola, New York Executive Summary 2
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Summary of Value Parameters
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Highest and Best Use (as if vacant): Transient lodging facility
Highest and Best Use (as improved): Transient lodging facility
Marketing Period: Six to twelve months
Number of Years to Stabilize: Three
Stabilized Year: 1999/00
Valuation Assumptions
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Mortgage Interest Rate: 9.5%
Amortization Period: 25 years
Debt Service Constant: 0.104844
Loan-to-Value Ratio: 70.0%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 20.0%
Terminal Capitalization Rate: 11.0%
Brokerage and Legal Fees: 3.0%
Holding Period: 10 years
Calculated Discount Rate: 13.5%
Estimates of Value
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Income Capitalization Approach: $89,950,000
Sales Comparison Approach: $85,000,000 - $99,000,000
Cost Approach (Replacement Cost): $100,800,000
Market Value Conclusion: $90,000,000
Market Value Conclusion per Room: $170,455
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-480,000-square-foot (11-acre) parcel improved with a 528-room, four-star
luxury convention lodging facility known as the Grand Kempinski Dallas, which
opened in 1983. In addition to guestrooms, the subject property contains 40
suites (included in the above room count), 22 meeting rooms with +/-76,000
square feet, a showroom, a garden court, two restaurants, a lobby lounge, a
nightclub, heated indoor and outdoor swimming pools and whirlpools, four lighted
roof-top tennis courts, two racquetball courts, a health club, parking for 860
cars, and appropriate back-of-the-house facilities. The hotel is located in
Addison, a small business town north of Dallas, at the intersection of Dallas
North Tollway and Beltline Road. Municipal jurisdictions governing the property
include the City of Addison, Dallas County, and the State of Texas. The hotel's
civic address is 15201 Dallas Parkway, Addison, Texas, 75248.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the Addison
area for the purpose of estimating the market value of the subject property.
Market value is defined by the Office of the Comptroller of the Currency (OCC),
12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
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HVS International, Mineola, New York Nature of the Assignment 4
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2. both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U. S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for use by Morgan Stanley Mortgage Capital,
Inc. in connection with the possible refinancing of the subject property. The
information presented in this report should not be disseminated to the public or
third parties without the express written consent of Hospitality Valuation
Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by Morgan Stanley Mortgage Capital, Inc. and the
hotel management. Unless noted otherwise, we have inspected the competitive
lodging facilities, and have analyzed the sales summarized in this report, and
our value conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as, "absolute ownership unencumbered by any other interest
or estate subject only to the four powers of government." The subject property
is appraised as a going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
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HVS International, Mineola, New York Nature of the Assignment 5
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled, The Valuation of Hotels and Motels,(2)
Hotels, Motels and Restaurants: Valuations and Market Studies,(3) The
Computerized Income Approach to Hotel/Motel Market Studies and Valuations,(4)
and Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations.(5)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus, the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management History and Assumptions
A photocopy of the subject property's legal description, which was provided by
the City of Adisson, is presented in the Addenda to this report; the appraisers
assume no responsibility regarding the accuracy of this legal description.
The subject property was built in 1983 and opened as a Registry hotel. In mid
1987, the hotel's appellation was changed to the Grand Kempinski. The legal
ownership entity is the Registry Dallas Associates, a Delaware limited
partnership which consists of Dallas Hotel Associates, the general
(2) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(3) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(4) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(5) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
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HVS International, Mineola, New York Nature of the Assignment 6
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partner, and Grand Hotel Associates, the limited partner. These entities have
owned the hotel since it opened. Kempinski International, Inc. operates the
subject property under a management agreement which expires December 31, 2002;
an abstract of this contract is presented in the Addenda to this report.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
twelve months to sell the subject property, assuming that it is placed on the
market at the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is April 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Anne R. Lloyd-Jones and Samantha Sudre on
April 1, 1997.
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located North of Dallas, within the block bounded by Dallas
Parkway to the east, Arapaho Road to the north, and the Quorum Loop North to the
west and south. Street frontage is available along the Dallas Parkway to the
east and the Quorum Loop to the south. The site's northern boundary is formed by
an alley between the hotel and the Colonnade, an adjacent office building. To
the west, the hotel adjoins a vacant parcel which is also owned by Registry
Dallas Associates, but which is not included in this appraisal. Primary
vehicular access to the property is provided by the Dallas Parkway. The site is
an irregular rectangle in shape, and its topography is flat. According to a
July, 1980 survey from the City of Addison, the subject parcel measures
approximately 480,000 square feet, or +/-11 acres. Municipal jurisdictions
governing the property include the City of Addison, the County of Dallas, and
the State of Texas.
The size and topography of the subject parcel appear to be well suited for hotel
use. The site is fully developed, with no excess land available for expansion.
Indeed, although the subject site is proportionately large for a 528-room hotel,
the City of Addison's requirements for parking accommodation justify the total
use of the land.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. The subject site
is readily accessible to a variety of local, county, state, and interstate
highways.
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SITE PLAN
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Primary regional access to the Dallas area is provided by Interstates 35, 30,
and 20. Interstate 35 (Stemmons Freeway), a major north-south thoroughfare for
Texas, connecting the Dallas/Fort area with Waco, Austin, San Antonio, and
Laredo, carries motorists south from Oklahoma and branches into two highways
(I-35E and I-35W) as it passes through Dallas and Fort Worth, before merging
again in Hillsboro, Texas. Interstate 30 is a northeast-southwest thruway
connecting the eastern boundary of downtown Dallas to Little Rock, Arkansas.
Interstate 20, a major east-west thoroughfare, originates in Meridian,
Mississippi, and extends westward through Jackson, Mississippi, Shreveport,
Louisiana, and Dallas before terminating approximately ten miles of Odessa,
Texas.
Other important regional roadways in the subject property's vicinity include
Interstates 75 and 635, and the Dallas North Tollway. Interstate 75 is a
north-south thruway connecting Caddo, Oklahoma (where it changes into U. S.
Highway 65) to the northern boundary of downtown Dallas. Interstate 635, which
is also known locally as the LBJ Freeway, constitutes a major east-west loop
known as the 635 Loop, which circumnavigates the Dallas Metropolitan area and
provides ready access from North Dallas to the Dallas/Fort Worth Airport.
Interstate 635 also meets Interstates 30, 20, and 35E at different points around
the city. The Dallas North Tollway is a six-lane, bi-directional toll road which
extends in a north-south direction through North Dallas. This road is a primary
commutational route, and links the commercial and residential developments in
North Dallas with the communities to the south, including the Dallas Central
Business District. In turn, the Dallas North Tollway provides access to I-635
approximately two miles south of the subject property.
Local Access and Visibility
Local thoroughfares providing general access to the subject site consist of Belt
Line Road, Preston Road and Arapaho Road. Belt Line Road and Arapaho Road are
both east-west thoroughfares which are characterized by commercial and
residential developments along their borders. Belt Line Road passes south of the
subject property, and Arapaho Road intersects the Quorum Loop North to the west,
which, in turn, circumvents the property and ends to the south, at Dallas
Parkway. Preston Road runs in a north-south direction approximately one mile
east of the subject property, and connects the Highland Park area of Dallas, to
the south, with the City of Plano to the north.
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Local access to the Grand Kempinski is primarily provided by the Dallas North
Tollway and Belt Line Road. The hotel is situated on the western access road for
the Tollway, which is known as the Dallas Parkway; traffic on this service road
travels one way, in a southbound direction. Motorists traveling north on the
Tollway must exit at Belt Line/Arapaho and continuing north, make a left U-turn
onto Dallas Parkway before reaching the hotel, which is located to their right.
The subject property has two entrances; the first one encountered provides
direct access to the main entrance (or east entrance) and to Monte Carlo, the
hotel's evening restaurant. The next entranceway (south entrance) offers direct
access to the ballroom and other function areas. Motorists traveling southbound
on the Dallas North Tollway must exit at the Keller Springs Road Exit, and
continue southward on Dallas Parkway; the hotel is encountered on their right,
shortly after crossing Arapaho Road.
The subject site, located immediately west of the Dallas North Tollway, enjoys
good visibility for passing north- and southbound motorists. However, the
high-rise office buildings located to the north and south somewhat obscure the
visibility of the hotel from points on the Tollway prior to the appropriate
exits, making the overall visibility of the subject hotel only fair. Visibility
of the Grand Kempinski from Belt Line Road is considered to be very good.
Overall, regional access to the Grand Kempinski Dallas is considered good, but
the visibility is considered average.
Airport Access
Primary air transportation to the Addison area is provided by Dallas/Fort Worth
International Airport, located approximately 19 miles west of the subject
property. The Dallas/Fort Worth International Airport serves as a hub for both
American Airlines and Delta Airlines, in addition to being utilized by an
additional five international and 16 domestic airlines. According to the new
Airport Development Plan, Dallas and Fort Worth will invest a total of $3.5
billion for major airfield expansion and associated facilities. To reach the
Grand Kempinski Dallas, motorists exit Dallas/Fort Worth International Airport
via the north exit onto Highway 121, and continuing north, exit onto I-635, and
travel eastward to the Dallas North Tollway, turning north.
Love Field Airport is a secondary airport servicing the Dallas area. It is
located approximately 12 miles south of the subject property, and offers the
services of Southwest Airlines. Under "the Wright Amendment," Love Field and
Southwest Airlines are allowed to provide interstate service, but
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only to the four states contiguous to Texas - New Mexico, Oklahoma, Arkansas,
and Louisiana. To reach the Grand Kempinski from Love Field Airport, motorists
follow Mockingbird Lane east, then take the Dallas North Tollway going north,
and use the Belt Line Road/Arapaho Road Exit.
Access to Local Demand Generators
The Grand Kempinski Dallas is situated in the heart of the area's primary
generators of lodging demand. Primary lodging demand generators in the subject
property's area are major businesses and corporations. The following table
outlines some of these major demand generators and their distance from the
subject site.
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Table 3-1 Local Demand Generators
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Approximate Distance
Demand Generator from Subject Site (in Miles)
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CompUSA 0.10
MBNA Information Services 0.25
Pizza Hut International 0.25
Mary Kay Cosmetics, Inc. 0.75
Countrywide Funding 8.0
The Galleria Mall 2.0
Digital Switch Corporation 7.0
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Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water Addison Water Department
Electricity TU Electric
Telephone Southwestern Bell
Long-distance Telephone MCI
Sewer Addison Water Department
Natural Gas Lone Star Gas Company
Garbage and Trash Texas Waste Management
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions, other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and no signs of toxic ground contaminants were visible s at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of these factors.
Easements
The appraisers were not provided with any information concerning easements
affecting the subject property. For the purpose of this appraisal, we have
assumed that the property is not encumbered by any unusual or onerous easements
that would affect its use or potential marketability.
Flood Zone
Possible locational hazards include flood potential. The subject property is
located within Zone C, per the Federal Insurance Administration Agency's
Community Panel Number 48108 0005 A, effective July 16, 1980. Zone C is
designates "areas of minimal flooding." However, we cannot guarantee the
accuracy of our data; therefore, we recommend that a flood certification be
obtained.
Legal Description
As noted earlier, a copy of the subject property's legal description, as
provided by the City of Addison, is presented in the Addenda to this report.
Land Conclusion
The subject parcel appears to be well suited as the site of a lodging facility.
We have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
Advantages
o The entire Dallas area enjoys superior national accessibility via
Dallas/Fort Worth International Airport.
o Local access is facilitated via easily navigated highways; Dallas North
Tollway provides convenient direct access to downtown Dallas.
o The size and topography of the site are appropriate for its current use,
and ample parking is available.
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o The area surrounding the site is developed with extensive commercial,
retail, and office uses, all of which generate lodging demand.
Disadvantages
o Visibility of the subject site for north- and southbound Tollway motorists
is somewhat impaired by the presence of high-rise office buildings in the
area.
o Access to the subject site from the Tollway via Dallas Parkway is somewhat
complicated for northbound travelers.
The advantages noted above are important locational characteristics. We believe
that these advantages outweigh the disadvantages, and we conclude that the
subject site is appropriate for its current use.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by management representatives.
The Grand Kempinski Dallas is a four-star luxury convention lodging facility
containing 528 rentable units with 40 suites (included in the above room count);
+/-76,000 square feet of meeting and banquet space, including a showroom and the
Garden Court; two restaurants; a lobby lounge; a nightclub; heated indoor and
outdoor swimming pools and whirlpools; four lighted tennis courts; two racquet
ball courts; a health club; parking for 860 cars; and appropriate
back-of-the-house facilities. The 15-story property opened in 1983, and is
operated under a management agreement with Kempinski International, Inc.
Overall, the hotel appears to be in relatively good condition; management
representatives report that all of the building systems are in working order.
Based on our inspection and information provided by management representatives,
the following table summarizes the facilities available at the subject property.
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Table 3-3 Facilities Summary
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Guestrooms
King Beds 293 Units
Double/Doubles 204
Suites 31
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Total 528 Units
Non-Smoking Rooms 355
Food and Beverage Outlets
Le Cafe 200 Seats
Monte Carlo 150
Bristol Lounge 150
Kempi's 700
Meeting and Banquet Rooms
Crystal Ballroom (8 sections) 25,400 Square Feet
Crystal Ballroom Foyer 20,000
Lalique Ballroom (2 sections) 4,560
Lalique Foyer 2,000
Malachite Showroom 9,280
Le Gala Reception Hall 3,180
3 Conference Rooms (2 sections each) 3,300
2 Board Rooms 1,100
2 Meeting Rooms
Cosmopolitan 650
Metroplex 650
Addison Hospitality Suite 1,030
Garden Court 5,168
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Total 76,318 Square Feet
Parking
Surface Lot 330 Spaces
Parking Garage 530
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Total 860 Spaces
Recreational & Other Amenities
Lighted Roof-Top Tennis Courts 4
Racquetball Courts 2
Indoor Heated Swimming Pool with Whirlpool
Outdoor Heated Swimming Pool with Whirlpool
Health Club
Men's & Women's Saunas
Ice Machine on each floor
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Table 3-3 Facilities Summary (continued)
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Retail Space 8 Shops
Elevators/Escalators
Montgomery Passenger Electric (3,000 lbs.) 6 Units
Service Electric (3,500 lbs.) 3
Cargo Hydraulic (10,000 lbs.) 1
Freight Hydraulic (3,500 lbs.) 1
Montgomery Escalators 2
Laundry
Washers 10 Units
Dryers 15
Folder 1
Ironer 1
Chutes
Life Safety Systems
Full Sprinkler System
Single Station Smoke Alarms
Voice Alarm System
Smoke and Fire Dampeners
Fire Extinguishers, Pull Stations
Mechanical Systems
Centralized Four-Pipe HVAC
Trane Centravac Air Chillers 2
Cleaver Brooks Boilers 2
Fulton Boiler for Laundry Area 1
Construction Details
Foundation Drill Concrete Piers
Framing Poured/Cast-in-Place
Concrete
Fire-Proof
Exterior Walls Pre-cast Concrete
Concrete Panels
Windows Single-pane
Glazed
Roof Metal and Concrete
Multi-ply Asphalt
Covering
Roofing Felt and
Ballast
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Property Exterior and Construction
Vehicular access to the subject site is via a driveway between the Colonnade
building and the hotel, or via the Quorum Loop North. After entering the site,
guests proceed to the hotel's main entrance, which is located on the east side
of the building. Service traffic can gain access to the loading dock, which is
located on the north side of the building.
The hotel structure is situated in the northeast portion of the site. Paved
parking areas located to the south of the property contain 330 spaces, and a
parking garage to the west accommodates 530 vehicles, for a total of
approximately 860 available parking spaces.
The hotel features two basic components: the 15-story hotel tower and the
three-story public building. The hotel is constructed of a fireproof
poured/cast-in-place concrete frame with concrete panels exterior walls. The
roof is constructed of metal and concrete with an asphalt multi-ply cover.
Windows are single-paned, glazed, and fixed throughout the property.
Design and Layout
The design of the hotel tower features a rectangular-shape; however, the
adjoining public building structure to the north, creates a L-shape with the
tower. Adjoining the subject hotel on its western side is the parking garage,
which is connected to the hotel tower on the ground level.
The subject property features 14 levels above one basement level. This
below-grade level houses the hair salon, the health club, some administrative
offices, the discotheque, and back-of-the-house spaces such as the hotel's
laundry, housekeeping and engineering rooms, and the employees' lockers and
cafeteria. Facilities accommodated on the first (ground) level include the
swimming pools, leased retail spaces, the two restaurants and the lobby lounge,
the showroom and additional function space, the main kitchen, the loading deck,
the two entrances, the lobby, some administrative offices, and parking. The
second level accommodates the ballrooms and pre-function space, five breakout
meeting rooms, the banquet kitchen, coat check rooms, and the business center.
The third-level accommodates sales and executive offices, four meeting rooms,
and guestrooms. The remaining 11 levels of the hotel structure are guestroom
floors. Levels 14 and 15 are concierge levels, and as such, benefit from added
services and amenities.
Lobby
The subject property's main entrance is located on the south side of the hotel
building, and is equipped with a porte cochere that covers the passenger
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arrival area. The main entrance opens into the lobby - a long rectangular space
that houses the front desk, and provides access to other areas of the hotel.
Upon entering through the main entrance doors, guests proceed to the front desk,
which is situated straight ahead and to the right, on the northern wall of the
lobby. The concierge desk is perpendicular to the front desk, on the western
wall. A seating area is conveniently located immediately to the left of the
entrance, on the southern wall, for the comfort of guests waiting for
transportation services. Across from the seating area, are the lobby lounge and
a corridor leading to Monte Carlo Restaurant, Le Gala Banquet Room, public
restrooms, and the stairways to Kempi's Discotheque below. Another corridor,
situated across from the front desk, extends westward, providing access to the
six guest elevators, six shops, including the hotel's gift shop, two escalators
leading to the function space on the second floor, the Garden Court, Le Cafe
Restaurant, the Malachite Showroom, public restrooms, a travel agency and the
covered parking.
The lobby floor is finished with marble and carpets. The walls are covered with
bright-colored fabrics and framed artworks, and two large glass chandeliers hang
from the ceiling. The lobby design is functional, and the front desk visible
from the main entry. However, the elevators are not visible from the front desk,
and are directly accessible from the ballroom (or southern) entrance, which may
cause security problems.
Food and Beverage Outlets
Food and beverage service is available in a casual restaurant known as Le Cafe,
a more upscale, gourmet French/Italian restaurant known as Monte Carlo, the
Malachite Showroom, Kempi's discotheque, and the Bristol Lounge. Except for
Kempi's, which is located on the basement level, all of these facilities are
located on the ground floor.
Le Cafe seats 250 people in a dining room divided into three sections, with the
middle section serving for the display of the buffets and the pastry shop. This
restaurant serves breakfast and lunch; its hours of operation are from 6:00 a.m.
to 5:00 p.m. every day of the week. Decorative elements include bright
wallcovering and assorted carpets, art works, chandeliers and wall fixtures,
flower arrangements, and a rose on each table. Le Cafe offers a breakfast and a
lunch buffet that attract a substantial outside clientele from the neighboring
offices.
The 230-seat Monte Carlo Restaurant is also divided into three areas. The
western section offers a more lively atmosphere, and features a bar and an open
kitchen. The other two sections are separated by an arch; the middle
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section is bright, and features a central table with a flower arrangement and a
display of wines. The eastern section has a more intimate atmosphere, with
dimmed lights and tables arranged along tinted-glass windows. In addition, the
restaurant offers two private rooms which can accommodate medium to large
parties in separate back rooms. The decoration of this restaurant is influenced
by Mediterranean styles. Recently acquired art works cover the walls, and
numerous plants enhance the atmosphere of the dining room. Monte Carlo is open
for dinner seven days a week from 6:00 p.m. until 10:30 p.m. Like Le Cafe, this
restaurant is serviced by a direct, efficient connection to the main kitchen,
and it appears to be in very good condition. Monte Carlo was renovated in 1989,
at which time, the walls were painted and soft goods were replaced.
The Malachite Showroom seats 750 people, with a choice of booth or regular
tables. This outlet originally operated as a showroom, featuring cabaret-style
entertainment several nights a week. This facility is now primarily used for
private functions. The stage, dance floor, and flexible setting permit many
different uses. On Sunday, the Malachite houses an elegant, locally popular
brunch from 11:00 a.m. until 2:30 p.m. The atmosphere of this room is very
luxurious, and the decor is in complete harmony with the malachite colonnades,
which gave it its name. The Malachite Showroom appears to be in very good
condition, and has direct access to the main kitchen.
Kempi's Discotheque has a capacity of 750 people. Furnishings include a round
bar, a dance floor with a disc jockey booth, and round black tables, and black
chairs. This facility is open Tuesday through Friday from 5:30 p.m. until 2:00
a.m., and Saturday from 8:00 p.m. until 2:00 a.m. A Happy Hour offering
complimentary hors d'oeuvres from 5:00 p.m. until 8:00 p.m. is available Tuesday
through Friday. Kempi's has had two recent minor renovations, and appears to be
in good condition.
The 120-seat Bristol Lounge is located in the lobby, and is furnished with
tables, chairs, and sofas. The bar is a half-circle in shape, and is situated in
the northeast corner of the lounge. In the middle of the eastern wall, a stage
accommodates a piano for live entertainment. The lounge is open from 11:00 a.m.
until 2:00 a.m., and complimentary hors d'oeuvres are offered between 5:30 p.m.
and 7:30 p.m. Soft goods and chairs were recently replaced, and the Bristol
Lounge appears to be in good condition.
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Meeting and
Banquet Space
A majority of the hotel's function space is located on the second level, with
additional areas situated on the first and third levels. Access to the
upper-level meeting areas is provided by the escalators, which connect the lobby
to the second level, and by the guest elevators. The Grand Kempinski Dallas
offers roughly 76,000 square feet of flexible meeting and banquet space,
including the +/-25,400-square-foot Crystal Ballroom, which divides into eight
sections; the +/-4,560-square-foot Lalique Ballroom, which divides into two
sections; +/-22,000 square feet of pre-function space; and a number of smaller
meeting rooms, breakout rooms, boardrooms, a magnificent showroom, and banquet
rooms. The following table illustrates the various sizes and capacities of this
meeting space.
================================================================================
Table 3-4 Meeting Space Capacities
- --------------------------------------------------------------------------------
Capacity by Configuration
------------------------
Meeting Room Square Feet Theatre Banquet
- -------------------------------------------------------------------------------
Crystal Ballroom 25,400 3,000 2,500
Lalique Ballroom 4,560 500 440
The Waterford 1,100 120 80
The Colonnade 1,100 120 80
The Spectrum 1,100 120 80
The Baccarat Room 560 60 40
The Steuben Room 560 --- 20
Garden Court 5,168 --- 600
Malachite Showroom 9,280 950 650
Le Gala 3,180 250 260
The Cosmopolitan 650 50 50
The Metroplex 650 50 50
Addison Hospitality Suite 1,030 75 80
---------
Total 54,338
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The subject property's meeting space is in good condition and is finished with
the same high-quality carpets, wallpapers, lighting fixtures, and decorated with
framed prints. The space offers high audiovisual capabilities, and audio-visual
services are provided by J&S Audio Visual, Inc., an outside company which
contracts with the hotel for these services.
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Guestrooms
The subject property contains 528 guestrooms, including 40 suites. The typical
guestroom measures approximately 334 square feet. Typical guest-rooms are
furnished with the following items.
o One king bed or two double beds with headboard(s)
o One or two nightstands with wall mounted lamps
o Small desk with chair and wall mirror
o Oval coffee table with love seat, chair and floor lamp
o One armoire with color television set and drawers
o One bench
o One closet
o One telephone with dataports
o One fax machine
o One radio alarm clock
o Iron and ironing board
o Fabric draperies
o Assorted artwork
Guest bathrooms feature the following items.
o Tub/shower combination
o Sink with counter
o One wall-mounted telephone
o Hair dryer
o Make-up mirror
The hotel features three types of guestroom decor, which are differentiated by
the patterns and colors of the soft goods, and the nature and design of the
wooden case goods. The Oriental rooms feature black wooden furniture, soft goods
with an Oriental motif, and mustard-colored carpeting. These rooms' soft goods
were replaced in the last quarter of 1996. The English rooms feature medium
brown wooden furniture and green carpeting. These rooms' soft goods were
replaced in the first quarter of 1997. The French rooms feature light-hued
wooden furniture and red carpeting; they
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remain unchanged since 1983, except for the carpeting, which was recently
replaced. At the time of our inspection, the subject property's guestrooms
appeared to be in good condition, although the French rooms will require soft
goods renovation in the near future. Additionally, some of the bathroom wall
vinyl still needed to be replaced, which, according to management
representatives, will be accomplished in the next few months.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with new carpeting and wall
vinyl.
Management has created non-smoking levels, which contain approximately 355
smoke-free guestrooms; this type of amenity costs very little and requires no
structural changes. We expect that the number of rooms allocated for this
purpose will be increased or reduced depending on demand and guest response.
Recreational Amenities
Recreational amenities at the subject property include a full-service health
club, which is located on the basement level. This facility is equipped with
treadmills, stationary bicycles, stair steppers, weight machines, and free
weights, and features two wall-mounted television sets. In addition, the hotel
has four lighted roof-top tennis courts, two indoor racquetball courts with
viewers gallery, men's and women's saunas, indoor and outdoor and heated
swimming pools - each with a whirlpool.
Leased Retail Spaces
The subject property currently leases retail space in eight ground-level
outlets, to seven tenants. This space is in excellent condition, and for the
most part, enjoys superior visibility. Tenants currently occupying this space
are Nova Limo (with one outlet adjacent to the parking garage and another in the
lobby), Voyage Travel, Fashion With Pizzazz, Enterprise Rent-a-Car, Menagerie
Salon, Mallasadi International, and Studio Kippenbrock. Summaries of these
leases are included in the Addenda to this report. According to management
representatives, there are reportedly no problems with the current tenants, who
are expected to remain in place at the hotel over the foreseeable future. If any
tenant were not to renew one of the leases, management estimates that it would
take two to three months to find a new tenant.
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Back-of-the-House Space
The majority of the back-of-the-house space is located on the basement and first
floors; the banquet kitchen is located on the second floor. The laundry room,
housekeeping, uniform issue, engineering, employee locker room an cafeteria,
storage rooms, switchboard, and general systems are all situated off a large
corridor in the back-of-the-house space of the basement. In addition, some
administrative offices are located just behind the health club. The main
kitchen, purchasing and receiving, human resources, security, employee entrance,
loading deck, storage rooms, and administrative offices are located in the
north, northwest, and center portions of the ground level. The layout and design
of the back-of-the-house space allows for very efficient operations.
The main kitchen is situated centrally to the two restaurants, the showroom, and
the banquet room. The only food and beverage areas that are not directly
serviced by the main kitchen are the Garden Court, and Kempi's and the Bristol
Lounge; however, the latter two outlets provide only limited food service. The
kitchen also features a butcher shop; pastries are baked on the premises, and
are also sold in the pastry shop.
Administrative Offices
The executive offices are located on the third floor of the subject property.
The front offices, including reservations, are located on the first floor,
behind the front desk; and the accounting offices are located in the basement.
Vertical Transportation
Six guest tower elevators, three service tower elevators, two freight elevators,
two escalators, and a variety of stairways facilitate vertical transportation
throughout the property. The nine tower elevators are electric units that span
the basement level through the 15th floor of the hotel. These elevators
accommodate both guests and service personnel, and are in good condition,
although their finishes are somewhat tired. The two freight elevators are
hydraulic units that allow access between the ground level and the second floor;
one of these elevators has a cargo car with a capacity of 10,000 pounds that
allows for the transportation of cars and boats. Vertical transportation in the
tower is also provided by two staircases. A staircase also facilitates access
between the lobby and basement level of the hotel, and two escalators provide
access between the lobby and the ballroom level.
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Heating, Ventilation, and Air Conditioning (HVAC)
Guestroom heating at the subject property is provided by a central plant with a
four-pipe system, and the public areas employ 20 air handling units. Heating is
provided by two oil and gas dual-fired boilers. According to property
management, all of the HVAC equipment is in working condition.
Fire Protection
The subject property reportedly meets all fire code regulations and safety
requirements. It is fully sprinklered, with the appropriate standpipes and hose
cabinets, which utilize a separate water supply. Hard-wired smoke detectors and
pull stations are located throughout the property, and are connected to the
local fire department. Additional fire protection features include the following
items.
o Voice alarm system
o Smoke and fire dampeners
o Fire extinguishers throughout the property
Management representatives of the subject property report that there have not
been any extraordinary concerns regarding security. The subject property offers
an electronic key system for its guestrooms. A video monitoring system has been
installed at various points in the building, and the security staff is located
at the service entrance, thereby contributing to the security of the building.
Asbestos
According to information provided by management representatives, no asbestos is
present in the subject property's improvements; however, we have not been
provided with an asbestos report to confirm this assertion. The reader should be
advised that any costs associated with asbestos removal or containment may have
an unfavorable impact on the hotel's market value, and the estimate set forth in
this appraisal reflects our value conclusions prior to the deduction of any such
costs. We suggest that interested parties initiate an independent analysis
regarding current asbestos levels and the capital expenditures necessary to
remove any asbestos that might be present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the subject
property's conformance to ADA standards. Capital expenditures that may be
necessary to bring the property into accordance with the ADA
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will reduce our estimate of market value. Any ongoing costs related to ADA
regulations are expected to be funded by normal replacement reserves.
Improvements Conclusion
Overall, the subject property's improvements appear to be appropriate for hotel
use. However, one problem has surfaced within the last six months: the ceiling
of the indoor swimming pool is suffering leaks. It is not clear at this time
what is causing this problem, but further investigation is planned. It is
assumed in this appraisal that the necessary steps to remedy the problem will be
taken, once the nature of the problem has been determined.
ZONING
According to the City Council of the City of Addison, Texas, zoning regulations
and map (dated July 15, 1980), the subject property is zoned as follows.
PD - Planned Development
Hotels (including related restaurants, alcoholic beverage sales, and retail
sales facilities) are a permitted use under this designation. Based on this
information, the subject property appears to conform to local zoning
regulations. We assume that all necessary permits and approvals have been
secured (including an appropriate liquor license), and that the subject property
was constructed in accordance with local zoning ordinances, building codes, and
all other applicable regulations. Our zoning analysis should be verified before
any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property - or ad valorem - tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed
in proportion to the value of all properties within a taxing jurisdiction, a
system of assessments is established. Theoretically, the assessed value placed
on each parcel bears a definite relationship to market value, so properties with
equal market values will have similar assessments and properties with higher and
lower values will have proportionately larger and smaller assessments. Depending
on the taxing policy of the municipality, property taxes can be based on the
value of the real property or the value of the personal property and the real
property.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable.
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The taxing jurisdiction governing the subject property assesses real and
personal property. The assessed value ratio is reported to be 100% of market
value. A review of the assessed values of the subject property and three
comparable hotels located in the Dallas County taxing jurisdiction reveals the
following information.
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Table 3-5 Assessed Value of Comparable Hotels
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<TABLE>
<CAPTION>
Total Assessment Assessment per Room
----------------------- ---------------------
No. of
Hotel Rooms Land Improvements Land Improvements
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Grand Kempinski 528 $6,528,940 $35,843,810 $12,365 $67,886
Westin Galleria 431 10 35,999,990 0 83,527
Marriott Quorum 547 3,878,590 26,716,800 7,091 48,842
Doubletree Lincoln Center 502 9,973,600 18,444,260 19,868 36,742
</TABLE>
Source: Dallas Central Appraisal District
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Based on the information presented in the preceding table, the per-room assessed
value of the subject property's land falls within the range indicated by the
comparable properties. Although the per-room assessed value of the subject
property's improvements is the second highest in the comparable set, it should
be noted that the subject property maintains the greatest amount of meeting
space, which will increase a property's per-room assessed value of improvements.
The 1996 assessment of personal property at the subject property is $5,752,420,
including the gift shop's assessed personal property value of $96,350.
The 1996 tax rates applicable to the subject property are presented in the
following table.
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Table 3-6 Tax Rates Applicable to the Subject Property
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Tax Rate per $100
Jurisdiction of Assessment
--------------------------------------------------
Dallas County $0.46255
City of Addison 0.45500
Dallas School District 1.46053
--------
Total $2.37808
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The subject property's 1996 tax burden is calculated as follows.
Real Property
($42,372,750 / 100) x 2.37808 = $1,007,658
Personal Property
($5,752,420 / 100) x 2.37808 = $136,797
Total 1996 Tax Burden
$1,144,455
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Table 3-7 Historical Tax Rates Applicable to the Subject Property
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Tax Rate per $100 Percent Change from
Year of Assessment Previous Year
-------------------------------------------------------------
1993 2.41308 --- %
1994 2.40311 (0.4)
1995 2.40998 0.3
1996 2.37808 (1.3)
Average Annual Compounded
Percent Change, 1993 - 1996: (0.5) %
--------------------------------------------------------------
The above table shows that the tax rate applicable to the subject property has
remained fairly stable for the past four years, with an average annual
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compounded change of -0.5% between 1993 and 1996. Based on this trend, we have
projected a minimal 1.0% annual increase in tax rates for the period between
1997/98 and 1999/00. Throughout the remainder of the forecast period, we have
projected the subject property's tax burden to increase by 3.5% per year,
reflecting annual inflationary trends. Applying the projected increases to the
1996 tax burden yields the following forecast of property taxes for the subject
property.
================================================================================
Table 3-8 Forecast of Property Tax Expense (+000)
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1997/98 1998/99 Stabilized
-------------------------------------------------------------------
Projected Property Taxes (+000) $1,173 $1,185 $1,197
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood of the subject property can be broadly defined by the borders
of Keller Springs to the north, Preston Road to the east, Interstate 635 to the
south, and Midway Road to the west.
The general neighborhood surrounding the subject site, as defined by the above
parameters, is characterized by residential, commercial, retail, and office
uses. The Dallas Galleria Mall, located south of the subject property, at the
northeast corner of the I-635/Tollway interchange, is one of the pre- eminent
malls in the Dallas Metropolitan area, containing over 200 specialty stores,
with anchors such as Saks Fifth Avenue, Macy's, Nordstrom, and Marshall Field's.
Retail use is also prevalent in the area around the subject property;
Prestonwood Town Center, located just across the Dallas North Tollway contains a
mall with anchors that include Neiman Marcus, Lord & Taylor, J. C. Penney,
Dillard's, and Mervyn's, and retail outlets such as Discovery Zone, Computer
City, Starpower, and Larry's Shoes. Additional strip developments in this area
contain small retail outlets, as well as larger ones, such as a Bed Bath &
Beyond, Office Depot, and Office Max.
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Restaurants, which serve as essential support facilities to both limited- and
full-service hotels, are prevalent along Belt Line Road. In addition to various
strip malls, office space and other lodging facilities, Belt Line Road is
characterized by various food and beverage outlets, such as the Macaroni Grill,
Tony Roma's, Hooter's, Grady's Restaurant, Houston's, and Landry's Seafood
House.
North of the subject property, between Arapaho Road and Airport Parkway, a
special planned neighborhood, the Addison Circle, is in the process of being
developed by Columbus Realty Trust with the joint planning efforts of the Town
of Addison, and Gaylord Properties, Inc.. According to representatives of the
Town of Addison, phase one of the project is well underway, and includes
residential housing, parks, retail, restaurants, and some office space and
corporate suites. Phase two of the Addison Circle project could eventually
include the addition of a hotel, but no definite plans have been made for the
present time.
Commercial office space in the subject site's neighborhood is also prevalent,
and is characterized by a mixture of both low-rise, single tenant facilities and
high-rise, multi-tenant complexes. The Dallas North Tollway has experienced a
proliferation of high-rise office development in the last 15 years, and major
tenants in the area currently include Pizza Hut International, Verifone,
PepsiCo, IBM, EDS, J. C. Penney, American Express, Kodak, CompUSA, Mobil Oil,
Mary Kay, and AT&T. In addition, the subject property is situated in an area of
increasing development, labeled as "the Platinum Corridor" by a real estate firm
in Dallas. We will discuss this region in the next section of the report.
The immediate neighborhood surrounding the subject property is principally
commercial in nature. Directly across Dallas North Tollway from the subject
property is a Bank of America, at the northwest corner of Dallas Parkway and
Belt Line Road; further to the north, a series of retail outlets are situated in
front of the Prestonwood Town Center mall (both the mall and the outlets were
discussed previously). A Mobil gas station is at the southeast corner of Arapaho
Road and Dallas Parkway, and directly across Arapaho Road are an Office Max and
Oshman's. The Colonnade office complex is situated at the southwest corner of
Arapaho Road and Dallas Parkway, followed to the west on Arapaho Road by an
antique store, a parking garage, a Nation's Bank, and the Digital Matrix Systems
building. West of the subject property a vacant +/-3.76-acre site, which is
currently used for parking, is open for development, and behind it are an Office
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Depot and a restaurant. South of the subject property, at the northwest corner
of Dallas Parkway and Belt Line Road, the Spectrum Center is an office complex
housing Frito Lay and Novell, among others, and directly to the west of it is a
Hooter's restaurant. A Mobil Mart is situated at the southwest corner of the
intersection of Belt Line Road and Dallas Parkway, and directly to the west is a
strip shopping center - the Plaza at Quorum - containing outlets such as
Starbuck's and Federal Express, restaurants, and a Bally Total Fitness Club. To
the south of the Mobil Mart is the CompUSA building, followed by the Marriott
Quorum, and the Pizza Hut Corporation building. Further south along the Dallas
Parkway are additional office buildings, +/-13.55 acres of land for sale, and a
+/-325,000-square-foot office building which is scheduled for completion in
December of 1998.
Neighborhood Conclusion
The neighborhood surrounding the Grand Kempinski Dallas appears to be well
suited for the operation of a four-star luxury convention hotel. The diversified
mix of residential, office, restaurant and retail uses in the area are necessary
for the success of the hotel. A significant amount of retail and restaurant
services are available in the neighborhood, identified primarily as the Galleria
Mall, the Prestonwood Town Center Mall, and the facilities along Belt Line Road.
The extensive commercial office space existing along the Dallas North Tollway
provides a strong corporate base of demand, and major tenants in the area, such
as Pizza Hut, allow for strong commercial demand growth. Overall, the subject
property's immediate neighborhood appears to be continuing on a strong growth
path. Such growth should allow the subject property to continue to strengthen
its position, as well as help to cushion the impact of any new hotel supply into
the area.
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The Grand Kempinski Dallas is situated in the City of Addison, Dallas County,
and the State of Texas. Economic trends in this area are influenced by events
occurring in the Dallas Metropolitan Statistical Area (MSA). This MSA consists
of Collin, Dallas, Denton, Ellis, Henderson, Hunt, Kaufman, and Rockwall
Counties.
Addison is adjacent to the Cities of Carrollton and Farmers Branch. These Cities
are situated immediately north and west of the City of Dallas, and are generally
included in the area known as North Dallas. This area has become a center for
business, retail, and fine restaurants. Addison lies almost entirely to the west
of North Dallas Tollway and to the north of Spring Valley Road. The economic
success of this city is linked to more than 2,000 businesses, 100 restaurants,
nine hotels, and the Addison Airport, a general aviation facility.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source, published by
Woods & Poole Economics, Inc. - a well-regarded forecasting service based in
Washington, DC. Using a data
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[GRAPHIC OMITTED]
AREA MAP
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HVS International, Mineola, New York Market Area Analysis 30
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base containing more than 300 variables for each county in the nation, Woods &
Poole employs a sophisticated regional model to forecast economic and
demographic trends. Historical statistics are based on census data and
information published by the Bureau of Economic Analysis. Projections are
formulated by Woods & Poole. All dollar amounts have been adjusted for
inflation, and thus, growth or decline represents real change in constant
dollars.
Population
Between 1980 and 1995, Dallas County and the State of Texas, registered
population growths of 1.5% and 1.8%, respectively; these levels were
considerably lower than the 2.4% annual gain registered by the Dallas MSA, and
higher than the United States annual gain of 1.0% during the same period. The
MSA's strong population gains are partially attributable to the lower cost of
living and doing business in the Southwestern United States in recent years,
which have supported both residential and business relocations.
Forecasts indicate that the population of Dallas County will continue to
increase faster than that of the United States, at 0.9%, although the 1.0%
average annual compounded growth rate anticipated for the county between 1995
and 2000 remains at a lower level than that projected for the MSA, at 1.6%, and
the state, at 1.5%. The slight population gains anticipated for Dallas County
suggest that this central county is relatively mature, with future growth
anticipated to occur in the outlying counties and neighborhoods, where housing
costs are more affordable. We find that the rate of population growth generally
establishes a minimum rate of increase for commercial segment hotel demand; this
observation also holds true for meeting and group business if a majority of the
meetings are business- oriented.
Retail Sales
Retail sales levels reflect both population trends and the propensity to spend
money on retail goods. There is no direct correlation between retail sales and
hotel demand; however, retail sales trends tend to gauge the economic health and
vitality of the market. Retail sales growth should cause local businesses to
prosper and make it more likely for new firms to enter the market, thereby
causing an increase in the demand for lodging facilities. In areas where tourism
is a significant economic factor, retail sales also reflect the amount of
visitation.
Between 1980 and 1995, retail sales in Dallas County increased at an average
annual compounded rate of 1.8%. The Dallas MSA achieved a higher
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HVS International, Mineola, New York Market Area Analysis 31
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growth rate of 2.5%, while the state registered the lowest level of 1.6%, and
the nation experienced a modest annual rate of 1.9%. Projections indicate a
recovery in retail sales between 1995 and 2000; Dallas County is expected to
achieve an average annual compounded growth rate of 1.0% during this period,
which is close to the 0.9% level anticipated for the nation. The MSA and the
state are both projected to achieve annual growth rates of 1.5% between 1995 and
2000. These trends are consistent with the population trends discussed
previously. Based on these trends, it is reasonable to conclude that economic
growth in the proposed subject property's market area will remain somewhat
moderate during the next few years.
Personal Income
According to the procedures outlined in the National Income and Product
Accounts, personal income is calculated by totaling earned income (wages,
salaries, other labor income, and proprietor's income), non-earned income, and
residence adjustments and subtracting personal contributions to social
insurance. Trends in personal income reflect the spending ability of local
residents. Like population trends, personal income has no direct correlation
with hotel room night demand, but rather, tends to gauge the economic health and
vitality of a market area.
Between 1990 and 1995, Dallas County's per-capita personal income level was
higher than the state and national average. This relationship suggests that
Dallas County residents were more affluent than typical Americans and able to
spend more money on retail goods, travel, dining, and services. Projections
indicate a 1.0% average annual compounded increase in Dallas County per-capita
personal income from 1995 to 2000; this rate is slightly lower than the 1.4%
annual gain anticipated for the United States.
Between 1980 and 1995, the total personal income in Dallas County increased at
an average annual compounded rate of 2.7%, after adjustment for inflation, which
compares favorably to the annual increase of 3.5% for the Dallas MSA, the 2.5%
increase for the State of Texas and the 2.3% increase for the United States.
Although projections are for slower growth in total personal income, Dallas
County is anticipated to achieve real gains of 2.0% annually between 1995 and
2000. During the same period, personal income in the Dallas MSA, the State of
Texas and the United States is projected to increase at rates of 2.7%, 2.8% and
2.3%, respectively. Overall, the projected growth in total personal income is a
favorable economic indicator for businesses in Dallas County.
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Trends showing the number, type, economic strength, and growth potential of
local businesses are key indicators of commercial lodging demand. Moreover, the
characteristics of the work force provide an indication of the type and amount
of hotel demand that is likely to be accommodated by area hotels. Sectors such
as finance, insurance, and real estate (FIRE); wholesale trade; and services
produce a considerable number of visitors who are not particularly rate
sensitive. The government sector often generates room nights, but per-diem
reimbursement allowances often limit the accommodations selection to budget and
mid-priced lodging facilities. Manufacturing, construction, and the
transportation, communications, and public utilities (TCPU) sector are least
likely to generate a significant number of hotel guests.
The major growth in employment between 1980 and 1995 occurred in the
agriculture, and services sectors (at 7.4% and 5.3% respectively), followed by
more moderate growths in the FIRE, total trade, TCPU, and total federal
government sectors. Declines were registered in the farming, manufacturing, and
federal military government categories. Total employment in the Dallas MSA
increased at an average annual compounded rate of 2.5% between 1980 and 1995.
This strong growth reflects the economic expansion which occurred in the
Dallas/Fort Worth area in the early to mid-1980s. Data for the more recent
period of 1990 to 1995 reflects a moderation of these trends, with total
employment increasing 1.7%. The agriculture and services sectors continued to
exhibit strong growth, at 5.0% and 3.0%, respectively. Additionally, the
construction sector increased by 3.0%, reflecting the return of development
activity in recent years. Projections anticipate more moderate growth between
1995 and 2000, with total employment expected to increase by 0.8%. Although
total employment growth is anticipated to be sluggish, the services and FIRE
sectors are projected to show moderate gains, which is a positive indicator of
future transient lodging demand.
The major employers in the North Dallas area represent a cross-section of hotel
demand potential. Some are national in scope, while others operate on a more
local basis; some are engaged in manufacturing, and others are active in
information technology, telecommunications, retail, food production and
distribution. The following table outlines some of the major employers in the
North Dallas area.
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Table 4-1 Major Employers
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Number of
Firm Type of Business Employees
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Texas Instruments, Inc. Manufacturing 19,000
EDS Corporation Information Technology 10,000
Tom Thumb Food & Pharmacy, Inc. Supermarket Chain 8,400
J.C. Penney Co., Inc. Retailing 7,000
MCI Communications Telecommunications 6,000
Northern Telecom (Nortel) Telecommunications Manufacturer 5,500
Plano ISD Public Schools 4,279
Frito Lay Co. Snack Food Production 3,900
Carrolton-Farmers Branch ISD Public School System 2,500
Source: Dallas Business Journal - Book of Lists 1997
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Office Space
Trends in occupied office space are among the most reliable indicators of
lodging demand; firms that occupy office space often exhibit a strong propensity
to attract commercial visitors. Although it is difficult to quantify hotel
demand based on the amount of occupied office space, trends that cause changes
in the amount of occupied office space or office space vacancy rates may have a
proportional impact on commercial lodging demand, and a less direct effect on
meeting demand. The following table summarizes recent office statistics for the
Dallas area, by submarket.
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Table 4-2 Dallas Existing Multi-Tenant Office Space
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No. of Total Percent
Dallas Market Buildings Square Feet Occupied
-------------------------------------------------------------
Central Business District 60 29,346,738 63 %
Central Expressway 64 10,736,212 88
North Dallas/Preston Center 25 2,822,092 94
Oak Lawn/Turtle Creek 56 7,492,584 87
Stemmons Freeway 77 9,653,855 76
South Dallas 15 829,794 86
LBJ Freeway 126 20,392,087 94
East Dallas 36 2,261,007 89
Las Colinas 73 11,344,220 95
Quorum/Bent Tree 110 12,853,479 94
Richardson/Plano 99 7,742,797 94
LBJ Extension/Freeport 19 2,112,736 89
-------------------------------------------------------------
Total 760 117,587,601 84
Source: The 1996 Year-End Annual Market Report
Fults Companies/ONCOR International
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Year-end figures estimate the Dallas multi-tenant office market to contain a
total of 117.6 million square feet in 760 office buildings with a minimum of
20,000 square feet. FULTSRESEARCH identified a continued demand of over three
million square feet of office space per year through the Year 2000. The subject
property is proximate to both the LBJ Freeway and Quorum/Bent Tree submarkets.
Both of these markets enjoyed a 6% vacancy rate in 1996, compared to a 16%
market average. According to a recent profile on Dallas in the October, 1996
issue of National Real Estate Investor, overall commercial construction in the
Dallas area was approximately 60% ahead of 1995's building rate through October,
with recently relocated companies such as Pizza Hut, Capital One, Quaker State
Oil and Transamerica Corp. responsible for much of this growth.
In the subject site's neighborhood, commercial office space expansions and
developments are prevalent. According to Mr. Randy Garrett, Vice President of
FultsOncor a real estate firm in Dallas, there is a real estate development
"frenzy" along a 13.7-mile stretch of the Dallas North Tollway, which he calls
"the Platinum Corridor." This designation is a reference to a two-mile stretch
of the Tollway, just north of LBJ Freeway, which was known as "the Golden
Corridor" in the 1980s. "The Platinum Corridor" is
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HVS International, Mineola, New York Market Area Analysis 35
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approximately bounded by Midway Road to the west, Preston Road to the east, the
LBJ Freeway to the south, and State Highway 121 to the north. The subject
property is situated in the heart of this corridor. It currently encompasses 122
existing buildings, which have reached an overall occupancy of 94%, and counts
22 office buildings planned or under construction, in addition to numerous
planned retail and residential developments on both sides of the Tollway. It is
expected that six of these buildings will be completed in 1997, for a total of
+/-729,604 square feet; eight are anticipated for completion in 1998, for a
total of +/-1,128,617 square feet; and eight more will open in 1999 and beyond,
for a grand total of +/-3,440,578 square feet. Examples of projects around the
subject property are offered below.
o MEPC American Properties is adding a building containing +/-381,000 square
feet to its Colonnade complex, located just north of the subject property,
which is due to be completed in September of 1998;
o The Tollway Plaza, located east of the Tollway and south of Keller Springs
Road, encompasses +/-180,000 square feet of office space, and is due to be
completed in June of 1998;
o The Village Parkway - located south of the shopping center which carries
the same name, and west of Bed Bath & Beyond - encompasses +/-320,000
square feet of office space and a potential hotel;
o Galleria IV, located at the northwest corner of Alpha Road and Dallas
North Tollway, encompasses roundly 200,000 square feet of office space and
a potential hotel;
o In the Preston Center on Dallas North Tollway, Trammell Crow Co. has
announced plans to develop a nine-story, +/-181,000-square-foot office
building at a reported cost of $30 million.
Another area of interest is Legacy, in the City of Plano, along Legacy Drive - a
shoulder road between Interstate 121 and U. S. Highway 75. The western portion
of Legacy Drive, between I-121 and Preston Road, houses the Legacy Office Park,
and is a fast-growing development area, as well as home to several major
national companies, such as J. C. Penney. Examples of company expansions and
relocations to the Legacy area are itemized as follows.
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HVS International, Mineola, New York Market Area Analysis 36
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o In 1993, Countrywide Funding Corporation, the nation's largest mortgage
lender, purchased a +/-250,000-square-foot building to use as its Central
Office. During the subsequent three years, Countrywide continued to grow,
and to operate with over 1,000 employees.
o PageNet, Inc., based in Plano, purchased a +/-60.9-acre site in Legacy for
a new corporate headquarters.
o In the second quarter of 1996, Frito-Lay, Inc. announced the expansion of
its Legacy headquarters, to include their international snack foods
division.
o In the fourth quarter of 1996, Dr. Pepper/7-Up, Inc. broke ground on a
+/-270,000-square-foot corporate office complex at 5301 Legacy Drive. The
firm expects to move to Plano in mid-1998, with 500 to 700 employees.
o Fina Oil and Chemical Corporation is moving its corporate headquarters
into a four-story and five-story office building on approximately 25 acres
on the southwest corner of the Dallas North Tollway and Legacy Drive.
Airport Traffic
Airport passenger counts are important indicators of lodging demand. Depending
on the type of service provided by a particular airfield, a sizable percentage
of arriving passengers may require hotel accommodations. Trends showing changes
in passenger counts also reflect local business activity and the overall
economic health of the area.
The primary airport serving the proposed subject property's market area is the
Dallas/Fort Worth International Airport (DFW). With more than 2,500 daily
flights, DFW is reportedly the second-busiest airport in the world. The airport,
which is served by five international and eighteen domestic carriers, services
approximately 29 million passengers a year. The following table details total
passenger activity for DFW from 1992 to 1996.
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Table 4-3 Dallas/Fort Worth International Airport Statistics
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Passenger Percent Percent
Year Enplanements Change(1) Change(2)
-----------------------------------------
1992 25,981,866 -- --
1993 25,166,901 (3.1) % (3.1) %
1994 26,222,449 4.2 0.5
1995 27,049,215 3.2 1.4
1996 29,066,411 2.4 1.9
(1)Annual average compounded percentage change from the previous year
(2)Annual average compounded percentage change from 1992
Source: Dallas/Fort Worth International Airport Authority
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As the preceding table indicates, total passenger enplanements at Dallas/Fort
Worth International Airport increased at healthy average annual compounded rates
from 1993 to 1996. This information is a favorable indicator of increased
visitation and a healthy environment for local lodging facilities.
Tourist Attractions
Addison offers a number of cultural attractions and events such as the Addison
Theatre Center or the historic Cavanaugh Flight Museum, Taste Addison, Kaboom
Town, and Oktoberfest. Addison is located in the heart of the southwest's
shopping mecca; from the Galleria to Prestonwood Mall, thousands of specialty
and department stores are available to shoppers. In addition, outside of
Addison's city limits, Dallas offers an array of attractions such as the Dallas
Zoo, Six Flags Over Texas, Wet'N Wild, West End Market Place, and Dallas
Cowboys' football, as well as numerous museums and theatres.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market area has historically achieved greater than average growth.
Continuing office building development, relocating employers, and the lowest
office vacancy rates in the submarket proximate to the proposed subject property
relative to Dallas overall suggest continuing demand growth in the commercial
market segment.
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HVS International, Mineola, New York Market Area Analysis 38
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The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus, reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus, may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 39
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+,000)
Dallas County 1980-1995 1,565.1 1,962.2 1.5%
Dallas, TX MSA 1980-1995 2,069.8 2,947.6 2.4
State of Texas 1980-1995 14,337.8 18,664.4 1.8
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+,000)
Dallas County 1990-1995 1,860.3 1,962.2 1.1
Dallas, TX MSA 1990-1995 2,689.6 2,947.6 1.8
State of Texas 1990-1995 17,045.4 18,664.4 1.8
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+,000)
Dallas County 1995-2000 1,962.2 2,061.0 1.0
Dallas, TX MSA 1995-2000 2,947.6 3,192.0 1.6
State of Texas 1995-2000 18,664.4 20,073.0 1.5
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+,000,000)
Dallas County 1980-1995 13,135.6 17,190.3 1.8
Dallas, TX MSA 1980-1995 15,833.5 22,854.9 2.5
State of Texas 1980-1995 97,713.3 124,784.7 1.6
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+,000,000)
Dallas County 1990-1995 15,215.3 17,190.3 2.5
Dallas, TX MSA 1990-1995 19,686.2 22,854.9 3.0
State of Texas 1990-1995 103,868.0 124,784.7 3.7
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+,000,000)
Dallas County 1995-2000 17,190.3 18,029.6 1.0
Dallas, TX MSA 1995-2000 22,854.9 24,570.2 1.5
State of Texas 1995-2000 124,784.7 134,120.1 1.5
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales Per Capita
Dallas County 1980-1995 8,392.8 8,760.5 0.3
Dallas, TX MSA 1980-1995 7,649.9 7,753.7 0.1
State of Texas 1980-1995 6,815.1 6,685.7 (0.1)
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales Per Capita
Dallas County 1990-1995 8,179.1 8,760.5 1.4
Dallas, TX MSA 1990-1995 7,319.4 7,753.7 1.2
State of Texas 1990-1995 6,093.6 6,685.7 1.9
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 40
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Personal Retail Sales Per Capita
Dallas County 1995-2000 8,760.5 8,748.1 (0.0) %
Dallas, TX MSA 1995-2000 7,753.7 7,697.5 (0.1)
State of Texas 1995-2000 6,685.7 6,681.6 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking
Place Sales (+,000,000)
Dallas County 1980-1995 1,351.7 1,994.2 2.6
Dallas, TX MSA 1980-1995 1,543.6 2,516.8 3.3
State of Texas 1980-1995 8,606.1 13,050.1 2.8
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking
Place Sales (+,000,000)
Dallas County 1990-1995 1,779.1 1,994.2 2.3
Dallas, TX MSA 1990-1995 2,174.7 2,516.8 3.0
State of Texas 1990-1995 10,794.4 13,050.1 3.9
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales
(+,000,000)
Dallas County 1995-2000 1,994.2 2,144.5 1.5
Dallas, TX MSA 1995-2000 2,516.8 2,769.1 1.9
State of Texas 1995-2000 13,050.1 14,471.7 2.1
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking
Place Sales Per Capita
Dallas County 1980-1995 863.6 1,016.3 1.1
Dallas, TX MSA 1980-1995 745.8 853.8 0.9
State of Texas 1980-1995 600.2 699.2 1.0
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking
Place Sales Per Capita
Dallas County 1990-1995 956.4 1,016.3 1.2
Dallas, TX MSA 1990-1995 808.6 853.8 1.1
State of Texas 1990-1995 633.3 699.2 2.0
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking Place Sales
Per Capita
Dallas County 1995-2000 1,016.3 1,040.5 0.5
Dallas, TX MSA 1995-2000 853.8 867.5 0.3
State of Texas 1995-2000 699.2 721.0 0.6
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income
(+,000,000)
Dallas County 1980-1995 26,466.0 39,298.6 2.7
Dallas, TX MSA 1980-1995 33,594.0 56,083.7 3.5
State of Texas 1980-1995 197,605.0 285,315.1 2.5
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 41
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income
(+,000,000)
Dallas County 1990-1995 34,282.0 39,298.6 2.8%
Dallas, TX MSA 1990-1995 47,947.2 56,083.7 3.2
State of Texas 1990-1995 248,474.8 285,315.1 2.8
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+,000,000)
Dallas County 1995-2000 39,298.6 43,476.2 2.0
Dallas, TX MSA 1995-2000 56,083.7 64,010.8 2.7
State of Texas 1995-2000 285,315.1 327,233.2 2.8
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
Dallas County 1980-1995 16,910.0 20,027.0 1.1
Dallas, TX MSA 1980-1995 16,231.0 19,027.0 1.1
State of Texas 1980-1995 13,782.0 15,287.0 0.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per
Capita
Dallas County 1990-1995 18,429.0 20,027.0 1.7
Dallas, TX MSA 1990-1995 17,827.0 19,027.0 1.3
State of Texas 1990-1995 14,577.0 15,287.0 1.0
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
Dallas County 1995-2000 20,027.0 21,095.0 1.0
Dallas, TX MSA 1995-2000 19,027.0 20,054.0 1.1
State of Texas 1995-2000 15,287.0 16,302.0 1.3
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment - Dallas
County (+,000)
Farm 1980-1995 1.4 1.1 (1.6)
Agriculture Services, Other 1980-1995 3.6 10.7 7.4
Mining 1980-1995 28.5 29.8 0.3
Construction 1980-1995 66.2 68.9 0.3
Manufacturing 1980-1995 193.0 190.0 (0.1)
Trans., Comm. & Public Utils. 1980-1995 67.5 93.8 2.2
Total Trade 1980-1995 278.6 373.1 2.0
Wholesale Trade 1980-1995 103.1 129.0 1.5
Retail Trade 1980-1995 175.5 244.1 2.2
Finance, Insurance, & Real Estate 1980-1995 123.6 184.2 2.7
Services 1980-1995 233.4 503.0 5.3
Total Government 1980-1995 106.5 142.3 1.9
Federal Civilian Govt. 1980-1995 22.0 31.1 2.3
Federal Military Govt. 1980-1995 6.2 4.6 (2.0)
State & Local Govt. 1980-1995 78.3 106.6 2.1
TOTAL 1980-1995 1,102.2 1,597.0 2.5
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 42
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Table 4-4 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment - Dallas
County (+,000)
Farm 1990-1995 1.1 1.1 0.3 %
Agriculture Services, Other 1990-1995 8.3 10.7 5.0
Mining 1990-1995 32.6 29.8 (1.8)
Construction 1990-1995 56.4 68.9 4.1
Manufacturing 1990-1995 191.7 190.0 (0.2)
Trans., Comm., & Public Utils. 1990-1995 84.6 93.8 2.1
Total Trade 1990-1995 344.7 373.1 1.6
Wholesale Trade 1990-1995 118.5 129.0 1.7
Retail Trade 1990-1995 226.2 244.1 1.5
Finance, Insurance, & Real Estate 1990-1995 182.1 184.2 0.2
Services 1990-1995 434.6 503.0 3.0
Total Government 1990-1995 133.4 142.3 1.3
Federal Civilian Govt. 1990-1995 30.7 31.1 0.3
Federal Military Govt. 1990-1995 9.0 4.6 (12.5)
State & Local Govt. 1990-1995 93.7 106.6 2.6
TOTAL 1990-1995 1,469.4 1,597.0 1.7
Projected Employment - Dallas County (+,000)
Farm 1995-2000 1.1 1.1 (0.8)
Agriculture Services, Other 1995-2000 10.7 11.8 2.0
Mining 1995-2000 29.8 33.7 2.5
Construction 1995-2000 68.9 68.5 (0.1)
Manufacturing 1995-2000 190.0 196.0 0.6
Trans., Comm., & Public Utils. 1995-2000 93.8 97.7 0.8
Total Trade 1995-2000 373.1 386.2 0.7
Wholesale Trade 1995-2000 129.0 133.7 0.7
Retail Trade 1995-2000 244.1 252.5 0.7
Finance, Insurance, & Real Estate 1995-2000 184.2 197.4 1.4
Services 1995-2000 503.0 531.6 1.1
Total Government 1995-2000 142.3 141.1 (0.2)
Federal Civilian Govt. 1995-2000 31.1 33.1 1.2
Federal Military Govt. 1995-2000 4.6 0.3 (41.6)
State & Local Govt. 1995-2000 106.6 107.8 0.2
TOTAL 1995-2000 1,597.0 1,665.1 0.8
</TABLE>
Source: Woods & Poole Economics, Inc.
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The Lodging Market Supply and Demand Analysis section of this economic study and
appraisal will relate these historical and projected growth trends to specific
market segments based on their propensity to reflect visitation. This analysis
will provide a basis for forecasting changes in room night demand in the subject
property's area.
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HVS International, Mineola, New York Overview of External Forces 43
Affecting the U.S. Lodging Industry
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5. Overview of External Forces Affecting the U. S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U. S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 44
Affecting the U.S. Lodging Industry
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This decrease caused a decline in hotel interest rates beginning
in 1983, and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U. S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U. S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
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Year 1990 1991 1992 1993 1994 1995
- ------------------------------------------------------------------------------
Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in 1994 and 1995.
During the low-volume years, many sellers remained on the sidelines waiting for
values to increase before placing their properties on the market. The jump in
1994 is attributable to a number of factors, including the greater availability
of mortgage funds, a return of institutional investors to the market, and a
resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
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Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
---------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
- --------------------------------------------------------------------------------
This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against
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inflation, which was true even when the CPI increased at double-digit levels.
The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This percentage may appear to be high, but a similar trend occurred in 1978,
when room rates rose 14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U. S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
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forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the average
sales price per room peaked at $75,000, which was more than twice the 1981
average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Air Hotel) to $251,816 in 1992. The market hit bottom in 1993,
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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Valuation Index Per Room
------------------------
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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Annual Percent Change
---------------------
<TABLE>
<CAPTION>
'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U. S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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list summarizes the positive and negative factors that are likely to influence
the U. S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U. S. economy continues to improve, which suggests that more people
are traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
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o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998, which is a good indication that hotel values will return to record
levels in the next two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U. S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This case is particularly true with respect to meetings and conventions,
which can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a
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HVS International, Mineola, New York Overview of External Forces 58
Affecting the U.S. Lodging Industry
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higher level. Consequently, we believe that there is pent-up desire to sell,
once prices begin to approach levels that allow the existing (or restructured)
debt to be paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results must take into
account at least a portion of any upside created from improved performance,
particularly if the improvement can be readily achieved through management
efficiencies. Capitalization rates based on historical operating income have
fallen during the past several years. Hotel buyers in today's market must be
aggressive in all of their acquisition assumptions. As a result, hotel values in
some parts of the country are approaching the levels registered during the
mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property's competitors. Included in the STR report are the Marriott
Quorum, the Westin Galleria, the Doubletree Lincoln Center, and the Sheraton
Park Central. The former three hotels are the properties which compete on a
primary basis with the Grand Kempinski. The Sheraton Park Central is not a
direct competitor, primarily due to its somewhat remote location. However, we
have included it in this survey in order to comply with STR's reporting
requirements, which mandate a sample of a minimum of four hotels. The subject
property only began reporting to STR in 1994; thus, the inclusion of the
Sheraton in place of the Grand Kempinski enables us to study area trends since
1991.
The STR data is presented in the following table, and includes the marketwide
occupancy, average rate, and rooms revenue per available room (RevPAR). RevPAR
is calculated by multiplying occupancy by average rate, and provides an
indication of how well rooms revenue is being maximized.
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Table 6-1 Historical Room Supply and Demand Trends (STR)
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<TABLE>
<CAPTION>
Year-to-Date Through Average Annual
--------------------
February Compounded Growth
--------
1991 1992 1993 1994 1995 1996 1996 1997 1991-1996
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 2,024 2,024 2,024 2,024 2,024 2,024 1,990 2,024
Room Supply 738,760 738,760 738,760 738,760 738,760 738,760 119,416 119,416
Percent Change --- 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % --- 0.0 % 0.0 %
Room Demand 472,482 502,194 529,070 574,672 568,372 578,907 96,853 91,112
Percent Change --- 6.3 % 5.4 % 8.6 % -1.1 % 1.9 % --- -5.9 % 4.1 %
Occupancy 64.0 % 68.0 % 71.6 % 77.8 % 76.9 % 78.4 % 81.1 % 76.3 %
Percent Change --- 6.3 % 5.4 % 8.6 % -1.1 % 1.9 % --- -5.9 % 4.1 %
Average Rate $82.95 $85.21 $84.14 $90.94 $101.48 $111.07 $110.75 $121.18
Percent Change --- 2.7 % -1.3 % 8.1 % 11.6 % 9.4 % --- 9.4 % 6.0 %
RevPAR $53.05 $57.93 $60.26 $70.74 $78.08 $87.04 $89.83 $92.45
Percent Change --- 9.2 % 4.0 % 17.4 % 10.4 % 11.5 % --- 2.9 % 10.4 %
</TABLE>
Please note that we did not include the subject property in this competitive
set, but rather, the Sheraton Park Central, for the subject property failed to
report to STR prior to 1994.
Source: Smith Travel Research, Inc.
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus,
they are considered relevant to this study. Moreover, as previously noted, the
present sample includes four hotels which have reportedly been contributing data
consistently since 1991. This information is therefore believed to be a
reasonable gauge of market trends.
As illustrated by the preceding table, supply has remained constant among this
competitive set since 1991. Our research indicates that, during this five-year
period, some limited-service hotels (consisting primarily of economy and
extended stay properties) opened in the north Dallas area. None of these is
considered to be primarily competitive with the subject property. As a result of
the constancy of the room supply, the reported changes in occupancy mirror the
movements in room night demand shown in the table.
Marketwide demand increased at an average annual compounded rate of 4.1% between
1991 and 1996, with a high of 8.6% in 1994, followed by a decline of 1.1% in
1995. The dramatic growth evident since 1991 is somewhat misleading, as 1991 was
a uniformly poor year for the hotel industry throughout the U. S., due to the
effects of the Gulf War and the deepening of the national recession. The strong
recovery achieved since 1991 indicates that the market achieved an early
recovery from the recession; this interpretation is consistent with the economic
trends discussed previously in this report. Marketwide occupancy levels have
reached the high 70% range in each of the last three years. Year-to-date through
February data indicates a significant downturn, which is almost wholly
attributable to soft performance in the month of January. Although market
sources were unable to provide a specific reason for this poor performance, all
of the managers with whom we spoke indicated that they expect to achieve
occupancy levels on par with 1996 results this year. As a large share of the
market demand is derived from the meeting and group segment, such a recovery is
considered to be achievable. Moreover, it is difficult to base the market's
future demand trends on these first two months alone.
Growth in average rate was minimal during the period 1991 through 1993, with a
2.7% increase followed by a 1.3% decline. This pattern of rate growth is
consistent with the concurrent increases in occupancy; area hotels
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offered a wider array of discounts, while deferring rate increases, in an effort
to regain profitable occupancy levels. In the past three years, as occupancy
levels have reached the high 70% range, the market strategy has been to pursue
average rate increase. While this strategy led to a minor 1.1% decrease in
occupancy in 1995, the overall success is evident in the double-digit increases
in RevPAR which have been achieved in the past three years.
Also sustaining the strong rate increase is the fact that the market has
effectively reached maximum occupancy levels, given the prevailing pattern of
demand. Since 1994, areawide occupancy levels have exceeded 75.0%. The strong
commercial orientation of the market results in peak occupancies on Monday
through Thursday nights, while the softer weekend demand curtails the occupancy
levels attainable during this period. As a result, the current occupancy levels
are close to the maximum attainable. The concentration of demand on these peak
nights has enabled area operators to achieve strong rate increases in the
commercial segment, which has been a significant factor in the overall rate
increases achieved.
Data for the year-to-date through February suggests that the upward trend in
average rate can be expected to continue over the near future. Despite a soft
January, occupancy levels are expected to remain in the mid- to high- 70% range.
With limited supply growth anticipated for the high end, full-service segment of
the market, these market dynamics should prevail over the next several years.
Overall, the market sustained an average annual compounded gain of 6.0% in
average rate between 1991 and 1996.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in North Dallas is
generated primarily by the following four market segments.
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Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Segment 4 Airline
Based on our field work, area analysis, and knowledge of the local lodging
market, we estimate the 1996 distribution of accommodated hotel room night
demand as follows.
================================================================================
Table 6-2 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
----------------------- -----------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- ------------------------------------------------------------------------
Commercial 269,000 47 % 55,000 40 %
Meeting and Group 206,000 36 64,000 46
Leisure 88,000 15 10,000 7
Airline 10,000 2 10,000 7
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Totals 572,000 100 % 139,000 100 %
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As shown above, the market area is primarily commercial in nature, with this
segment accounting for an estimated 47% of the total 1996 accommodated demand.
The meeting and group segment accounted for an estimated 36% of the 1996 demand,
while the leisure segment comprised an estimated 15%, and the airline segment
only 2% of total demand.
The subject property's distribution of demand differs rather significantly from
that of the market as a whole. A majority of the Grand Kempinski's 1996
occupancy (46%) was derived from the meeting and group segment; this
characteristic is consistent with the hotel's extensive inventory (+/-76,000
square feet) of meeting space, by far the largest in the competitive set. The
limited exposure of the Grand Kempinski name has contributed to the hotels
poorer participation in the commercial and leisure segments of the market. These
segments are more heavily influenced by brand name and reservation system than
is the meeting and group segment, and thus, the other, more well-known chains
outperform the Grand Kempinski in these areas. Finally, the Grand Kempinski is
currently the only hotel in the market which is participating in the airline
segment of the market.
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Using the distribution of accommodated hotel demand as a starting point, we will
analyze the characteristics of each market segment in an effort to determine
future trends in room night demand.
Commercial Segment
The commercial segment consists of individual business people who are visiting
various firms in the subject property's market. Commercial demand is strongest
Monday through Thursday nights, declines significantly on Friday and Saturday,
and increases somewhat on Sunday. In markets where the weekday occupancy
typically exceeds 90%, it is likely that some unaccommodated demand exists. The
typical length of stay ranges from one to three days, and the rate of double
occupancy is a low 1.2 to 1.3 people per room. Commercial demand is relatively
constant throughout the year, although some declines are noticeable in late
December and during other holiday periods.
Although there are numerous sub-segments which comprise the commercial segment,
the primary categories included herein are individual business travelers and
volume corporate accounts. Individual business travelers are typically visiting
firms in the immediate area or passing through en route to other destinations.
The lodging choices made by these persons are influenced by brand loyalty, and
in particular frequent traveler programs, as well as by location and convenience
to businesses and amenities. The volume corporate accounts category consists of
demand generated by local companies which produce a high volume of room night
demand; this demand can include employees of the firm or of affiliated
companies, and often includes training groups. These companies typically
designate one or several hotels as their "preferred" lodging facility; in
return, the selected hotels offer a rate which can represent a significant
discount from published levels. These rates are typically negotiated on an
annual basis, and the amount of the discount offered is tied to the number of
room nights produced.
Commercial demand in the North Dallas market is primarily generated by firms
related to the following industries: finance and banking, wholesale and retail,
telecommunications, and computing. Examples of such companies are Pizza Hut
International, Pepsico, EDS, IBM, J. C. Penney, Digital Switch Corporation,
American Express, CompUSA, Kodak, Mobil Oil, Mary Kay, and AT&T. In addition,
various small businesses are located in the office complexes along Dallas North
Tollway.
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All of the economic and demographic data presented previously correlates to some
extent with the commercial demand trends, though changes in the FIRE, services,
and wholesale trade employment sectors, total employment, occupied office space,
and air passenger counts are most directly correlated. Recent average annual
growth rates for these indicators have ranged from 0.2% to 3.0%. Smith Travel
Research has estimated that demand in the local market has increased by 4.1%
over the period 1991 to 1996. Our research indicates that the growth of
commercial demand has been similar to these levels. However, in more recent
years, this demand growth has tapered off, due primarily to the attainment of
maximum occupancies on the peak weeknights. With the opening of some new supply,
we anticipate that commercial demand (which comprises almost 50% of the total
market) will increase by 3.0% annually throughout our projection period.
It should be noted that the volume of new office space proposed for the North
Dallas corridor suggests that higher growth rates are likely in the near future.
However, the attainment of strong growth will continue to be constrained by the
amount of available supply. This circumstance should cushion the competitive
market in the event of any future additions to supply.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, conventions, trade
association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Because of vacations, the summer
months represent the slowest period for this market segment; winter demand
varies. The average length of stay for typical meetings and groups ranges from
three to five days. Most commercial groups meet during the weekday period of
Monday through Thursday, but associations and social groups will sometimes
gather on weekends. Commercial groups tend to have a low double occupancy of 1.3
to 1.5 people per room, while social groups are likely to have double occupancy
rates ranging from 1.5 to 1.9.
Meeting and group patronage is quite profitable for hotels. Although room rates
are discounted for large groups, the property benefits from the use of meeting
space and the revenues generated by in-house banquets and cocktail receptions.
Facilities that are necessary to attract meetings and groups include function
areas with adequate space for breakout, meals, and receptions; recreational
amenities; and a sufficient number of guestrooms to house the attendees.
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In the North Dallas market, this segment encompasses corporate group demand
generators which are predominantly based in the local area, although due to the
area's central location and mild weather, some national firms elect to have
their annual gatherings in Dallas. Demand from these groups peaks on weekdays
and during the spring and fall months. By contrast, the social gatherings which
comprise the balance of the market usually take place on weekends and in the
summer. National and Texas associations form the last category of this segment.
Associations typically make their hotel arrangements two to four years in
advance, which enables them to benefit from discounted rates and allows the
hotel more advance planning and flexibility.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and similar events are booked in advance, and thus,
growth in this segment tends to lag slightly behind increases in commercial
demand
Based on the relevant economic and demographic trends, we estimate that meeting
and group demand in the subject property's market area will increase by 2.0 %
annually throughout the projection period.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods and the summer months. These
peak periods are negatively correlated with commercial visitation, underscoring
the stabilizing effect of capturing weekend and summer tourist travel. The
typical length of stay ranges from one to four days, depending on the
destination and travel purpose, and the rate of double occupancy generally
ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment in the lodging
market. They may prefer low-rise accommodations where parking is convenient to
the rooms and often select accommodations which offer complimentary amenities
such as continental breakfast. Ease of highway access
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and proximity to tourist attractions and retail centers are important locational
considerations.
Leisure demand in the subject property's market is predominantly generated by
local individuals who are looking to get away from home, and are drawn to the
North Dallas market by the array of restaurants and shopping alternatives
available in the vicinity. Most of these visitors are drawn from within a 150
mile radius of the city. A smaller percentage is related to the local
population, visiting friends or relatives who live in the area. The majority of
this demand is generated on the weekend.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections. Using the data compiled earlier in this report, we
project that leisure demand will grow at a rate of 1.5% annually throughout the
projection period.
Airline Segment
Airline demand is generated by flight crews and delayed passengers. The airlines
typically contract rooms in nearby lodging facilities for extended periods to
ensure the availability of accommodations. Because they are able to guarantee a
specific level of usage on a daily basis, airlines can usually negotiate deeply
discounted room rates. This type of demand is advantageous because it provides a
base level of occupancy over a long period that normally includes weekends and
slow seasons. The occupancy benefit is offset by low contract room rates, which
have an adverse impact on average rate. Skilled hotel operators use airline
patronage to fill in during periods of low occupancy, and quickly displace this
demand when higher-rated market segments offer better potential.
The subject property is the only hotel in the competitive market which currently
accommodates an airline crew. The current contract is with Lufthansa, and
consists of a total of 25 rooms per night. Management representatives reported
that the hotel's contract with Lufthansa terminates March 31, 1998, but they
anticipate that the contract will be renewed at least through the first quarter
of 1999. Given the Kempinski's chain's affiliation with Lufthansa, it is
reasonable to expect that the subject property will continue to accommodate this
contract demand for the foreseeable future. However, we do not anticipate any
growth in the volume of contract demand accommodated by the subject property,
nor do we expect any of the
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other hotels in the market to pursue this segment. We have therefore forecasted
that the airline segment will remain stable throughout the projection period.
Conclusion
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, four segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
Annual Compounded Growth Rates
----------------------------------------------------
1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
- ----------------------------------------------------------------------------
Commercial 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 %
Meeting and Group 2.0 2.0 2.0 2.0 2.0 2.0
Leisure 1.5 1.5 1.5 1.5 1.5 1.5
Airline 0.0 0.0 0.0 0.0 0.0 0.0
Annual Average Growth 2.4 % 4.8 % 2.4 % 2.4 % 2.4 % 2.4 %
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. We have identified three properties
that are considered primarily competitive with Grand Kempinski Dallas. Including
the subject property, these primary competitors total 2,009 rooms. Although
there are numerous other first-class, full-service hotels in the Dallas area,
none are judged to be sufficiently similar and proximate to the subject property
to be considered secondarily competitive with the subject property.
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Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors. This information was compiled from personal interviews,
inspections, lodging directories, and our in-house library of operating data.
The table also sets forth each property's penetration factors; penetration is
the ratio between a specific hotel's operating results and the corresponding
data for the market. If the penetration factor is greater than 100%, the
property is performing better than the market as a whole; conversely, if the
penetration is less than 100%, the hotel is performing at a level below the
marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
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<TABLE>
<CAPTION>
Square Footage
----------------- Estimated 1996
Market Segmentation Estimated 1995
Meeting ------------------------------- 1994 -----------------------
Year No. of Meeting Space Mtg. & Published Average
Property/Location Opened Rooms Space per Room Comm. Group Leisure Airline Rates Occ. Rate RevPAR
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Grand Kempinski Dallas
15201 Dallas Parkway 1983 528 76,000 144 40 % 46 % 7 % 7 % $175-$195 73.5 % $97.41 $71.60
Dallas Marriott Quorum
14901 Dallas Parkway 1982 547 16,000 29 60 25 15 0 $129-$149 82.0 94.00 77.08
Westin Galleria
13340 Dallas Parkway 1983 431 35,978 83 45 35 20 0 $167-$177 81.0 131.00 106.11
Doubletree Lincoln Center
5410 LBJ Freeway 1982 502 25,000 50 40 40 20 0 $160-$180 72.0 90.00 64.80
- ----------------------------------------------------------------------------------------------------------------------------------
Totals and Averages 2,008 38,245 77 47 % 36 % 15 % 2 % 77.1 % $102.27 $78.80
</TABLE>
Estimated 1996
-------------------------------------------------
Average Occupancy Yield
Property/Location Occ. Rate RevPAR Penetration Penetration
- ----------------------------------------------------------------------------
Grand Kempinski Dallas 71.9 % $104.61 $75.21 92.1 % 86.2 %
15201 Dallas Parkway
Dallas Marriott Quorum 84.0 102.00 85.68 107.5 98.2
14901 Dallas Parkway
Westin Galleria 83.0 144.00 119.52 106.3 137.0
13340 Dallas Parkway
Doubletree Lincoln Center 74.0 100.00 74.00 94.7 84.8
5410 LBJ Freeway
- ----------------------------------------------------------------------------
Totals and Averages 78.1 % $111.74 $87.27 100.0 % 100.0 %
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the primarily competitive hotels in the North Dallas market shows
a well-defined market with a representation of nationally and internationally
recognized, full-service hotels. These properties range in size from 431 to 547
guestrooms, and are very similar in age as they all opened in the early 1980's.
The market demand has a commercial orientation; in 1996, this segment
contributed 47% of the overall occupancy. The meeting and group segment
comprised 36% of the total, followed by the leisure segment (at 15%), and the
airline segment (at 2%).
In 1996, the primary competitors achieved an overall occupancy of 78.1% at an
average rate of $111.73, yielding RevPAR of $87.27, which represents an
approximate 10% increase over 1995 levels. Although this increase was due
primarily to average rate growth, it is significant to note that despite that
increase the occupancy of the primary competitors increased by one point over
1995 results. The Marriott Quorum maintained the highest occupancy in 1996, at
84.0%, which equated to an occupancy penetration of 107.6%. This hotel's strong
performance is attributed to its well-recognized and respected brand. Ranked
second, closely behind the Marriott Quorum, was the Westin Galleria with an
occupancy of 83.0% and an occupancy penetration of 106.3%. The Westin's superior
location adjacent to the Galleria has helped to sustain this strong level, and
has also enabled this hotel to maintain the strongest average rate in the
market. The lowest occupancy penetration was registered by the subject property,
at 92.1%, which is attributed to its meeting and group orientation and its
unfamiliar brand to the U. S. traveling public.
The highest RevPAR in 1996 was achieved by the Westin Galleria, due to the
average rate levels attained by this property, which contributed to a 137.0%
yield penetration - the highest in the market. At 84.8%, the Doubletree Lincoln
Center realized the lowest yield penetration, and the subject property surpassed
the Doubletree, with a yield penetration of 86.2%.
Each primary competitor was inspected and evaluated. Descriptions of our
findings are presented below.
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Dallas Marriott Quorum
Location: 14901 Dallas Parkway
Number of Rooms: 547
1996 Estimated Occupancy: 84.0%
1996 Estimated Average Rate: $102.00
1996 Estimated RevPAR: $85.68
The 547-room Marriott Quorum was built in 1982. This property is located
approximately one quarter of a mile south of the Grand Kempinski, west of the
Dallas North Tollway and north of I-635 LBJ Freeway.
In addition to standard guestrooms, the hotel features 15 suites (included in
the above room count), 16,000 square feet of meeting and banquet space (which
includes a +/-9,500-square-foot ballroom, and two junior ballrooms which
accommodate up to 200 people each), two restaurants, a lobby bar, an
indoor/outdoor swimming pool, a whirlpool, a sauna, lighted tennis and
basketball courts, and an exercise room.
The Marriott Quorum underwent an estimated $3 million soft and case goods
renovation throughout 1994 and 1995, and the property appeared to be in good
condition at the time of our inspection. Guests staying on the Concierge Level
can enjoy complimentary breakfasts, afternoon cocktails, and access to the
Concierge Lounge. The hotel is owned by Host Marriott, and has no current plans
for expansion.
Approximately 60% of the Marriott Quorum's demand is generated from the
commercial segment. The remaining 40% of accommodated demand at the Marriott
Quorum in 1996 was made up of 25% meeting and group and 15% leisure. The
Marriott competes with the Grand Kempinski by virtue of location, facilities and
market orientation. This hotel has an advantage over the subject property due to
its preeminent brand name, but offers significantly less meeting space than does
the Grand Kempinski.
The Marriott Quorum achieved an 82.0% occupancy in 1995 at a $94.00 average
rate. Occupancy increased to 84% in 1996, and average rate rose to $102.00,
which equated to a roughly 11% gain in RevPAR. For estimated year-end 1996, the
Marriott Quorum's yield penetration was 98.2%.
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Westin Galleria
Location: 13340 Dallas Parkway
Number of Rooms: 431
1996 Estimated Occupancy: 83.0%
1996 Estimated Average Rate: $144.00
1996 Estimated RevPAR: $119.52
Opened in January of 1983, the 431-room Westin Hotel is attached to the Galleria
retail and office tower complex. This property is located approximately two
miles south of the subject property, in the northeast quadrant of the
intersection of I-635 LBJ Freeway and Dallas Parkway.
In addition to standard guestrooms, the hotel features 12 suites (included in
the above room count) and approximately 36,000 square feet of meeting space,
including an +/-11,850-square-foot ballroom and a +/-5,510-square-foot junior
ballroom. The property benefits from a wide array of food and beverage outlets;
the hotel itself features three restaurants, including the Four Star-rated
Huntington's restaurant, and a lobby bar. Additional food and beverage options
are available in the Galleria mall. Recreational amenities at this property
include a heated outdoor swimming pool, a sundeck, and a one-half-mile lighted
outdoor jogging track; a state-of-the-art fitness center is located in the
Galleria mall, and is available to hotel guests.
The facilities of the Westin Hotel are currently in excellent condition, and may
be considered superior to those offered by the subject property. During the past
three months, 415 guestrooms were renovated, including case and soft goods. The
meeting rooms were renovated in 1996 and the ballroom in 1995. According to
management representatives, the hotel has plans to add 17 guestrooms on the 21st
floor, replacing the existing suites which will then be relocated in the space
currently occupied by banquet rooms. The property is owned by North Dallas
Galleria Venture (a joint-venture between Hines and Westin Inc.), and it is
managed by Westin. This property has a Three-Star 1996 Mobil Travel Guide
rating.
Roughly 45% of the Westin's demand is derived from the commercial segment, and
35% is generated by the meeting and group segment. Due to its premiere location,
the Westin can be very selective in its accommodation of corporate accounts, and
tend to serve only the highest rated segments of this market. Meeting and group
demand consists primarily of smaller in-house corporate meetings and
conferences, and again the strength of the demand experienced by this hotel
enables management to achieve aggressive prices in meeting and group segment.
The remaining 20% of the
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Westin's demand is derived from the leisure segment; the hotel's connection to
the Galleria Shopping Mall allows the Westin to enjoy a favorable leisure
location. The Westin achieved an 81.0% occupancy in 1995 at a $131.00 average
rate. Occupancy increased to 83.0% in 1996, while average rate improved to
$144.00, which resulted in a 12.6% improvement in RevPAR in 1996. The Westin's
yield penetration in 1996 was 137.0%; this market strength should continue given
the hotel's location, its superior rooms product, and its high service standard.
Doubletree Lincoln Center
Location: 5410 LBJ Freeway
Number of Rooms: 502
1996 Estimated Occupancy: 74.0%
1996 Estimated Average Rate: $100.00
1996 Estimated RevPAR: $74.00
The 502-room Doubletree Lincoln Center was built in 1982, and was originally
operated as a Lincoln Hotel. This property is located approximately two miles of
the subject property, in the southeast quadrant of the intersection of I-635 LBJ
Freeway and Dallas Parkway, immediately to the south of the Westin Galleria.
In addition to standard guestrooms, the hotel features 16 suites (included in
the above room count), and roundly 25,000 square feet of meeting space,
including a +/-9,300-square-foot ballroom. Food and beverage outlets include two
restaurants, two lounges, and a deli. Recreational amenities consist of an
outside pool, an exercise room, a jogging track around the hotel's landscaped
lake, and access to the Lincoln City Club (a fully equipped health facility
adjacent to the hotel) for an $11.00 fee per day. This property also features
four executive levels; guests staying on these levels can enjoy free fax service
and local calls, complementary continental breakfast and hors d'oeuvres, and
free access to the Lincoln City Club.
The guestrooms' case and soft goods were renovated in 1996, and in 1997
renovations included the lobby and the suites' soft goods. Overall, the
improvements appeared to be in very good condition. The property is owned by
Metropolitan Life and it is managed by Doubletree Hotel Corporation.
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Approximately 40% of the guests accommodated by the Doubletree Lincoln Center in
1996 were considered commercial travelers. Another 40% was generated by the
meeting and group segment, and roundly 20% was derived from leisure travelers.
The Doubletree Lincoln Center achieved a 72.0% occupancy in 1995, at a $90.00
average rate. Occupancy increased to 74.0% in 1996 while average rate increased
to $100.00, equating to a roughly 9% gain in RevPAR. For the calendar year 1996,
the operating statistics for the Doubletree Lincoln Center equated to an 84.8%
yield penetration.
Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the market
and our discussions with local hotel operators, developers, and government
officials, we have identified two proposed hotel in the North Dallas market area
which are expected to be competitive with the subject property.
A 150-room Embassy Suites is being developed at the intersection of Spring
Valley Road and Noel Road, approximately one mile southeast of the subject
property. This new, all-suite property is expected to open in January of 1998,
and will feature +/-2,800 square feet of meeting space and one food and beverage
outlet. The project is being developed by Remington Hotel Corporation with
financing provided by Nomura Asset Capital. The hotel will reportedly be
operated by Remington Hotel Corporation under a franchise agreement with Promus
Hotel Corporation. Given the proximity of the Embassy Suites and its expected
service and quality level, we believe that it will be primarily competitive with
the subject property.
A 176-room, full-service Courtyard by Marriott is proposed for a site on Quorum
Drive, just behind Trulecks Steaks and Stone Crab Restaurant on Beltline Road,
and within walking distance south of the subject property. This property is
expected to be under construction by the summer of 1997 and to open in the
middle of 1998. The project is being developed by Gene Carter, and has received
all necessary Marriott approvals. The final loan documents for the financing of
this project are reportedly being prepared. The project has not yet received the
necessary approval from the Town of Addison, and is scheduled for review by the
Council on May 13, 1997. For the purposes of this appraisal, we have assumed
that this project will be completed as scheduled. Given the proximity of the
Courtyard and its
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product type, we believe that it will be 50% competitive with the subject
property.
According to a F. W. Dodge Report pertaining to proposed hotel projects in
Dallas County, a 315-room luxury hotel project is currently in the preliminary
discussion stage in the subject site's market area. The property is reportedly
proposed for the corner of Beltline Road and Dallas North Tollway, in the
immediate vicinity of the subject property. Development costs associated with
this project have been estimated at between $30,000,000 and $40,000,000. The
developer of the project is reportedly Southwest Properties Group of Dallas, but
no finalized development plans or possible franchise affiliations have been
announced. Moreover, officials of the city of Addison are currently unaware of
any such proposed development. Because this project is only in the discussion
stage, we have not explicitly considered it as new room supply in our analysis.
However, we will take the possibility of any such future development into
consideration in our selection of a stabilized occupancy for the subject
property.
In addition, it must be noted that several limited-service properties are either
proposed or under development in the region. These include a Townplace Suites by
Marriott and a Fairfield Suites. These developments are not likely to hurt the
hotels in the competitive set, although such properties can dilute areawide
occupancies during the softer periods of the week and year, particularly with
respect to the more rate-sensitive component of the leisure segment.
Finally, the question of hotels proposed for development in the Legacy market
area must be considered. As previously described, the Legacy office park is
situated approximately 15 miles north of the subject market area, in the City of
Plano. This development currently consists of several major office headquarters,
including J. C. Penney and Frito Lay, with little supporting commercial
development in the area. However, a mall is to be constructed in the Legacy
region, and other commercial development is expected to follow thereafter. Given
the nature of the business in the Legacy area, it is inevitable that at least
one first-class hotel will be developed in that area. In fact, representatives
of Westin report that they have a letter of intent with a local developer for a
300-room hotel in this vicinity; however, no other details have been established
and neither debt nor equity is yet in place for this project.
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HVS International, Mineola, New York Lodging Market Supply and Demand 77
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The development of first-class lodging facilities in Legacy can be expected to
have some impact on the hotels in the competitive set, as the businesses in this
area are among the leading generators of demand in the North Dallas market.
However, the current resurgence of office space development in the subject
neighborhood can reasonably be expected to generate sufficient demand to
substantially offset the negative impact of developments at Legacy. This
contention is particularly true, as the hotel development in that area is in the
extreme preliminary stages, and not expected to reach fruition before the Year
2000, while the office space development in the North Dallas is much farther
along.
In order to reflect the probable impact of future hotel development in the
Legacy area on the subject property and competitive market, we have included a
300-room hotel in our analysis. This hotel is assumed to open on or about
January 1, 2000. Due to its distance from the subject property, this hotel would
only be 50% competitive with the Grand Kempinski.
Conclusion
A review of historical demand trends in the subject property's area indicates
that the market is very strong and has completely recovered from both the
national and regional recession. While supply has remained constant over recent
years, growth in demand has been increasing and area wide occupancy is reaching
peak levels. This strong performance has enabled the hotel's in the market to
sustain relatively strong rate increases in the past three years.
Based on our review of the local area, four primary market segments were defined
within the subject property's lodging market. Growth rates for each segment were
forecasted based upon an analysis of the economic and demographic trends that
appeared to significantly impact lodging demand. In general, demand is
anticipated to increase at moderate rates throughout the projection period, with
the limited amount of new supply expected to constrain growth. We have
identified a total of three lodging facilities that are considered competitive
with the subject hotel.
We have reviewed the hotel projects proposed for the area. Given the favorable
commercial location of the subject property and the improving nature of the
North Dallas market, we expect that the Grand Kempinski will continue to perform
well.
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7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and rooms revenue per available room (RevPAR). For the purpose of
comparison, we have also presented corresponding data (as provided by Smith
Travel Research) for the competitive hotels described in the previous section.
In addition to the annual percent change calculations, we have determined the
subject property's occupancy, average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
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<TABLE>
<CAPTION>
Average Annnual
Compounded Growth
1991 1992 1993 1994 1995 1996 1991-1996
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subject Property
Occupancy 62.7 % 60.9 % 63.9 % 72.7 % 73.5 % 71.9 %
Percent Change --- (2.9)% 4.9 % 13.8 % 1.1 % (2.2)% 2.8 %
Occupancy Penetration 98.0 % 89.6 % 89.2 % 93.5 % 95.5 % 91.8 %
Average Rate $79.45 $85.40 $88.54 $91.32 $97.41 $104.61 %
Percent Change --- 7.5 % 3.7 % 3.1 % 6.7 % 7.4 % 5.7 %
Average Rate Penetration 95.8 % 100.2 % 105.2 % 100.4 % 96.0 % 94.2 %
RevPAR $49.82 $52.01 $56.58 $66.39 $71.60 $75.21 %
Percent Change --- 4.4 % 8.8 % 17.3 % 7.8 % 5.1 % 8.6 %
RevPAR Penetration 93.9 % 89.8 % 93.9 % 93.8 % 91.7 % 86.4 %
Areawide (STR)
Occupancy 64.0 % 68.0 % 71.6 % 77.8 % 76.9 % 78.4 %
Percent Change --- 6.3 % 5.4 % 8.6 % (1.1)% 1.9 % 4.1 %
Room Rate $82.95 $85.21 $84.14 $90.94 $101.48 $111.07
Percent Change --- 2.7 % (1.3)% 8.1 % 11.6 % 9.4 % 6.0 %
RevPAR $53.05 $57.93 $60.26 $70.74 $78.08 $87.04
Percent Change --- 9.2 % 4.0 % 17.4 % 10.4 % 11.5 % 10.4 %
</TABLE>
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Since 1991, the Grand Kempinski DallasGrand Kempinski Dallas has experienced
lower-than-average occupancies, with occupancy penetration rates lower than
100%. It appears that while the market showed a healthy 6.3% increase in
occupancy in 1992, the subject property's occupancy was hurt by the nationwide
recession, and dropped by 2.9%. Three major reasons behind this observation are
the lack of a nationally recognized brand name, the meeting and group
orientation of the hotel, and the above market increase in average rate adopted
at that time, which either hurt or at least did not help the hotel go through
the recession. In 1993 and 1994, the hotel appeared to have recovered, and
exhibited strong results, with occupancy annual average growths of 4.9% and
13.8%, respectively, compared to 5.4% and 8.6%, respectively, for the market. In
1995 and 1996, the growth in occupancy slowed, and the hotel achieved
occupancies in the low 70s, while those of the market were in the high 70s.
Average rate, on the other hand, has sustained a healthy growth from 1991 to
1996, and the subject property
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exhibited average rate penetration levels higher than 100% from 1992 to 1994. In
1995 and 1996, the growth in average rate at the subject property, although
stronger than in the previous years, was outperformed by the market as a whole,
with increases of 11.6% and 9.4%, respectively. Because of the subject
property's low occupancy, its RevPAR has been consistently lower than the market
average RevPAR from 1991 to 1996, and its RevPAR penetration did not once reach
100% during that time.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we
believe would be implemented by competent hotel management to achieve an optimal
mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365).
The total annual number of room nights occupied in the competitive hotels
equates to the market's accommodated room night demand, as shown in the
following table.
================================================================================
Table 7-2 1996 Accommodated Room Night Demand
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Marketwide Subject Property
---------------------- ----------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
------------------------------------------------------------------
Commercial 269,000 47 % 55,000 40 %
Meeting and Group 206,000 36 64,000 46
Leisure 88,000 15 10,000 7
Airline 10,000 2 10,000 7
------------------------------------------------------------------
Totals 572,000 100 % 139,000 100 %
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Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply; latent demand can be divided into unaccommodated demand and induced
demand.
Unaccommodated Demand
Unaccommodated demand refers to individuals who are unable to secure
accommodations in the market because all of the local hotels are filled. These
travelers must defer their trips, settle for less desirable accommodations, or
stay in properties located outside the market area. Because this demand did not
yield occupied room nights, it is not included in the estimate of historical
accommodated room night demand.
In the subject market area, areawide occupancy on weekdays and particularly
Tuesday and Wednesday nights exceeds 90% for most weeks of the year. Most hotels
report high levels of turnaway demand during these periods. As a result, we have
estimated unaccommodated demand in the commercial segment to be equal to 5% of
the accommodated commercial demand, which equates to 13,452 room nights per
year, or an average of roundly 65 rooms on a typical Monday through Thursday
night. As the Embassy Suites and the Courtyard will be increasing the room
supply by a total of 228 competitive rooms, this level of unaccommodated demand
is deemed reasonable.
================================================================================
Table 7-3 1996 Accommodated and Unaccommodated Demand
- --------------------------------------------------------------------------------
Accommodated
Room Night Unaccomodated Unaccomodated
Market Segment Demand Demand Percentag Room Night Demand
--------------------------------------------------------------------
Commercial 269,000 5.0 % 13,452
Meeting and Group 206,000 0.0 0
Leisure 88,000 0.0 0
Airline 10,000 0.0 0
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Totals 572,000 13,452
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Induced Demand
Induced demand represents the additional room nights that are expected to be
attracted to the market following the introduction of a new demand generator.
Situations that can induce demand include the opening of a new manufacturing
plant, the expansion of a convention center, or the addition of a new hotel with
a distinct chain affiliation or unique facilities.
Although three new hotels are forecast to open during the projection period,
none of these facilities are expected to induce demand, as the properties offer
standard amenities and are affiliated with brands that are represented in
adjacent market areas.
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand. Usable latent demand is that portion of latent demand that
can be absorbed based on the number of existing and proposed hotel rooms in the
market.
The following table shows the projected annual change in accommodated and usable
room night demand in the subject property's competitive market.
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Table 7-4 Total Usable Room Night Demand
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<TABLE>
<CAPTION>
Historical 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
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<S> <C> <C> <C> <C> <C> <C> <C>
Commercial
Growth Rate --- 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 %
Accommodated Demand 269,046 277,117 285,431 293,994 302,814 311,898 321,255
Usable Latent --- 0 14,272 14,700 15,141 15,595 16,063
Meeting and Group
Growth Rate --- 2.0 % 2.0 % 2.0 % 2.0 % 2.0 % 2.0 %
Accommodated Demand 205,604 209,716 213,910 218,188 222,552 227,003 231,543
Usable Latent --- 0 0 0 0 0 0
Leisure
Growth Rate --- 1.5 % 1.5 % 1.5 % 1.5 % 1.5 % 1.5 %
Accommodated Demand 88,088 89,409 90,750 92,111 93,493 94,895 96,318
Usable Latent --- 0 0 0 0 0 0
Airline
Growth Rate --- 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Accommodated Demand 9,700 9,700 9,700 9,700 9,700 9,700 9,700
Usable Latent --- 0 0 0 0 0 0
Totals
Commercial 269,046 277,117 299,703 308,694 317,955 327,493 337,318
Meeting and Group 205,604 209,716 213,910 218,188 222,552 227,003 231,543
Leisure 88,088 89,409 90,750 92,111 93,493 94,895 96,318
Airline 9,700 9,700 9,700 9,700 9,700 9,700 9,700
TOTAL DEMAND 572,438 585,942 614,063 628,693 643,700 659,091 674,879
Annual Forecasted Growth --- 2.4 % 4.8 % 2.4 % 2.4 % 2.4 % 2.4 %
</TABLE>
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Guestroom Supply
In 1996, the competitive properties provided a total of 2,009 guestrooms. In
January, 1998, a 150-room Embassy Suites will enter the market, and in July of
1998, a Courtyard by Marriott will do the same. As mentioned previously, in
January, 2000, we project that a 300-room property will come on line. The
following table shows the projected competitive supply of available rooms and
available room nights. To calculate the annual number of available room nights,
the number of available rooms is multiplied by 365.
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Table 7-5 Available Rooms and Room Nights
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Total Room Overall
Night Room Nights Competitive
Year Demand Available Occupancy
Historical 572,438 732,920 78 %
1997/98 585,942 746,425 78
1998/99 614,063 811,760 76
1999/00 628,693 833,295 75
2000/01 643,700 874,540 74
2001/02 659,091 874,540 75
2002/03 674,879 874,540 77
2003/04 691,075 874,540 79
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Overall Competitive Occupancy
In 1998/99, the projected overall competitive occupancy drops two percentage
points, following the opening of the Embassy Suites and the Courtyard. In
1999/00, the full-year availability of the Courtyard causes the occupancy to
drop again to 75%. The opening of the 300-room hotel in 2000/01 leads to a
further decline (from 75% to 74%) in the competitive occupancy, but due to
strong growth, occupancy is estimated to start to increase again in 2001/02.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or airline), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate each property's position in the market based
on its ability to compete with other local lodging facilities.
Commercial Segment
The historical commercial segment competitive indexes in the subject property's
market ranged from 105 to 184. The Dallas Marriott Quorum was the most
competitive property in the commercial market in 1996, with an index of 184, due
to its highly recognized name among commercial travelers. The Westin Galleria
was the second most competitive in the commercial
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segment, with an index of 136, followed by the Doubletree Lincoln Center, at
108, and the subject property closely behind, at 105.
We estimate that the Embassy Suites will be very competitive in the commercial
segment, entering in second position behind the Marriott, at 165 in 1997/98, and
stabilizing at a competitive index of 180. The Courtyard will be slightly more
competitive than the Embassy Suites in its first year of operation, but it will
take the lead thereafter, with a stabilized competitive index of 190, which
makes it the market leader in this segment of the market. The 300-room Legacy
hotel will be less competitive, but it will still enter the market in fourth
position behind the Marriott, the two-year old Embassy Suites, and the
one-and-one-half year old Courtyard, with a competitive index of 140 in 1999/00,
and stabilizing at 160 - still in fourth position. The following table shows the
projected commercial segment competitive indexes of the area's hotels.
================================================================================
Table 7-6 Commercial Segment Competitive Indexes
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<TABLE>
<CAPTION>
Property Historical 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Kempinski Dallas 105 105 105 105 105 105 105
Dallas Marriott Quorum 184 184 184 184 184 184 184
Westin Galleria 136 136 136 136 136 136 136
Doubletree Lincoln Center 108 108 108 108 108 108 108
Proposed Embassy Suites 0 165 175 180 180 180 180
Proposed Hotel 0 0 0 140 150 160 160
Courtyard 0 0 175 185 190 190 190
</TABLE>
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Meeting and Group Segment
The historical meeting and group segment competitive indexes in the subject
property's market ranged from 77 to 121. The subject property was the most
competitive property in the meeting and group market in 1996, with an index of
121, due to the nature of its product. The Doubletree Lincoln Center was the
second most competitive hotel in the meeting and group segment with an index of
108.
We do not project neither the Embassy Suites nor the Courtyard to be very
competitive in the meeting and group segment, stabilizing with a competitive
index of 40 and 30 respectively, due to the small amount of planned meeting
space in these properties. Although we anticipate the 300-room Legacy hotel to
feature more meeting space than the Embassy Suites or the
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Courtyard, we do not expect it to be equally competitive to the existing hotels
in our competitive set, therefore it will enter the market in fourth position,
and to stabilize at an index of 100.
The following table illustrates the competitive indexes in the meeting and group
segment.
================================================================================
Table 7-7 Meeting and Group Segment Competitive Indexes
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<TABLE>
<CAPTION>
Property Historical 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Kempinski Dallas 121 121 121 121 121 121 121
Dallas Marriott Quorum 77 77 77 77 77 77 77
Westin Galleria 106 106 106 106 106 106 106
Doubletree Lincoln Center 108 108 108 108 108 108 108
Proposed Embassy Suites 0 25 35 40 40 40 40
Proposed Hotel 0 0 0 80 90 100 100
Courtyard 0 0 20 25 30 30 30
</TABLE>
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Leisure Segment
Historically, the Westin Galleria was the most competitive in the leisure
segment, with an index of 61, due to its location adjacent to the Galleria Mall.
The second most competitive property in this segment was the Doubletree Lincoln
Center, with an index of 54, while the subject property has been the least
competitive, with an index of 18.
We estimate that the Embassy Suites will become the most competitive property in
the leisure segment, since its suite product is popular with families. This
property will enter as the second most competitive hotel in 1997/98, with an
index of 60, and will increase to and stabilize at an index of 75. The Courtyard
will also be very competitive in the leisure segment, which tends to be more
rate sensitive. It will enter in third place with an index of 50 and will
stabilize just behind the Embassy Suites at 70. The 300-room Legacy hotel is
expected to enter the market in fifth position, just ahead of the subject
property, with a competitive index of 20, and will stabilize at an index of 30,
since this property is located in an area which is predominantly commercial in
nature and still needs to be developed with supporting facilities such as
shopping centers, and restaurants.
The following table illustrates the competitive indexes in the leisure segment.
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Table 7-8 Leisure Segment Competitive Indexes
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<TABLE>
<CAPTION>
Property Historical 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Kempinski Dallas 18 18 18 18 18 18 18
Dallas Marriott Quorum 46 46 46 46 46 46 46
Westin Galleria 61 61 61 61 61 61 61
Doubletree Lincoln Center 54 54 54 54 54 54 54
Proposed Embassy Suites 0 60 70 75 75 75 75
Proposed Hotel 0 0 0 20 25 30 30
Courtyard 0 0 55 65 70 70 70
</TABLE>
- --------------------------------------------------------------------------------
Airline Segment
As a hotel's occupancy improves, its reliance on airline demand generally
diminishes. Because this segment commands deeply discounted rates, operators
prefer to accommodate more lucrative types of demand whenever possible.
The subject property is the only hotel to accommodate an airline crew, and we
anticipate this segment to remain stable throughout the projection period.
================================================================================
Table 7-9 Airline Segment Competitive Indexes
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Historical 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Kempinski Dallas 18 18 18 18 18 18 18
Dallas Marriott Quorum 0 0 0 0 0 0 0
Westin Galleria 0 0 0 0 0 0 0
Lincoln Center 0 0 0 0 0 0 0
Proposed Embassy Suites 0 0 0 0 0 0 0
Proposed Hotel 0 0 0 0 0 0 0
Courtyard 0 0 0 0 0 0 0
</TABLE>
- --------------------------------------------------------------------------------
Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected
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number of room nights captured by the property's total number of available room
nights.
Multiplying the subject property's projected market share by the estimated room
night demand in each segment results in the following estimate of room nights
captured by the hotel.
================================================================================
Table 7-10 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
-------------------------------------------------------
Commercial
Demand 277,117 299,703 308,694 317,955 327,493 337,318
Market Share 0.2016 0.1808 0.1747 0.1654 0.1647 0.1647
Capture 55,862 54,172 53,923 52,597 53,934 55,552
Meeting and Group
Demand 209,716 213,910 218,188 222,552 227,003 231,543
Market Share 0.3089 0.3007 0.2943 0.2802 0.2783 0.2783
Capture 64,778 64,318 64,217 62,348 63,179 64,443
Leisure
Demand 89,409 90,750 92,111 93,493 94,895 96,318
Market Share 0.1053 0.0930 0.0899 0.0870 0.0864 0.0864
Capture 9,412 8,440 8,276 8,135 8,201 8,324
Airline
Demand 9,700 9,700 9,700 9,700 9,700 9,700
Market Share 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
Capture 9,700 9,700 9,700 9,700 9,700 9,700
------- ------- ------- ------- ------- -------
Total Capture 139,752 136,630 136,116 132,780 135,014 138,018
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 528 x 365) produces the
projected occupancy percentage.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 89
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Table 7-11 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Room Nights
Captured/Year 139,752 136,630 136,116 132,780 135,014 138,019
Available Room Nights 192,720 192,720 192,720 192,720 192,720 192,720
Occupancy 72.52% 70.90% 70.63% 68.90% 70.06% 71.62%
Rounded 73% 71% 71% 69% 70% 72%
</TABLE>
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
================================================================================
Table 7-12 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
-----------------------
1997/98 73 %
1998/99 71
Stabilized 71
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 72% occupancy in 2002/03, we have chosen a stabilized level of 71%. The
stabilized occupancy is intended to reflect the anticipated results of the
property over its remaining economic life, given any and all changes in the life
cycle of the hotel. Thus, the stabilized occupancy excludes from consideration
any abnormal relationship between supply and demand, as well as any
non-recurring conditions that may result in unusually high or low occupancies.
Although the subject property may operate at occupancies above this stabilized
level, we believe that it is equally possible for new competition and temporary
economic downturns to force the occupancy below this selected point of
stability.
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 90
Average Rate
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AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which, in turn, provides the basis for estimating most other income and
expense categories.
The Concept of Average Rate
A hotel's average room rate is the weighted average of the various amounts
charged to different market segments, such as rack rates, published rates,
commercial rates, and contract rates. The average rate also takes into account
differentials during peak and off-peak periods, including various seasons of the
year, holidays, and weekends. Different types of rooms may also command varying
rates, and thus have an impact on the overall average rate. The following is a
description of several typical rate categories.
o Rack Rate - An undiscounted room rate generally given to anyone who does
not qualify for or request a discounted rate. The term is derived from the
room rack (now a computer terminal) at the front desk, which contains
information about each room's rate, including the highest amount that can
be charged for that type of unit. When a hotel is expected to be full
during a certain period or when a guest arrives without a reservation, the
rack rate is usually the only rate available. The average rate is almost
always lower than the rack rate.
o Published Rate - The rate listed in directories and other publications.
This rate is usually quoted as a range (i.e., single: $70-$100), and
represents the various rack rates for specific types of accommodations.
Published rates usually set the upper limit of average rate, and average
rates tend to be closest to published rates in the case of single (rather
than double) rooms.
o Commercial Rate - A discounted rate available to certain commercial
travelers. Some hotels charge all commercial travelers a commercial rate
upon request, while others offer it only to established accounts based on
their projected use of the hotel. Commercial rates vary because they can
be negotiated between the business and the hotel. These rates are always
below the rack and published rates and, depending on the market mix, may
approximate the property's average rate.
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o Contract Rate - A discounted rate available to specific high-volume users,
such as airlines, convention groups, and bus tours. Contract rates are
negotiated and often apply to a block of rooms that are reserved on an
ongoing basis and paid for regardless of use. Depending on the amount of
use and the time it occurs, a contract rate may be heavily discounted and
thus significantly lower than both the average rate and the commercial
rate.
o Complimentary Rooms - It is customary for hotels to provide rooms to very
important guests on a complimentary basis. When performing a room night
analysis, complimentary rooms should be included in the occupancy
projection, because these occupied rooms represent actual demand (although
they generate no revenue). However, the inclusion of complimentary rooms
in the occupancy lowers the calculated average rate, and thus the
treatment of complimentary rooms in the average rates obtained from
competitive properties must be consistent in order to draw an accurate
rate comparison.
In the case of existing lodging facilities, we can use the operating history as
a starting point and project average rate based on market conditions and the
property's relative degree of competitiveness. This process is outlined as
follows.
1. The subject property's historical monthly average rate is analyzed to
determine trends that may continue to influence operating performance. Any
relationship between changes in average rate and occupancy should be taken
into account.
2. The average rates of competitive properties are considered to determine
whether the subject property's rates reflect market conditions, competent
management, and buyer's expectations.
3. Factors that may have an impact on future average rate increases are
analyzed, and annual growth rates are projected.
4. The subject property's average rate is projected using either a
competitive positioning or market segmentation method. These two
techniques are described as follows.
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Competitive Positioning Method: Competitive positioning begins with an analysis
of the average rates achieved by the subject property and its competitors. These
rates establish a range that reflects various market characteristics, such as
rate sensitivity and demand orientation. The subject property's average rate is
then compared to those of the hotels to which it is most similar in terms of
quality, size, facilities, amenities, market orientation, location, management,
image, and affiliation. Adjustments are made to reflect any relevant differences
or anticipated changes resulting from a new owner, a change of affiliation, or
market repositioning. This method works well if the subject property is an
existing hotel and comparable properties can be found in the market.
Market Segmentation Method: The advantage of the market segmentation method is
its ability to reflect anticipated changes in the subject property's market mix
and their impact on average rate. This technique begins with an analysis of the
room rates commanded by local hotels in each market segment. Using this
information, we can forecast the subject property's rate on a segment-by-segment
basis. The projected rate in each segment is then multiplied by the number of
room nights the hotel is expected to capture in that segment (as determined
earlier in this analysis). These amounts are totaled, yielding the overall rooms
revenue. Average rate is then calculated by dividing the property's total rooms
revenue by the estimated number of occupied rooms.
The subject property's average rate will be projected utilizing the market
segmentation method. Although the average rate analysis presented here follows
the occupancy projections, these two statistics are highly correlated; in
reality, one can not project occupancy without making specific assumptions
regarding average rate. This relationship is best illustrated by RevPAR, which
reflects a property's ability to maximize rooms revenue. The following table
summarizes the 1996 average rate and RevPAR of the subject property and its
competitors.
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================================================================================
Table 7-13 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
1996 1996
Average Rooms Revenue
Property Room Rate Per Available Room
--------------------------------------------------------
Grand Kempinski Dallas $104.61 $ 75.21
Dallas Marriott Quorum 102.00 85.68
Westin Galleria 144.00 119.52
Doubletree Lincoln Center 100.00 74.00
------ -----
Averages $111.74 $ 87.27
- --------------------------------------------------------------------------------
The subject property achieves an average rate that is higher than most of its
competitors, for the exception of the Westin Galleria, which benefits from a
privileged location. However, because of its lower occupancy, the subject
property only ranks third in RevPAR, compared to its competitors.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing faster than
supply are often characterized by rate growth that exceeds inflation.
Markets that are overbuilt or suffering from declining demand are unlikely
to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This temporary condition may
allow other competitors to achieve corresponding gains by effectively
raising the amount the market will bear. However, if the addition to
supply has a severe impact on the occupancy levels of other hotels, price
competition may ensue.
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o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Average Rates by Market Segment
The Grand Kempinski Dallas's historical average rates are set forth in the
following table. To project average rate, we have applied growth factors to the
hotel's 1996 rates in each market segment. The following table also outlines
these growth factors.
================================================================================
Table 7-14 1996 Average Rate by Market Segment and Assumed Growth Factors
- --------------------------------------------------------------------------------
Projected Growth Rates
-------------------------------------------
1996
Market Segment Average Rate 1997/98 1998/99 1999/00 2000/01 2001/02
- -----------------------------------------------------------------------------
Commercial $110.00 6.0 % 3.0 % 3.5 % 3.5 % 3.5 %
Meeting and Group 106.00 3.0 % 3.0 % 3.5 % 3.5 % 3.5 %
Leisure 116.00 3.5 % 2.0 % 3.0 % 3.5 % 3.5 %
Airline 51.00 14.0 % 8.0 % 5.0 % 3.5 % 3.5 %
- --------------------------------------------------------------------------------
To arrive at projections, the growth factors are applied to the subject
property's historical average rate in each market segment. These calculations
are summarized in the following table.
<PAGE>
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================================================================================
Table 7-15 Forecast of Average Rate by Market Segment
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Group/ Weighted Percent
Commercial Meeting Leisure Contract Total Average Rate Change
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical
Demand 55,426 63,740 9,700 9,700 138,566
Segment Rate $110.00 $106.00 $116.00 $51.00
Revenue $6,096,890 $6,756,463 $1,125,153 $494,679 $14,473,185 $104.45 ---
1997/98
Demand 55,862 64,778 9,412 9,700 139,752
Segment Rate $118.25 $109.97 $121.07 $59.92
Revenue $6,605,429 $7,123,819 $1,139,532 $581,225 $15,450,005 $110.55 5.8 %
1998/99
Demand 54,172 64,318 8,440 9,700 136,630
Segment Rate $121.79 $113.27 $123.49 $64.71
Revenue $6,597,762 $7,285,429 $1,042,287 $627,723 $15,553,200 $113.83 3.0 %
1999/00
Demand 53,923 64,217 8,276 9,700 136,116
Segment Rate $126.06 $117.24 $127.20 $67.95
Revenue $6,797,296 $7,528,578 $1,052,695 $659,109 $16,037,678 $117.82 3.5 %
</TABLE>
- --------------------------------------------------------------------------------
The following average rates will be used to project the subject property's rooms
revenue.
================================================================================
Table 7-16 Forecast of Average Rate
- --------------------------------------------------------------------------------
Year Average Rate
------------------------------
1997/98 $110.55
1998/99 113.83
Stabilized 117.82
- --------------------------------------------------------------------------------
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This differential may occur when a site has existing improvements and
the highest and best use of the land differs from the current use. Nonetheless,
the current property use will continue until the value of the land under its
highest and best use exceeds the value of the property in its current use, plus
the cost to remove the existing improvements.
(1) The Appraisal of Real Estate - Eleventh Edition, Appraisal Institute,
Chicago, IL, 1996, p. 50.
(2) Ibid., p. 44.
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HVS International, Mineola, New York Highest and Best Use 97
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be as a lodging facility. However, given the current market
trends and the value of land in the subject market area, we are of the opinion
that the highest and best use would be for a more moderately sized lodging
facility, with more compact parking areas, together with more limited meeting
space, food and beverage outlets and public areas than are present at the
subject property.
Based on the fact that the value of the land does not exceed the value of the
hotel plus the cost of demolition, it is our opinion that the subject property's
highest and best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 98
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income- producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
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these income-related considerations and requires a number of highly subjective
depreciation estimates, this approach is given minimal weight in the hotel
valuation process. As noted in Hotels and Motels: A Guide to Market Analysis,
Investment Analysis, and Valuations, "the cost approach is seldom used to value
existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, we consider
the applicability and supportability of each approach and examine the range of
value indications. The most significant weight is given to the approach that
produces the most reliable solution and most closely reflects the criteria used
by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 101
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================================================================================
10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any non-recurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled, Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(10) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 102
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(2) Ibid.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 103
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Grand Kempinski Dallas is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1983, and achieved
occupancy levels of 73.5% in 1995 and 71.9% in 1996. The following income and
expense statements were provided by Morgan Stanley Mortgage Capital, Inc., and
are unaudited. Where applicable, we have reorganized the statements in
accordance with the Uniform System of Accounts for Hotels.
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================================================================================
Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Year: 1996 1995
----------------------------------------- -------------------------------------------
No. of Rooms: 528 528
No. of Occupied Rooms: 138,915 141,743
Complimentary Rooms: 3,847 3,829
No. of Days Open: 366 365
Occupancy: 71.9% Amount per Amount per 73.5% Amount per Amount per
Average Rate: $104.61 Percent Available Occupied $97.41 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $14,533 46.2 % $27,524 $104.61 $13,807 48.2 % $26,150 $97.41
Food 10,600 33.7 20,075 76.30 9,561 33.4 18,108 67.45
Beverage 3,698 11.8 7,004 26.62 3,018 10.5 5,716 21.29
Telephone 894 2.8 1,694 6.44 841 2.9 1,594 5.94
Minor Operated Depts 724 2.3 1,372 5.21 669 2.3 1,267 4.72
Other Income 984 3.1 1,863 7.08 721 2.5 1,365 5.09
-------------------------------------------------------------------------------------
Total 31,433 99.9 59,531 226.27 28,618 99.8 54,201 201.90
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 3,068 21.1 5,810 22.08 2,920 21.2 5,531 20.60
Food & Beverage 7,941 55.5 15,040 57.16 7,469 59.4 14,147 52.70
Telephone 323 36.1 612 2.32 310 36.9 588 2.19
Minor Operated Depts 499 68.9 946 3.59 473 70.6 895 3.33
Total 11,831 37.6 22,407 85.17 11,173 39.0 21,161 78.82
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 19,602 62.3 37,125 141.11 17,445 60.8 33,040 123.08
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,892 6.0 3,582 13.62 1,913 6.7 3,624 13.50
Management Fee 300 1.0 568 2.16 300 1.0 3,795 14.13
Marketing 1,939 6.2 3,673 13.96 2,004 7.0 3,795 14.13
Property Oper. & Maint. 1,519 4.8 2,876 10.93 1,256 4.4 2,379 8.86
Energy 1,068 3.4 2,023 7.69 1,117 3.9 2,116 7.88
Total 6,717 21.4 12,722 48.36 6,590 23.0 15,708 58.51
- ----------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 12,884 40.9 24,403 92.75 10,855 37.8 17,332 64.57
- ----------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 1,158 3.7 2,194 8.34 985 3.4 1,865 6.95
Insurance 153 0.5 290 1.10 143 0.5 271 1.01
Reserve for Replacement 1,723 5.5 3,263 12.40 968 3.4 1,833 6.83
Total 3,034 9.7 5,747 21.84 2,096 7.3 3,969 14.78
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $9,850 31.2 % $18,656 $70.91 $8,759 30.5 % $13,363 $49.79
================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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================================================================================
Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Calendar Year: 1994 1993
----------------------------------------- -------------------------------------------
No. of Rooms: 528 528
No. of Occupied Rooms: 140,046 123,148
Complimentary Rooms: 4,250 0
No. of Days Open: 365 365
Occupancy: 72.7% Amount per Amount per 63.9% Amount per Amount per
Average Rate: $91.32 Percent Available Occupied $88.48 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $12,789 48.8 % $24,221 $91.32 $10,897 47.6 % $20,638 $88.48
Food 8,586 32.8 16,261 61.31 7,751 33.9 14,680 62.94
Beverage 2,725 10.4 5,161 19.46 2,649 11.6 5,018 21.51
Telephone 880 3.4 1,667 6.28 673 2.9 1,275 5.47
Minor Operated Depts 1,230 4.7 2,329 8.78 906 4.0 1,716 7.36
Other Income 0 0.0 0 0.00 0 0.0 0 0.00
--------------------------------------------------------------------------------------
Total 26,210 100.1 49,639 187.15 22,876 100.0 43,326 185.76
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 2,901 22.7 5,494 20.71 2,625 24.1 4,971 21.31
Food & Beverage 7,047 62.3 13,347 50.32 6,687 64.3 12,665 54.30
Telephone 323 36.7 612 2.31 356 52.8 674 2.89
Minor Operated Depts 434 35.3 823 3.10 220 24.3 418 1.79
Total 10,706 40.8 20,276 76.44 9,888 43.2 18,727 80.29
- ----------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 15,504 59.3 29,364 110.71 12,988 56.8 24,599 105.47
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,675 6.4 3,172 11.96 1,666 7.3 3,155 13.53
Management Fee 300 1.1 568 2.14 300 1.3 568 2.44
Marketing 1,765 6.7 3,343 12.60 1,763 7.7 3,339 14.32
Property Oper. & Maint. 1,396 5.3 2,644 9.97 1,173 5.1 2,221 9.52
Energy 1,099 4.2 2,082 7.85 1,077 4.7 2,040 8.75
Total 6,235 23.7 11,810 44.52 5,979 26.1 11,324 48.55
- ----------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 9,268 35.6 17,554 66.19 7,009 30.7 13,275 56.92
- ----------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 767 2.9 1,453 5.48 767 3.4 1,452 6.22
Insurance 158 0.6 299 1.13 135 0.6 256 1.10
Reserve for Replacement 1,013 3.9 1,918 7.23 1,322 5.8 2,504 10.74
Total 1,937 7.4 3,669 13.83 2,224 9.8 4,212 18.06
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $7,331 28.2 % $13,885 $52.36 $4,786 20.9 % $9,063 $38.86
================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
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Comparable Operating Statements
These historical income and expense statements show an efficient operation, that
has been able to increase revenues, while also increasing the net income, both
as a dollar amount and as a percentage of total revenue. Between 1995 and 1996
revenues increased by approximately $3 million from $28,618,000 to $31,433,000
as a result of increasing revenues in all departments.
The food and beverage expense declined from 59.4% of food and beverage revenue
in 1995 to 55.5% in 1996 - a level that is extremely efficient in a full-service
property which operates its own butcher shop and pastry shop. In our base year
estimates, we have increased the food and beverage expense to 60.0% of food and
beverage revenue to bring it more in line with industry standards, which more
commonly range from 68% to 80%. Total departmental expense as a percentage of
revenue decreased from 39.0% in 1995 to 37.6% in 1996.
Operating expenses also show a very efficient operation. In 1996, the management
fee expense was only 1.0% of gross revenues; we increased this expense to 3.0%
of gross revenues in our base year estimate to reflect industry standards.
The reserve for replacement included in the historical statements reflects the
actual capital expenditures during those years. This expense increased from 3.4%
of total revenue in 1995 to 5.5% in 1996, reflecting the expenses of the
guestroom and corridor renovation as well as some of the public areas
renovations undertaken at the subject property in 1996 and beginning of 1997. We
have utilized a reserve for replacement equal to 4.0% of gross revenues in our
base year estimate in accordance with industry standards. Net income increased
over $1 million between 1995 and 1996.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
future operating results. Depending on the dynamics of the local market, a
typical buyer's projection may be adjusted upward or downward. We have attempted
to consider these factors in formulating this forecast.
HVS International uses a fixed-and-variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed, and another that
varies directly with occupancy and facility usage. A
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projection can be made by taking a known level of revenue or expense and
calculating its fixed and variable components. The fixed component is then held
constant, while the variable component is adjusted for the percent change
between the projected occupancy and facility usage and that which produced the
known level of revenue or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1996 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
71.9%. The base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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================================================================================
Table 10-3 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
Calendar Year: 1996
No of Rooms: 528
Occupancy: 71.9% Amount per Amount per
Average Rate: $104.61 Percent Available Occupied
No of Occupied Rooms: 138,915 of Gross Room Room
- ---------------------------------------------------------------------
REVENUES
Rooms $14,533 46.4 % $27,524 $104.61
Food 10,600 33.9 $20,075 76.30
Beverage 3,698 11.8 7,004 26.62
Telephone 894 2.9 1,694 6.44
Minor Operated Depts 579 1.8 1,096 4.17
Other Income 1,008 3.2 1,909 7.25
Total 31,311 100.0 59,301 225.40
- ---------------------------------------------------------------------
EXPENSES
Rooms* 3,068 21.1 5,810 22.08
Food & Beverage* 8,579 60.0 16,248 61.75
Telephone* 323 36.1 612 2.32
Minor Operated Depts* 371 64.1 703 2.67
Administrative & General 1,892 6.0 3,582 13.62
Management Fee 939 3.0 1,779 6.76
Marketing 1,939 6.2 3,673 13.96
Property Oper. & Maint. 1,519 4.8 2,876 10.93
Energy 1,068 3.4 2,023 7.69
Property Taxes 1,158 3.7 2,194 8.34
Insurance 153 0.5 290 1.10
Reserve for Replacement 1,252 4.0 2,372 9.02
Total 22,261 71.1 42,161 160.25
- ---------------------------------------------------------------------
NET INCOME $ 9,050 28.9 % $17,141 $65.15
=====================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues.
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Line items can be affected by different factors.
We must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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================================================================================
Table 10-4 Inflation Estimates
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
--------------------------------------------
May November
Source of 1997 of 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Maureen Allyn, Scudder Stevens Clark 2.6 % 2.8 %
Wayne Angell, Bear Stearns 3.3 3.2
Richard Berner, Mellon Bank 2.7 3.0
David Berson, Fannie Mae 2.6 2.9
David Blitzer, S&P 3.1 2.8
Paul Boltz, T. Rowe Price 3.3 3.5
David Bostian, Herzog, Heine, Geduld 2.4 1.6
Philip Braverman, DKB Securities 3.0 3.0
William Brown, J.P. Morgan 2.8 2.9
Rosanne Cahn, CS First Boston 2.8 2.7
James Coons, Huntington National Bank 3.0 2.9
Michael Cosgrove, The Econoclast 3.3 3.0
Robert Crow, Bechtel Group 2.8 2.7
Dewey Daane, Vanderbilt University 3.1 3.3
WDudley, Goldman Sachs 3.0 3.4
Michael Englund, MMS Intl. 3.3 3.4
Gail Fosler, Conference Board 3.3 3.9
Maury Harris, Paine Webber, Inc. 2.9 2.9
Michael J. Held, Smith Barney 2.9 2.8
Tracy Herrick, Jefferies & Co. 3.4 3.9
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 3.1 3.0
Edward Hyman, ISI Group 2.5 2.5
Saul Hymans, University of Michigan 2.1 1.9
Mieczyslaw Karczmar, Deutsche Bank 3.3 3.5
Kurt Karl, WEFA Group 2.5 2.5
Irwin Kellner, Chase Regional Bank 2.2 2.1
D Laufenberg, American Express Financial Advisors 3.1 3.4
Carol Leisenring, CoreStates Financial 2.7 2.5
Mickey Levy, NationsBank Capital Markets 2.8 2.5
David Littmann, Comerica 3.0 3.0
John Lonski, Moody's Investors Service 3.5 3.2
Paul McCulley, UBS Securities 2.7 2.7
John McDevitt, 3M 2.7 2.8
Arnold Moskowitz, Moskowitz Capital 3.0 3.1
John Mueller, LBMC, Inc. 3.0 2.8
David Munro, High Frequency Econ. 2.8 2.6
Carl Palash, MCM MoneyWatch 3.5 3.5
Nicholas Perna, Fleet Financial Group 3.1 3.3
Elliott Platt, Donaldson Lufkin Jenrette 2.8 2.3
Maria F. Ramirez, MF Ramirez 2.9 2.5
Donald Ratajczak, Georgia State University 3.2 3.3
David Resler, Nomura Securities International 2.7 2.7
Allan Reynolds, Hudson Institute 3.1 3.6
Richard Rippe, Prudential Securities 3.0 3.2
A Gary Schilling, Schilling & Co. 2.5 2.5
Allen Sinai, Lehman Brothers 3.3 3.1
James Smith, University of North Carolina 2.4 2.2
Susan Sterne, Economic Analysis 2.8 3.0
Donald Straszheim, Merrill Lynch 2.7 2.9
Thomas Synott III, U.S. Trust Company 3.3 3.0
John Walter, Dow Corning 2.8 2.4
John Williams, Bankers Trust 3.2 3.3
Raymond Worseck, A.G. Edwards 3.3 3.5
David Wyss, DRI/McGraw-Hill 2.8 2.9
Edward Yardeni, Deutsche Morgan Grenfell 3.0 2.2
Mark Zandi, Regional Financial Associates 3.0 3.2
------- -------
Averages 2.9 % 2.9 %
</TABLE>
Source: Wall Street Journal, Jan 2, 1997
- --------------------------------------------------------------------------------
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The preceding table shows inflation forecasts averaging 2.9% for both the first
and second half of 1997. Most of the economists in the sample estimate inflation
rates ranging from 2.5% to 3.3% for the 12-month period, although several
anticipate levels of slightly greater than 3.4% during the second half of the
year. As a further check on these inflation projections, we have reviewed
historical increases in the Consumer Price Index.
Because the value of real estate is predicated on cash flows over a relatively
long period, inflation should be considered from a long-term perspective.
Between 1986 and 1995, the national CPI increased at an average annual
compounded rate of 3.7%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-5 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
----------------------------------------
1997/98 5.7 %
1998/99 3.0
1999/00 3.5
2000/01 3.5
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1996 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed-and-variable component relationships.
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Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-6 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ---------------------------------------------------------------------------
Projected Occupancy Percentage 73.0 % 71.0 % 71.0 %
Projected Average Rate $110.55 $113.83 $117.82
- --------------------------------------------------------------------------------
Rooms revenue is calculated as follows.
================================================================================
Table 10-7 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
Rooms
No. of Days Revenue
Year Occupancy Average Rate Units in Year (+000)
- ---------------------------------------------------------------------------
1997/98 73 % x $110.55 x 528 x 365 = $15,553
1998/99 71 x 113.83 x 528 x 365 = 15,576
Stabilized 71 x 117.82 x 528 x 365 = 16,122
- --------------------------------------------------------------------------------
Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as, "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue.
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Although food revenue varies directly with changes in occupancy, the small
portion generated by banquet sales and outside capture is relatively fixed.
Food revenue was projected based on this relationship between the fixed and
variable components. The following table shows the projected food revenue and
several units of comparison that can be used to check the reasonableness of the
forecast.
================================================================================
Table 10-8 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -----------------------------------------------------------------------------
Projected Food Revenue (+000) $11,142 $11,389 $11,788
Percent of Total Revenue 33.6 % 33.9 % 33.9 %
Amount per Available Room $21,103 $21,570 $22,325
Amount per Occupied Room $79.20 $83.23 $86.15
- --------------------------------------------------------------------------------
Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and non-alcoholic
beverages in the bars and lounges. The following table illustrates the forecast
of beverage revenue.
================================================================================
Table 10-9 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ------------------------------------------------------------------------
Projected Beverage Revenue (+000) $3,887 $3,974 $4,113
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the deregulation of the telephone industry in the
early 1980s, hotels were limited to a 15% commission on long-distance calls, a
mark-up that allowed few profits. Deregulation and the development of
sophisticated call-accounting equipment have resulted in profitable telephone
departments. State-of-the-art equipment is capable of least-cost
<PAGE>
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routing, automatic price billing, and posting telephone charges to guest folios.
Hotels can select among various long-distance services, and can also work with
any one of a number of Alternative Operator Services (AOS). These systems route
and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food, beverage, and meeting
facilities. Using this fixed-and-variable relationship, the subject property's
telephone revenue is projected as follows.
================================================================================
Table 10-10 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- --------------------------------------------------------------------------
Projected Telephone Revenue (+000) $947 $956 $989
Percent of Total Revenue 2.9 % 2.8 % 2.8 %
Amount per Available Room $1,793 $1,810 $1,873
Amount per Occupied Room $6.73 $6.99 $7.23
- --------------------------------------------------------------------------------
Minor Operated Departments
This line item refers to all revenue generated by the hotel's gift shop and
flower shop before the latter was leased to a third party in March 15, 1997.
Additional revenues are generated by the valet parking and parking garage, the
guest valet service, and the health club.
Minor operated department income is highly sensitive to changes in occupancy and
slightly correlated to food and beverage volume. Using this fixed-and-variable
relationship, the subject property's minor operated departments revenue is
projected as follows.
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================================================================================
Table 10-11 Forecast of Minor Operated Departments
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997/98 1998/99 Stabilized
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Projected Minor Operated Department Income (+000) $607 $623 $645
Percent of Total Revenue 1.8 % 1.9 % 1.9
Amount Per Available Room $1,150 $1,180 $1,221
Amount Per Occupied Room $4.31 $4.55 $4.71
</TABLE>
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. The subject property's other income refers principally
to rent income generated from the lease of its retail space. Depending on the
type of hotel and the facilities and amenities offered, other income may include
the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed-and-variable relationship, the
subject property's other income is projected as follows. The items are net of
any related expenses.
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================================================================================
Table 10-12 Forecast of Other Income
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ---------------------------------------------------------------------------
Projected Other Income (+000) $1,057 $1,085 $1,123
Percent of Total Revenue 3.2 % 3.2 % 3.2 %
Amount per Available Room $2,002 $2,054 $2,126
Amount per Occupied Room $7.51 $7.93 $8.21
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-13 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -----------------------------------------------------------------------
Projected Rooms Expense (+000) $3,222 $3,298 $3,413
Percent of Rooms Revenue 20.7 % 21.2 % 21.2 %
Amount per Available Room $6,102 $6,246 $6,465
Amount per Occupied Room $22.88 $24.07 $24.92
- --------------------------------------------------------------------------------
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Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a hotel's
income and expense statement, the corresponding expenses are combined into a
single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. After considering the fixed and variable components, we
forecast the subject property's food and beverage expense as follows.
================================================================================
Table 10-14 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ----------------------------------------------------------------------------
Projected Food & Beverage Expense (+000) $8,983 $9,246 $9,570
Percent of Food and Beverage Revenue 59.8 % 60.2 % 60.2 %
Amount per Available Room $17,014 $17,511 $18,124
Amount per Occupied Room $63.85 $67.57 $69.94
- --------------------------------------------------------------------------------
Telephone Expense Telephone expense consists of all costs associated with this
department. In the case of small hotels with automated systems, the operation of
telephones may be an additional responsibility of front desk personnel; however,
most large properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and other
expenses, are moderately fixed. The following table illustrates our forecast of
telephone expense.
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================================================================================
Table 10-15 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ----------------------------------------------------------------------------
Projected Telephone Expense (+000) $339 $347 $360
Percent of Telephone Revenue 35.8 % 36.3 % 36.4 %
Amount per Available Room $642 $658 $681
Amount per Occupied Room $2.41 $2.54 $2.63
- --------------------------------------------------------------------------------
Minor Operated Departments Expense
Minor operated departments expense consists of costs associated with minor
operated departments, and is dependent on the nature of the revenue. For
example, if the property operates its own gift shop, both revenues and expenses
will be higher, and the hotel is responsible for the cost of goods sold,
payroll, and so forth. Using a fixed-and-variable forecasting model, we project
the subject property's minor operated expense as follows.
================================================================================
Table 10-16 Forecast of Other Income Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -----------------------------------------------------------------------------
Projected Minor Operated Depts Expense (+000) $388 $400 $414
Percent of Minor Operated Depts Revenue 63.9 % 64.2 % 64.2 %
Amount per Available Room $735 $758 $784
Amount per Occupied Room $2.76 $2.92 $3.03
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume.
In recent years, several new items have been added to the administrative and
general expense category. Human resources includes the cost of
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recruiting, relocating, and training personnel. Security consists of the cost of
contract security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The following table illustrates our forecast of
administrative and general expense.
================================================================================
Table 10-17 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- --------------------------------------------------------------------------------
Projected Admin. & General Expense (+000) $1,984 $2,040 $2,111
Percentage of Total Revenue 6.0 % 6.1 % 6.1 %
Amount per Available Room $3,758 $3,864 $3,998
Amount per Occupied Room $14.10 $14.91 $15.43
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
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Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is currently operated by Kempinski International, Inc.. The
terms of this agreement provide for an annual management fee of $300,000. This
equates to roundly 1% of gross revenues in each of the projection years. For the
purposes of this appraisal, we have assumed that the cost of management will be
in line with prevailing market terms for management contracts, in recognition of
the fact that a typical investor would anticipate incurring such costs. As a
result, we have forecast the base management fee to be 3% of gross revenues
throughout the projection period. Applying this management fee structure to the
projection of total revenue yields the following forecast of the subject
property's management fee.
================================================================================
Table 10-18 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -------------------------------------------------------------------
Projected Management Fee (+000) $996 $1,008 $1,043
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long
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period. Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed, with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a
fixed-and-variable component model.
================================================================================
Table 10-19 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -----------------------------------------------------------------------
Projected Marketing Expense (+000) $2,034 $2,091 $2,164
Percentage of Total Revenue 6.1 % 6.2 % 6.2 %
Amount per Available Room $3,852 $3,960 $4,099
Amount per Occupied Room $14.46 $15.28 $15.82
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
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The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-quality building
materials and construction methods generally reduces the need for maintenance
expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-20 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- --------------------------------------------------------------------------------
Projected Prop. Oper. & Maint. Expense (+000) $1,593 $1,637 $1,695
Percentage of Total Revenue 4.8 % 4.9 % 4.9 %
Amount per Available Room $3,016 $3,101 $3,210
Amount per Occupied Room $11.32 $11.97 $12.39
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although
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all hotels consume a sizable amount of electricity, many properties supplement
their energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-21 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- -------------------------------------------------------------------------
Projected Energy Expense (+000) $1,117 $1,153 $1,194
Percentage of Total Revenue 3.4 % 3.4 % 3.4 %
Amount per Available Room $2,115 $2,185 $2,261
Amount per Occupied Room $7.94 $8.43 $8.73
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-22 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ----------------------------------------------------------------------
Projected Property Taxes (+000) $1,173 $1,185 $1,197
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
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distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
at approximately $160,000 in 1997/98 (the first projection period). In
subsequent years, this amount is assumed to increase in tandem with inflation.
The following table outlines our projection of insurance expense.
================================================================================
Table 10-23 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ------------------------------------------------------------------------
Projected Insurance Expense (+000) $160 $165 $171
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4.0% of total revenue is sufficient to provide for the
periodic replacement of the subject property's furniture, fixtures, and
equipment. The following table summarizes the projected reserve for replacement.
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================================================================================
Table 10-24 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997/98 1998/99 Stabilized
- ---------------------------------------------------------------------------
Projected Replacement Reserves (+000) $1,328 $1,344 $1,391
- --------------------------------------------------------------------------------
Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to fiscal operating years beginning in 1997/98, and are
expressed in inflated dollars for each year.
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================================================================================
Table 10-25 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History: Grand Kempinski Dallas,
Addison, Texas
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical Operating Results
-------------------------------------
Fiscal Year: 1966 1997/98 1998/99
No. of Rooms: 528 528 528
Occupancy: 71.9% 73.0% 71.0%
Average Rate: $104.61 $110.55 $113.83
No. of Days Open: 366 Percent 365 Percent 365 Percent
No.of 0ccupied Rooms: 138,915 of 140,686 of 136,831 of
(+000) Gross PAR POR (+000) Gross PAR POR (+000) Gross PAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $14,533 46.2 % $27,524 $104.61 $15,553 46.8 % $29,456 $110.55 $15,576 46.4 % $29,500
Food 10,600 33.7 20,075 76.30 11,142 33.6 21,102 79.20 11,389 33.9 21,570
Beverage 3,698 11.8 7,004 26.62 3,887 11.7 7,362 27.63 3,974 11.8 7,527
Telephone 894 2.8 1,694 6.44 947 2.9 1,794 6.73 956 2.8 1,811
Minor Operated Depts 724 2.3 1,372 5.21 607 1.8 1,150 4.31 623 1.9 1,180
Other Income 984 3.1 1,863 7.08 1,057 3.2 2,002 7.51 1,085 3.2 2,055
Total 31,433 99.9 59,531 226.27 33,193 100.0 62,866 235.94 33,603 100.0 63,642
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 3,068 21.1 5,810 22.08 3,219 20.7 6,097 22.88 3,294 21.1 6,239
Food & Beverage 7,941 55.5 15,040 57.16 8,983 59.8 17,013 63.85 9,246 60.2 17,511
Telephone 323 36.1 612 2.32 339 35.8 642 2.41 347 36.3 657
Minor Operated Depts 499 68.9 946 3.59 388 63.9 735 2.76 400 64.2 758
Total 11,831 37.6 22,407 85.17 12,929 39.0 24,487 91.90 13,287 39.5 25,165
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 19,602 62.3 37,125 141.11 20,264 61.0 38,379 144.04 20,316 60.5 38,477
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,892 6.0 3,582 13.62 1,984 6.0 3,758 14.10 2,040 6.1 3,864
Management Fee 300 1.0 568 2.16 996 3.0 1,886 7.08 1,008 3.0 1,909
Marketing 1,939 6.2 3,673 13.96 2,034 6.1 3,852 14.46 2,091 6.2 3,960
Property Oper. & Maint. 1,519 4.8 2,876 10.93 1,593 4.8 3,017 11.32 1,637 4.9 3,100
Energy 1,068 3.4 2,023 7.69 1,117 3.4 2,116 7.94 1,153 3.4 2,184
Total 6,717 21.4 12,722 48.36 7,724 23.3 14,629 54.90 7,929 23.6 15,017
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 12,884 40.9 24,402 92.75 12,540 37.7 23,750 89.13 12,387 36.9 23,460
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 1,158 3.7 2,194 8.34 1,173 3.5 2,222 8.34 1,185 3.5 2,244
Insurance 153 0.5 290 1.10 160 0.5 303 1.14 165 0.5 313
Reserve for Replacement 1,723 5.5 3,263 12.40 1,328 4.0 2,515 9.44 1,344 4.0 2,545
Total 3,034 9.7 5,747 21.84 2,661 8.0 5,040 18.91 2,694 8.0 5,102
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $9,850 31.2 % $18,655 $70.91 $9,879 29.8 % $18,710 $70.22 $9,693 28.8 % $18,358
====================================================================================================================================
Food/Rooms 72.9% 71.6% 73.1%
Beverage/Food 34.9% 34.9% 34.9%
Telephone/Rooms 6.2% 6.1% 6.1%
Other Income/Rooms 6.8% 6.8% 7.0%
<CAPTION>
Fiscal Year: Stabilized 2000/01 2001/02
No. of Rooms: 528 528 528
Occupancy: 71.0% 71.0% 71.0%
Average Rate: $117.82 $121.90 $126.17
No. of Days Open: 365 Percent 365 Percent 365 Percent
No.of 0ccupied Rooms: 136,831 of 136,831 of 136,831 of
POR (+000) Gross PAR POR (+000) Gross PAR POR (+000) Gross
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $113.83 $16,122 46.4 % $30,534 $117.82 $16,680 46.4 % $31,591 $121.90 17,264 46.4 %
Food 83.23 11,788 33.9 22,326 86.15 12,200 33.9 23,106 89.16 12,627 33.9
Beverage 29.04 4,113 11.8 7,790 30.06 4,257 11.8 8,063 31.11 4,406 11.8
Telephone 6.99 989 2.8 1,873 7.23 1,024 2.8 1,939 7.48 1,059 2.8
Minor Operated Depts 4.55 645 1.9 1,222 4.71 667 1.9 1,263 4.87 691 1.9
Other Income 7.93 1,123 3.2 2,127 8.21 1,162 3.2 2,201 8.49 1,203 3.2
Total 245.58 34,780 100.0 65,871 254.18 35,990 100.0 68,163 263.02 37,250 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 24.07 3,410 21.2 6,458 24.92 3,529 21.2 6,684 25.79 3,653 21.2
Food & Beverage 67.57 9,570 60.2 18,125 69.94 9,904 60.2 18,758 72.38 10,251 60.2
Telephone 2.54 360 36.4 682 2.63 372 36.3 705 2.72 385 36.4
Minor Operated Depts 2.92 414 64.2 784 3.03 428 64.2 811 3.13 444 64.3
Total 97.11 13,754 39.5 26,049 100.52 14,233 39.5 26,956 104.02 14,733 39.6
- ------------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 148.47 21,026 60.5 39,822 153.66 21,757 60.5 41,206 159.01 22,517 60.4
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 14.91 2,111 6.1 3,998 15.43 2,185 6.1 4,138 15.97 2,261 6.1
Management Fee 7.37 1,043 3.0 1,975 7.62 1,080 3.0 2,045 7.89 1,118 3.0
Marketing 15.28 2,164 6.2 4,098 15.82 2,240 6.2 4,242 16.37 2,318 6.2
Property Oper. & Maint. 11.96 1,695 4.9 3,210 12.39 1,754 4.9 3,322 12.82 1,815 4.9
Energy 8.43 1,194 3.4 2,261 8.73 1,236 3.4 2,341 9.03 1,279 3.4
Total 57.95 8,207 23.6 15,544 59.98 8,495 23.6 16,089 62.08 8,791 23.6
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 90.53 12,819 36.9 24,278 93.68 13,262 36.9 25,117 96.92 13,726 36.8
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 8.66 1,197 3.4 2,267 8.75 1,238 3.4 2,345 9.05 1,282 3.4
Insurance 1.21 171 0.5 324 1.25 177 0.5 335 1.29 183 0.5
Reserve for Replacement 9.82 1,391 4.0 2,634 10.17 1,440 4.0 2,727 10.52 1,490 4.0
Total 19.69 2,759 7.9 5,225 20.16 2,855 7.9 5,407 20.87 2,955 7.9
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $70.84 $10,060 28.9 % $19,053 $73.52 $10,407 28.9 % $19,710 $76.06 $10,771 28.9 %
====================================================================================================================================
Food/Rooms 73.1% 73.1% 73.1%
Beverage/Food 34.9% 34.9% 34.9%
Telephone/Rooms 6.1% 6.1% 6.1%
Other Income/Rooms 7.0% 7.0% 7.0%
</TABLE>
Fiscal Year:
No. of Rooms:
Occupancy:
Average Rate:
No. of Days Open:
No.of 0ccupied Rooms:
PAR POR
- ----------------------------------------------
REVENUE
Rooms $32,697 $126.17
Food 23,915 92.28
Beverage 8,345 32.20
Telephone 2,006 7.74
Minor Operated Depts 1,309 5.05
Other Income 2,278 8.79
Total 70,549 272.23
- ----------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 6,919 26.70
Food & Beverage 19,415 74.92
Telephone 729 2.81
Minor Operated Depts 841 3.24
Total 27,903 107.67
- ----------------------------------------------
DEPARTMENTAL INCOME 42,646 164.56
- ----------------------------------------------
OPERATING EXPENSES
Administrative & General 4,282 16.52
Management Fee 2,117 8.17
Marketing 4,390 16.94
Property Oper. & Maint. 3,438 13.26
Energy 2,422 9.35
Total 16,650 64.25
- ----------------------------------------------
HOUSE PROFIT 25,996 100.31
- ----------------------------------------------
FIXED EXPENSES
Property Taxes 2,428 9.37
Insurance 347 1.34
Reserve for Replacement 2,822 10.89
Total 5,597 21.60
- ----------------------------------------------
NET INCOME $20,400 $78.72
==============================================
Food/Rooms
Beverage/Food
Telephone/Rooms
Other Income/Rooms
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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================================================================================
Table 10-26 Ten-Year Forecast of Income and Expense, Grand Kempinski Dallas,
Addison, Texas ($+,000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fiscal Year: 1997/98 1998/99 1999/00 2000/01 2001/02
---------------- ---------------- ---------------- ---------------- ----------------
No. of Rooms: 528 528 528 528 528
No. of Occupied Rooms: 140,686 136,831 136,831 136,831 136,831
Occupancy: 73.0% % of 71.0% % of 71.0% % of 71.0% % of 71.0% % of
Average Rate: $110.55 Gross $113.83 Gross $117.82 Gross $121.90 Gross $126.17 Gross
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $15,553 46.8 % $15,576 46.4 % $16,122 46.4 % $16,680 46.4 % $17,264 46.4 %
Food 11,142 33.6 11,389 33.9 11,788 33.9 12,200 33.9 12,627 33.9
Beverage 3,887 11.7 3,974 11.8 4,113 11.8 4,257 11.8 4,406 11.8
Telephone 947 2.9 956 2.8 989 2.8 1,024 2.8 1,059 2.8
Minor Operated Depts 607 1.8 623 1.9 645 1.9 667 1.9 691 1.9
Other Income 1,057 3.2 1,085 3.2 1,123 3.2 1,162 3.2 1,203 3.2
Total 33,193 100.0 33,603 100.0 34,780 100.0 35,990 100.0 37,250 100.0
- ---------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 3,219 20.7 3,294 21.1 3,410 21.2 3,529 21.2 3,653 21.2
Food & Beverage 8,983 59.8 9,246 60.2 9,570 60.2 9,904 60.2 10,251 60.2
Telephone 339 35.8 347 36.3 360 36.4 372 36.3 385 36.4
Minor Operated Depts 388 63.9 400 64.2 414 64.2 428 64.2 444 64.3
Total 12,929 39.0 13,287 39.5 13,754 39.5 14,233 39.5 14,733 39.6
- ---------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 20,264 61.0 20,316 60.5 21,026 60.5 21,757 60.5 22,517 60.4
- ---------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 1,984 6.0 2,040 6.1 2,111 6.1 2,185 6.1 2,261 6.1
Management Fee 996 3.0 1,008 3.0 1,043 3.0 1,080 3.0 1,118 3.0
Marketing 2,034 6.1 2,091 6.2 2,164 6.2 2,240 6.2 2,318 6.2
Property Oper. & Maint. 1,593 4.8 1,637 4.9 1,695 4.9 1,754 4.9 1,815 4.9
Energy 1,117 3.4 1,153 3.4 1,194 3.4 1,236 3.4 1,279 3.4
Total 7,724 23.3 7,929 23.6 8,207 23.6 8,495 23.6 8,791 23.6
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 12,540 37.7 12,387 36.9 12,819 36.9 13,262 36.9 13,726 36.8
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 1,173 3.5 1,185 3.5 1,197 3.4 1,238 3.4 1,282 3.4
Insurance 160 0.5 165 0.5 171 0.5 177 0.5 183 0.5
Reserve for Replacement 1,328 4.0 1,344 4.0 1,391 4.0 1,440 4.0 1,490 4.0
Total 2,661 8.0 2,694 8.0 2,759 7.9 2,855 7.9 2,955 7.9
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME $9,879 29.8 % $9,693 28.8 % $10,060 28.9 % $10,407 28.9 % $10,771 28.9 %
=================================================================================================================================
<CAPTION>
Fiscal Year: 2002/03 2003/04 2004/05 2005/06 2006/07
---------------- ---------------- ---------------- ---------------- ----------------
No. of Rooms: 528 528 528 528 528
No. of Occupied Rooms: 136,831 136,831 136,831 136,831 136,831
Occupancy: 71.0% % of 71.0% % of 71.0% % of 71.0% % of 71.0% % of
Average Rate: $130.58 Gross $135.15 Gross $139.88 Gross $144.78 Gross $149.85 Gross
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $17,868 46.4 % $18,493 46.4 % $19,140 46.4 % $19,810 46.4 % $20,504 46.4 %
Food 13,069 33.9 13,526 33.9 14,000 33.9 14,490 33.9 14,997 33.9
Beverage 4,560 11.8 4,719 11.8 4,885 11.8 5,056 11.8 5,232 11.8
Telephone 1,097 2.8 1,135 2.8 1,175 2.8 1,216 2.8 1,258 2.8
Minor Operated Depts 715 1.9 740 1.9 766 1.9 793 1.9 820 1.9
Other Income 1,245 3.2 1,288 3.2 1,333 3.2 1,380 3.2 1,428 3.2
Total 38,554 100.0 39,901 100.0 41,299 100.0 42,745 100.0 44,239 100.0
- ---------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 3,780 21.2 3,913 21.2 4,050 21.2 4,191 21.2 4,338 21.2
Food & Beverage 10,610 60.2 10,981 60.2 11,366 60.2 11,763 60.2 12,175 60.2
Telephone 399 36.4 413 36.4 427 36.3 442 36.3 457 36.3
Minor Operated Depts 459 64.2 475 64.2 492 64.2 509 64.2 527 64.3
Total 15,248 39.5 15,782 39.6 16,335 39.6 16,905 39.5 17,497 39.6
- ---------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 23,306 60.5 24,119 60.4 24,964 60.4 25,840 60.5 26,742 60.4
- ---------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 2,340 6.1 2,422 6.1 2,507 6.1 2,595 6.1 2,686 6.1
Management Fee 1,157 3.0 1,197 3.0 1,239 3.0 1,282 3.0 1,327 3.0
Marketing 2,399 6.2 2,483 6.2 2,570 6.2 2,660 6.2 2,753 6.2
Property Oper. & Maint. 1,879 4.9 1,945 4.9 2,013 4.9 2,083 4.9 2,156 4.9
Energy 1,324 3.4 1,370 3.4 1,418 3.4 1,468 3.4 1,519 3.4
Total 9,099 23.6 9,417 23.6 9,747 23.6 10,088 23.6 10,441 23.6
- ---------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 14,207 36.9 14,702 36.8 15,217 36.8 15,752 36.9 16,301 36.8
- ---------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 1,327 3.4 1,373 3.4 1,421 3.4 1,471 3.4 1,522 3.4
Insurance 190 0.5 196 0.5 203 0.5 210 0.5 218 0.5
Reserve for Replacement 1,542 4.0 1,596 4.0 1,652 4.0 1,710 4.0 1,770 4.0
Total 3,059 7.9 3,165 7.9 3,276 7.9 3,391 7.9 3,510 7.9
- ---------------------------------------------------------------------------------------------------------------------
NET INCOME $11,148 28.9 % $11,537 28.9 % $11,941 28.9 % $12,361 28.9 % $12,791 28.9 %
=====================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the average A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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================================================================================
Table 10-27 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
-------------------------------------------------------------------------
4th Quarter 1996 9.49 % 7.54 %
3rd Quarter 1996 8.96 7.90
2nd Quarter 1996 8.82 7.93
1st Quarter 1996 7.79 7.37
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Sources: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 130
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Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a hotel
mortgage and the concurrent yield on an average A corporate bond. Through a
regression analysis, this relationship is expressed as follows.
Y = 2.811891 + 0.778037
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.0%)
The yield on Average A corporate bonds, as reported by Moody's Bond Record, was
7.97% for the month of March, 1997. Using a factor of 7.97% in the equation
presented above produces an estimated hotel/motel interest rate of 9.01%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find
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HVS International, Mineola, New York Income Capitalization Approach 131
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that lenders who are active in the market are using loan-to-value ratios of 65%
to 75%, and amortization periods of 25 to 30 years. The exact terms offered
depend on specific factors such as the property's location, the age and quality
of the physical facility, local hostelry market conditions, and (perhaps more
significantly) the profile of the borrower. The strongest projects typically
command the highest loan-to-value ratios.
Information pertaining to transactions that involved the Hotel & Motel Brokers
of America, an association of active hotel sales agents, is summarized in a
publication entitled, TransActions. The following table presents HMBA data
regarding first-mortgage hotel financing.
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
Average First-Year Interest 9.8% 9.1% 8.4% 9.0% 9.7%
Loan-to-Value Ratio 74 73 76 73 73
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 9.5% interest,
25-year amortization mortgage with a 0.104844 constant is appropriate for the
subject property. We believe that a mortgage lender will lend up to 70.0% of the
hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual inflation-
adjusted cash flows, property appreciation, mortgage amortization, and proceeds
from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
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HVS International, Mineola, New York Income Capitalization Approach 132
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Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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================================================================================
Table 10-28 Sample of Hotels Sold
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total
No. of Date Property Equity
Hotel City and State Rooms of Sale Sales Price Yield Yield
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Residence Inn Lincoln, NE 120 6/95 $ 7,100,000 13.7 % 18.5 %
DFW Marriott Irving, TX 491 7/95 44,000,000 15.3 24.6
High Mesa Inn Sante Fe, NM 211 9/95 11,200,000 17.7 30.4
Radisson Hotel Agoura Hills Agoura Hills, CA 281 9/95 12,100,000 8.1 6.2
Residence Inn - Perimeter West Atlanta, GA 120 10/95 11,650,000 10.0 10.2
Terrace Garden Inn Atlanta, GA 368 10/95 27,900,000 16.0 26.1
Doubletree, Marina del Ray Marina del Ray, CA 368 11/95 16,500,000 21.3 33.6
Hyatt Regency Beaver Creek Avon, CO 295 5/95 40,000,000 --- ---
Embassy Suites Schaumburg, IL 209 12/95 17,800,000 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 15.5 10.7
Marriott Hotel Tysons Comer, VA 390 12/95 41,100,000 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 17.0
Ft. Lauderdale Airport Hilton Dania, FL 388 12/95 14,792,000 22.2 36.8
DeSoto Hilton Savannah, GA 250 6/96 6,500,000 --- ---
The Copley Plaza Boston, MA 373 6/96 65,000,000 9.9 11.7
Arlington Park Hilton Arlington Heights, I 421 8/96 13,000,000 15.2 28.9
Radisson Marque Winston-Salem, N 293 8/96 7,500,000 13.5 20.4
Ritz Carlton Kansas City, MO 373 8/96 42,500,000 10.9 14.9
Ritz-Carlton Philadelphia, PA 290 8/96 34,000,000 13.8 22.8
Hotel Park Tucson Tucson, AZ 216 8/96 11,000,000 12.3 18.3
Embassy Suites Hotel Palm Desert, CA 198 8/96 14,000,000 13.8 22.8
Sheraton Ft Lauderdale Airport Dania, FL 250 8/96 22,000,000 9.0 9.1
Doubletree Hotel Atlanta, GA 370 8/96 52,000,000 10.6 14.2
The Marque of Atlanta Atlanta, GA 274 8/96 23,000,000 14.8 25.7
Doubletree Grand Hotel Bloomington, MN 321 8/96 37,000,000 13.3 22.0
Sheraton Minneapolis Metrodome Minneapolis, MN 252 8/96 18,000,000 13.1 21.5
Sheraton Needham Needham, MA 247 8/96 20,000,000 15.0 26.8
Westin Hotel Waltham, MA 346 8/96 41,000,000 13.5 20.8
Embassy Suites St. Louis, MO 297 8/96 20,000,000 14.7 25.3
Allentown Hilton Allentown, PA 224 10/96 7,500,000 12.2 18.9
Marriott's Casa Marina Resort Key West, FL 311 1/97 62,800,000 12.6 18.3
Hotel Nikko Atlanta, GA 439 2/97 89,000,000 13.6 20.1
</TABLE>
Overall Rate Based on
Net Operating Income
---------------------------------
Stabilized Historical Projected
Hotel Year Year Year One
- ------------------------------ ---------------------------------
Residence Inn 10.0 % --- ---
DFW Marriott 11.3 12.1 % 12.6 %
High Mesa Inn 13.1 --- 13.6
Radisson Hotel Agoura Hills 8.0 4.0 9.6
Residence Inn - Perimeter West 8.6 --- 9.6
Terrace Garden Inn 12.2 8.5 11.2
Doubletree, Marina del Ray 17.0 --- 15.0
Hyatt Regency Beaver Creek --- --- ---
Embassy Suites 10.0 --- ---
Marriott Hotel 9.7 7.4 10.2
Doubletree Suites 14.2 7.7 10.4
Marriott Hotel 10.7 8.2 8.9
Marriott Hotel 6.2 --- ---
Hilton at the Club 10.5 --- ---
Ft. Lauderdale Airport Hilton 16.7 --- 14.5
DeSoto Hilton --- --- ---
The Copley Plaza 8.5 6.6 8.3
Arlington Park Hilton 10.8 0.0 15.0
Radisson Marque 11.9 5.3 5.5
Ritz Carlton 8.7 7.1 8.2
Ritz-Carlton 10.0 5.1 9.7
Hotel Park Tucson 10.2 5.4 7.0
Embassy Suites Hotel 10.7 7.2 10.1
Sheraton Ft Lauderdale Airport 7.8 4.7 7.3
Doubletree Hotel 9.1 7.0 8.8
The Marque of Atlanta 11.5 9.6 10.9
Doubletree Grand Hotel 10.3 9.9 11.3
Sheraton Minneapolis Metrodome 10.2 8.9 11.2
Sheraton Needham 11.4 8.4 12.5
Westin Hotel 10.2 6.4 10.8
Embassy Suites 11.4 7.7 10.2
Allentown Hilton 9.7 8.5 10.0
Marriott's Casa Marina Resort 9.7 9.8 9.2
Hotel Nikko 13.6 8.1 10.4
Source: HVS International
- --------------------------------------------------------------------------------
Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. This source of equity funds has
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-29 Equity Yield Requirements
- --------------------------------------------------------------------------------
Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
- --------------------------------------------------------------------------------
Based on the assumed 70.0% loan-to-value ratio, the risk inherent in achieving
the projected income stream, and the age, condition, and anticipated market
position of the subject property, it is our opinion that an equity investor is
likely to require an equity yield rate of 20.0% before payment of incentive
management fees. This estimate is well supported by the equity yield
requirements presented previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus, it inherently incorporates the cost of debt and
equity capital. The terminal capitalization rate can be derived through a
mortgage and equity band of investment technique which calculates the weighted
average cost of the capital used in a hotel investment. Combining the mortgage
financing terms derived previously (namely, a 70.0% loan-to-value ratio and a
0.104844 debt service constant) with a cash-on-cash equity dividend rate of
20.0% produces the following overall capitalization rate.
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Percent Rate of Weighted
of Value Return Average
Mortgage 70% x 0.104844 = 0.073391
Equity 30% x 0.120000 = 0.036000
--------
Overall Capitalization Rate 0.109391
Because this overall rate will be used to capitalize net income ten years from
the date of value, an upward adjustment is appropriate to reflect the
uncertainty inherent in this extended period. For the purpose of this valuation,
we will use a terminal capitalization rate of 11.0%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-30 Summary of Valuation Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 20.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
- --------------------------------------------------------------------------------
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow
(derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $89,963,000.
Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 20.0%, then $89,963,000 is the correct value by the
income capitalization approach. Using the assumed financial structure set forth
in the previous calculations, market value can be allocated between the debt and
equity as follows.
Mortgage Component (70%) $62,974,000
Equity Component (30%) 26,989,000
-----------
Total $89,963,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $62,974,000
Mortgage Constant 0.104844
-----------
Annual Debt Service $ 6,602,421
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-31 Forecast of Net Income to Equity
- --------------------------------------------------------------------------------
Net Income
Available for Net Income
Year Debt Service Debt Service to Equity
--------------------------------------------------------------
1997/98 $ 9,879,000 - $6,602,000 = $3,277,000
1998/99 9,693,000 - 6,602,000 = 3,091,000
1999/00 10,060,000 - 6,602,000 = 3,458,000
2000/01 10,407,000 - 6,602,000 = 3,805,000
2001/02 10,771,000 - 6,602,000 = 4,169,000
2002/03 11,148,000 - 6,602,000 = 4,546,000
2003/04 11,537,000 - 6,602,000 = 4,935,000
2004/05 11,941,000 - 6,602,000 = 5,339,000
2005/06 12,361,000 - 6,602,000 = 5,759,000
2006/07 12,791,000 - 6,602,000 = 6,189,000
- --------------------------------------------------------------------------------
The equity residual at the end of the tenth year is calculated as follows.
Reversionary Value ($13,239,000 / 0.110 ) $ 120,355,000
Less: Brokerage and Legal Fees 3,611,000
Less: Mortgage Balance 52,690,000
-------------
Net Sale Proceeds to Equity $ 64,054,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-32 Overall Property Yields
- --------------------------------------------------------------------------------
Projected Yield
(Internal Rate of Return)
Position Value Over Ten-Year Holding Period
- --------------------------------------------------------------------------------
Total Property $89,963,000 13.5 %
Mortgage 62,974,000 9.5
Equity 26,989,000 20.0
Note: Whereas the mortgage constant and value are calculated on the basis of
monthly mortgage payments, the mortgage yield in this proof assumes single
annual payments. As a result, the proof's derived yield may be slightly
less than that actually input.
- --------------------------------------------------------------------------------
The following tables demonstrate that the property receives its anticipated
yields, proving that the $89,963,000 value is correct, based on the assumptions
used in this approach.
================================================================================
Table 10-33 Total Property Yield
- --------------------------------------------------------------------------------
Net Income Before Present Worth of $1
Year Debt Service Factor at 13.5% Cash Flow
---------------------------------------------------------------------
1997/98 $ 9,879,000 x 0.881196 = $ 8,705,000
1998/99 9,693,000 x 0.776507 = 7,527,000
1999/00 10,060,000 x 0.684255 = 6,884,000
2000/01 10,407,000 x 0.602963 = 6,275,000
2001/02 10,771,000 x 0.531328 = 5,723,000
2002/03 11,148,000 x 0.468205 = 5,220,000
2003/04 11,537,000 x 0.412580 = 4,760,000
2004/05 11,941,000 x 0.363564 = 4,341,000
2005/06 12,361,000 x 0.320371 = 3,960,000
2006/07 129,535,000 * x 0.282310 = 36,569,000
------------
Total Property Value $ 89,964,000
* 10th year net income of $12,791,000 plus sales proceeds of $116,744,000
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Table 10-34 Mortgage Component Yield
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<TABLE>
<CAPTION>
Present Worth of $1 Discounted
Year Debt Service Factor at 9.4% Cash Flow
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<S> <C> <C> <C> <C> <C>
1997/98 $ 6,602,000 x 0.913820 = $ 6,033,000
1998/99 6,602,000 x 0.835068 = 5,513,000
1999/00 6,602,000 x 0.763102 = 5,038,000
2000/01 6,602,000 x 0.697338 = 4,604,000
2001/02 6,602,000 x 0.637242 = 4,207,000
2002/03 6,602,000 x 0.582325 = 3,845,000
2003/04 6,602,000 x 0.532140 = 3,513,000
2004/05 6,602,000 x 0.486280 = 3,210,000
2005/06 6,602,000 x 0.444373 = 2,934,000
2006/07 59,293,000 * x 0.406077 = 24,078,000
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Value of the Mortgage Component $62,975,000
*10th year debt service of $6,602,000 plus outstanding mortgage balance of $52,690,000
</TABLE>
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Table 10-35 Equity Component Yield
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<TABLE>
<CAPTION>
Net Income Present Worth of $1 Discounted
Year to Equity Factor at 20.0% Cash Flow
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<S> <C> <C> <C> <C> <C>
1997/98 $ 3,277,000 x 0.833325 = $ 2,731,000
1998/99 3,091,000 x 0.694430 = 2,146,000
1999/00 3,458,000 x 0.578686 = 2,001,000
2000/01 3,805,000 x 0.482233 = 1,835,000
2001/02 4,169,000 x 0.401857 = 1,675,000
2002/03 4,546,000 x 0.334877 = 1,522,000
2003/04 4,935,000 x 0.279062 = 1,377,000
2004/05 5,339,000 x 0.232549 = 1,242,000
2005/06 5,759,000 x 0.193789 = 1,116,000
2006/07 70,243,000 * x 0.161489 = 11,343,000
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Value of the Equity Component $26,988,000
*10th year net income to equity of $6,189,000 plus sales proceeds of $64,054,000
</TABLE>
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 13.48%.
After reviewing the total property yields indicated by recent hotel sales, which
ranged from 7.2% to 36.0%, it is our opinion that a 13.5% discount factor would
be appropriate for the Grand Kempinski Dallas. The following table illustrates
the discounted cash flow analysis using a 13.5% discount factor.
================================================================================
Table 10-36 Discounted Cash Flow Analysis
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Discount Factor Discounted
Year Net Income at 13.5% Cash Flow
- -------------------------------------------------------------------------
1997/98 $ 9,879,000 0.88106 $ 8,703,965
1998/99 9,693,000 0.77626 7,524,307
1999/00 10,060,000 0.68393 6,880,348
2000/01 10,407,000 0.60258 6,271,077
2001/02 10,771,000 0.53091 5,718,429
2002/03 11,148,000 0.46776 5,214,609
2003/04 11,537,000 0.41213 4,754,686
2004/05 11,941,000 0.36311 4,335,846
2005/06 12,361,000 0.31992 3,954,493
2006/07 129,534,909 * 0.28187 36,511,377
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Estimated Market Value $ 89,869,136
(Say) $ 89,900,000
Reversion Analysis
11th-Year Net Income $ 13,239,000
Capitalization Rate 11.0%
------------
Total Sales Proceeds $120,354,545
Less: Brokerage & Legal Fees at 3.0% 3,610,636
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Net Sales Proceeds $116,743,909
* Tenth-year net income of $12,791,000 plus sales proceeds of $116,743,909
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled, Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors. . . . This technique is simple but less reliable
because the derivation of the discount rate has little support." In light of
this consideration, we have relied on the $89,950,000 value conclusion indicated
by Method One.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Market Overview
Throughout the past decade, hotel values in the U. S. have fluctuated fairly
dramatically. During the late 1980s and early 1990s, values declined in most
parts of the country. The downturn, which began in most markets in 1988, was
largely attributable to lower operating incomes caused by an oversupply of new
hotel rooms that were constructed during the mid-1980s. Overbuilding resulted in
flat or declining average rates and occupancies, which caused revenues to fall.
A number of other factors exacerbated the situation. The national recession
caused a drop in demand in many markets during the early 1990s, and the Persian
Gulf War created a virtual freeze on travel in the beginning of 1991, further
limiting hotel demand. Operating costs continued to rise despite poor market
conditions, resulting in a decline in the net operating income of many hotels
throughout the nation. Because operating costs have a large fixed component,
some lodging facilities experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. A
majority of the hotel transactions that occurred during the early 1990s were
financed by the property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around underperforming properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
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As a result of these market forces, there was very little sales activity
involving large, high-quality hotels in the early 1990s. The primary difficulty
was the lack of properties available for sale; owners who were not forced to
sell opted to wait for prices to recover. The few hotels that did enter the
market during this period generally attracted 15 to 20 interested bidders,
mostly consisting of owner-operators. As a result of the competition for these
few assets, the prices of better-quality hotels began to escalate rapidly. In
response, more sellers were encouraged to place their products on the market,
and the number of hotels available for sale (and the number actually sold) began
to rise in 1994. This trend has continued to accelerate.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly - to 92 in 1994 and to 134 in 1995. In 1996,
the total number of major transactions soared to an estimated 207.
The wider availability of mortgage capital has been a material factor
influencing the increase in both market activity and prices. With the
industry-wide slump in the early 1990s, traditional financing sources virtually
abandoned the hospitality industry. Initially, the number of lenders returning
to the market was extremely limited, and the underwriting criteria was fairly
stringent: loan-to-value ratios were in the 60% to 70% range, and amortization
periods were shortened to 20 or 25 years. The qualification of the borrower was
also a crucial consideration for most lenders.
Since 1995, an increasing number of lenders have entered the hotel mortgage
market. Although these institutions continue to adopt a cautious posture, the
greater availability of funds has fostered competition, particularly for
high-quality assets and well-qualified buyers. As a result, loan-to-value ratios
are returning to historical levels of 70% to 75%, and interest rates remain in
the 8.5% to 10.0% range for most deals. Amortization periods remain in the 20-
to 25-year range. The lingering influence of the recent downturn is evident in
the widespread practice of underwriting based on net income after the deduction
of management fees and a reserve for replacement; these line items typically
total 7% to 8% of gross revenues.
The current strength of the hotel industry is also supporting the increase in
prices and the availability of mortgage capital. Moderate supply growth in the
economy and mid-priced segments, limited development of new first
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class and luxury hotels, and the favorable national economy have yielded healthy
occupancy levels and average rate increases that are well above inflation. This
resulted in high revenue levels which, paired with modest expense increases and
improved operating efficiency, led to record net income levels in 1996. Still
greater gains are anticipated in 1997.
Real Estate Investment Trusts (REITs) are also influencing pricing trends and
sales volume. Given their structure, organizational purpose, and low cost of
capital, REITs are driven by the need to acquire assets. With several large
REITs actively pursuing high-quality hotels, the competition for these
properties is accelerating; this trend is exemplified by the rise in sales
prices.
In the short term, as long as REITs continue to make purchases and maintain a
strong position and reputation in the capital markets, sales prices are likely
to increase. The continued availability of mortgage financing is also expected
to support this trend. However, sales activity is expected to slow as the number
of high-quality, available assets diminishes.
Given the dramatic changes in investor activity and attitudes that have occurred
recently, if is our opinion that hotel sales that took place prior to 1995
cannot be relied on in preparing a sales comparison approach. Even sales data
from 1995 may be subject to significant upward adjustments, depending on the
location and condition of the property at the date of sale. These circumstances
will be considered in our selection of comparable sales for the subject
property.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
- --------
Property: Occidental Grand Hotel
Location: Atlanta, Georgia
Date of Sale: March, 1997
Sales Price: $49,000,000
Grantor: N/A
Grantee: Blackstone Partnership
Year Opened: 1993
Number of Rooms: 245
Price per Room: $200,000
1996 Operating Data:
Occupancy: 69%
Average Rate: $150.00
RevPAR: $103.50
Food & Beverage Revenue: N/A
Food & Beverage Profit: N/A
Overall Capitalization Rate:
1996 NOI: N/A
1997 Projected NOI: N/A
Confirmed By: Jon Gray, Blackstone
This sale represents the transfer of a mixed-use complex that includes the
Occidental Grand Hotel and adjacent office space. The indicated sale price
reflects an allocation made by the purchaser.
The facility is constructed of superior-quality materials and features
high-grade finishes. In addition to guestrooms, the hotel features meeting space
accommodating up to 600 people, business services, two restaurants, one lounge,
and two bars, an indoor swimming pool, a health club, saunas, steam rooms, a
whirlpool, and a sun terrace. The buyer plans to renovate the guestrooms (soft
goods and some case pieces), and to reconfigure and renovate some of the food
and beverage facilities and meeting space.
Subsequent to the transaction, the hotel was converted to a Four Seasons. The
buyer indicated that the hotel has suffered from a lack of market identity and
direction, as it was previously operated by Doubletree on the Intercontinental
reservation system. The buyer believes that significant increases in revenues
and net income can be readily attained with the new management and affiliation.
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Sale #2:
- --------
Property: Hotel Nikko
Location: Atlanta, Georgia
Date of Sale: February 1997
Sales Price: $89,000,000
Grantor: JDC Group - Prudential Joint Venture
Grantee: Blackstone Group & Hyatt Hotels
Year Opened: 1990
Number of Rooms: 439
Price per Room: $202,733
1996 Operating Data:
Occupancy: 79%
Average Rate: $148.00
RevPAR: $116.92
Food & Beverage Revenue: $11,478,000
Food & Beverage Profit: $3,115,000 (27.1%)
Overall Capitalization Rate:
1996 NOI: 7.8%
1997 Projected NOI: 10.4%
Confirmed By: Jon Gray, Blackstone
The Hotel Nikko is a superior facility, featuring high-grade finishes, which was
in very good condition at the time of sale. No significant renovations were
planned by the buyer. In addition to guestrooms, the subject property contains
two restaurants, a lobby bar, approximately 20,000 square feet of indoor meeting
space, an additional +/-6,300 square feet of outdoor meeting space, a business
center, a health club, a gift shop, an outdoor swimming pool, and a Japanese
Garden. The hotel is situated in Buckhead, the premiere office and retail market
in Atlanta.
Subsequent to the transaction, the hotel was converted to a Hyatt, and managed
by Hyatt Hotels. Hyatt believed some increase in revenues to be attainable with
the conversion to a more widely known brand name. However, the real upside was
perceived to be the opportunity to initiate more effective cost controls and
improve overall profitability and net income levels.
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Sale #3:
- --------
Property: Hyatt Regency Reston Town Center
Location: Reston, Virginia
Date of Sale: November, 1996
Sales Price: $66,400,000
Grantor: Property Investors, Inc., a subsidiary of
Mobil
Grantee: BRE/Reston, L.L.C., a Blackstone affiliate
Year Opened: 1990
Number of Rooms: 625
Price per Room: $136,187
1996 Operating Data:
Occupancy: 77%
Average Rate: $106.00
RevPAR: $81.62
Food & Beverage Revenue: $11,134,000
Food & Beverage Profit: $2,685,000 (24.1%)
Overall Capitalization Rate:
1996 NOI: 9.9%
1997 Projected NOI: 10.6%
Confirmed By: Jon Gray, Blackstone
The Hyatt is a full-service, first-class hotel which is situated within a
larger, upscale office and retail complex known as Reston Town Center. In
addition to guestrooms, the subject property contains four food and beverage
facilities, approximately 24,000 square feet of meeting and banquet space, a
health club, a gift shop, a parking garage, and appropriate back-of-the-house
facilities. The hotel was reportedly in very good condition at the time of sale,
with minimum renovations planned by the buyer.
The above-indicated price includes the acquisition amount of $66,400,000, plus
related transaction costs, including financing and closing fees. One of the
seller's primary motivations was reported to be certainty of execution rather
than price maximization; a previous sale had reportedly fallen through, and the
seller was anxious to complete the disposition of the property. Consequently,
the contracted price may be slightly below market value.
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Sale #4
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Property: Hyatt Regency Westshore
Location: Tampa, Florida
Date of Sale: July, 1996
Sales Price: $73,000,000
Grantor: N/A
Grantee: Hyatt Hotels Corporation
Year Opened: 1986
Number of Rooms: 445
Price per Room: $164,045
1995 Operating Data:
Occupancy: 67%
Average Rate: $124.00
RevPAR: $83.08
Food & Beverage Revenue: $13,892,000
Food & Beverage Profit: $3,921,000 (28.2%)
Overall Capitalization Rate:
1995 NOI: 7.7%
1996 Projected NOI: 9.2%
The Hyatt is a full-service, first-class hotel which is situated in the
Westshore area of Tampa, the region's premiere office market. In addition to
guestrooms, the hotel features meeting space accommodating up to 1,000 people, a
business center, three restaurants, a lobby bar, two swimming pools, two lighted
tennis courts, one racquetball court, a health club with exercise equipment, a
whirlpool, and sauna, a private beach, and shops. The property was in excellent
condition at the time of the sale.
The existing Hyatt management contract could be terminated only if Hyatt had the
right of first refusal. Hyatt reportedly opted to purchase the property when it
was placed on the market, and paid the seller's asking price.
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Adjustment Grid
In order to compare these sales to the subject property, several adjustments -
such as property rights conveyed, conditions of sale, market conditions (time),
location, and physical condition of the facilities - are necessary.
All of the comparable sales reflect transactions which have occurred within the
past 12 months; therefore, we have made no specific adjustment for market
conditions (time). Additionally, each transaction involved the transfer of the
fee simple interest, as is the case of the subject property. Consequently, no
adjustments are required for interest sold.
With respect to the conditions of sale, our review of each transaction indicates
that each occurred in "market" conditions - that is, between willing buyers and
sellers acting knowledgeably and in their own best interest.
The influence of management and brand affiliation on all of the transactions is
notable. In the case of Sales #2, #3 and #4, the purchaser was a direct
affiliate of the management company which was either currently managing the
hotel (#3 and #4) or who assumed management of the hotel (#2). In the case of
both Sales #1 and #2, the existing management and chain affiliation of the hotel
were terminated in conjunction with the purchase, and a new management and chain
affiliation were put in place. Reportedly, no significant cost was associated
with the termination of the existing contract in either of these sales.
These circumstances suggest that the most likely purchaser of the Grand
Kempinski hotel would be an investment group in conjunction with a management
company. This opinion is particularly valid, given the fact that the Kempinski
name is not well recognized in North America, and some upside in revenues could
reasonably be anticipated to result from a change in chain affiliation. A review
of the terms of the current management contract indicates that the contract
provides for the termination of Kempinski International, Inc. with 12 months'
notice, which equates to a termination "fee" of $300,000, the contractual
management fee. Such an amount is relatively insignificant, given the hotel's
total value, and thus, would not lessen the hotel's marketability. As a result,
no adjustment is necessary for these conditions of sale.
Some adjustments must be made to reflect location, facilities, and the specific
market in which each property operates. The subject property has its own
individual characteristics in terms of these items. The sales prices of the
comparable hotels that do not fit this profile need to be adjusted. It is
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our experience that each of the factors listed above will influence a hotel's
ability to attract and serve potential lodging guests. The success of a property
in so doing is measured by the occupancy and average rate that the hotel
achieves. Multiplying the occupancy by the average rate yields the revenue per
available room, or RevPAR, which is a measure of the revenue-generating ability
of the hotel at the time of sale. Thus, a comparison of the RevPAR of each
comparable property, as of the date of sale, with the RevPAR of the subject
property, as of the date of value, will result in an adjustment factor that
recognizes these differences.
In the case of the subject property, a further adjustment must be made in
recognition of the excellent performance of the food and beverage operations at
the Kempinski. In terms of revenues, the extensive meeting and banquet space
available at the Kempinski, together with the several retail food and beverage
outlets, enables the hotel to generate a relatively high level of food and
beverage revenue. Further, the extraordinarily efficient operations of the
department enable the hotel to achieve dramatically higher levels of food and
beverage profit. These profits directly influence the net income of the hotel,
and thus, also enhance the value of the property. Of the comparables, only the
Hyatt Regency Westshore generates a comparable volume of food and beverage
revenues. The profit ratios achieved by each of the comparables range from
roundly 24% to 28%. By contrast, the Kempinski's profit ratio is roundly 45%.
In recognition of the impact of these revenue and profit differentials, we have
applied a further adjustment to the indicated sales prices of each of the
comparables. The differential in the volume of food and beverage revenue is
reflected in a 10% upward adjustment to all sales except the Hyatt Regency
Westshore (#4). The difference in profitability is reflected in an additional
upward adjustment of 10% in all instances except the Hyatt Regency Reston, where
a 15% upward adjustment has been utilized in recognition of this hotel's
historically low level of profitability.
The following table summarizes the adjustments that have been applied to the
comparable sales.
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Table 11-1 Comparable Sales Adjustment Grid
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<TABLE>
<CAPTION>
Sale #1 Sale #2 Sale #3 Sale #4
Hyatt Regency
Subject Occidental Grand Hotel Nikko Hyatt Regency Westshore
Elements of Comparison Property Atlanta, GA Atlanta, GA Reston, VA Tampa, FL
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sale Price $49,000,000 $89,000,000 $70,000,000 $73,000,000
Number of Rooms 528 245 439 514 445
Price per Room $200,000 $202,733 $136,187 $164,045
Date of Sale April, 1997 March, 1997 Feb., 1997 Dec., 1996 July, 1996
- ---------------------------------------------------------------------------------------------------------------------
Adjustments for Transaction Characteristics
- ---------------------------------------------------------------------------------------------------------------------
Property Rights Conveyed
Adjustment 0.0% 0.0% 0.0% 0.0%
Adjusted Unit Price $200,000 $202,733 $136,187 $164,045
------------------------------------------------------------------------
Financing Terms
Adjustment 0.0% 0.0% 0.0% 0.0%
Adjusted Unit Price $200,000 $202,733 $136,187 $164,045
----------------------------------------------------------
Conditions of Sale
Adjustment 0.0% 0.0% 0.0% 0.0%
Adjusted Unit Price $200,000 $202,733 $136,187 $164,045
------------------------------------------------------------------------
Market Conditions (Time & Market Area)
HVI 1.0000 1.0000 1.0000 1.0000 1.0000
Adjusted Unit Price $200,000 $202,733 $136,187 $164,045
- ---------------------------------------------------------------------------------------------------------------------
Adjustments for Property Characteristics
- ---------------------------------------------------------------------------------------------------------------------
Location/Market
Adjustment 0.0% 0.0% 0.0% 0.0%
Physical Condition/Facilities
Adjustment 20.0% 20.0% 25.0% 10.0%
Market Orientation (RevPAR) $75.82 $103.50 $116.92 $81.62 $83.08
Adjustment -26.7% -35.1% -7.1% -8.7%
Net Percentage Adjustment -6.7% -15.1% 17.9% 1.3%
- ---------------------------------------------------------------------------------------------------------------------
Final Adjusted Unit Price $186,518 $172,020 $160,561 $166,121
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</TABLE>
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Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific, detailed
information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. The sales prices range from approximately $161,000 to
$187,000 per room, or $85,000,000 to $99,000,000 for the 528-unit subject
property. The income capitalization approach indicates a value of $89,950,000,
which is above this range.
The comparable sales data can also be utilized as a test of the reasonableness
of the capitalization rates indicated by the income capitalization approach. For
the purposes of this comparison, we will consider the overall capitalization
rates based on the historical net income and the net income projected for the
first year. The capitalization rate for the historical year is calculated by
dividing the net income for the 12 months preceding the sale
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by the indicated sales price. The first-year capitalization rate is calculated
by dividing the net income for the first projection year following the sale by
the sales price. The comparable sales data reflected historical cap rates
ranging from 7.7% to 9.9%, and projected cap rates ranging from 9.2% to 10.6%.
The differential between the two ranges is reflective of each purchaser's belief
that, through renovations and changes in management and/or brand affiliation,
these hotels will be able to generate an increased level of net income.
The capitalization rate indicated by dividing the subject property's 1996 net
income by the estimated value of $90,000,000 is 10.75%; the projected
capitalization rate is 11.0%. These rates are well above the range of historical
rates indicated by the comparable sales, and slightly higher than the projected
capitalization rate.
The capitalization rate is a measure of the return requirement of a typical
investor, and as such must reflect market perceptions as to the desirability of
a particular asset. However, it is also a reflection of the perceived risk in
attaining the level of cash flows upon which the capitalization rate is based.
As previously discussed, the Kempinski's current management team has achieved
extraordinarily strong level of operating efficiency and expense control.
Although there is probably some upside to be achieved by changing the property's
affiliation to a more widely recognized brand, we are of the opinion that the
probable decline in efficiency - and particularly, in food and beverage
profitability - will more than offset the upside gained by a new affiliation.
Thus, the risks associated with achieving net income levels commensurate with
the hotel's historical performance are substantial. These circumstances clearly
warrant a higher than average capitalization rate. As a result, we are of the
opinion that the capitalization rates indicated by the income capitalization
approach are reasonable.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount to acquire a
site and construct a building of equal desirability and utility without undue
delay. This approach estimates market value by first calculating the current
cost of replacing the improvements. Appropriate deductions are made for
depreciation resulting from physical deterioration, functional obsolescence, and
external (economic) obsolescence, and the land value is added to the depreciated
replacement cost to provide an estimate of market value. The cost approach
employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as the depressed
market for real estate (and hotels in particular), can cause a property to be
worth less than its replacement cost as new. The task of estimating the loss in
value resulting from incurable functional and external obsolescence is highly
subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence
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becomes increasingly difficult to quantify accurately. Loss in value
attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1983, and will be approximately 14 years
old as of the date of this appraisal. The depressed hotel market conditions that
prevailed in the late 1980s and the early 1990s have also led to a degree of
external obsolescence. In our opinion, it is impossible to identify and quantify
the impact of these factors on the property's value with any accuracy, so we
will estimate only the replacement cost of the subject property.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled, The Hotel Valuation Journal, and appeared in the May, 1995,
issue of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- - ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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HVS International, Mineola, New York Cost Approach 158
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
================================================================================
Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
------------------------------------------------
Building $132,000 528 $69,696,000
FF&E 35,000 528 18,480,000
Pre-Opening 6,800 528 3,590,400
Operating Capital 4,300 528 2,270,400
------------------------------------------------
Totals $178,100 $94,036,800
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the
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HVS International, Mineola, New York Cost Approach 159
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hotel's economic rent, or what is also known as the income attributable to the
land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Grand Kempinski Dallas appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 2.5% and 5.0% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.0% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $15,256,361
Rental Percentage 0.04
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Economic Ground Rent $ 610,254
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 9.0%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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HVS International, Mineola, New York Cost Approach 160
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Economic Ground Rent $610,254 $6,780,605
----------------------- = -------- =
Capitalization Rate 0.09
Estimated Land Value (Say) $6,800,000
The above value equates to $14.12 per square foot for the 480,000-square- foot
subject site.
Sales Comparison Approach to Land Value
The sales comparison approach to estimate land value involves analyzing the
amounts paid for comparable sites. The following is a summary of vacant land
sales that have taken place in the subject property's neighborhood during recent
years and one current listing.
================================================================================
Table 12-3 Comparable Land Sales
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<TABLE>
<CAPTION>
Price per
Sale Location Date of Sale Size (sq. ft.) Consideration Square Foot Land Use
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Spring Valley Rd. & Noel Rd. 11/96 118,779 $1,873,219 $15.77 Hotel (Embassy Suites)
2 Tollway & Spring Valley Rd. 07/95 304,920 4,878,720 16.00 Retail (Home Depot)
3 Tollway & Alpha Rd. 02/96 175,000 4,200,000 24.00 Retail
4 Southern Rd. & Montfort Rd. 12/96 500,940 6,100,000 12.18 Residential
5 Spring Valley Rd. & Noel Rd. 01/96 87,120 1,045,440 12.00 Hotel (Sumner Suites)
6 Noel Rd. & Alpha Rd. Current 283,140 8,494,200 30.00 Commercial/Retail
</TABLE>
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Sale #1, shown in the above table, details the sale of the Embassy Suites' site
in November, 1996. Shown at $15.77 per square foot, the sale price for this site
after being adjusted for easements approximates $16.00 per square foot. Sale #2
details the sale of land for the recently-constructed Home Depot Expo Design
Center, located immediately southwest of the subject site. Sale #3 represents a
vacant parcel sold for the development of a small retail center, which is
currently under construction immediately south of the Home Depot. Sale #4,
represents land being used for the development of residential units and,
therefore, has limited comparability to the subject site. Sale #5 represents the
acquirement of land for the development of the Sumner Suites, located directly
across Spring Valley Road from the Embassy Suites. While the land use is
comparable, this transaction was not a fee simple sale; instead, it reflects an
estimation of sale price based on a 90-year ground lease which was negotiated
for the parcel. Finally, Sale #6 is actually a
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HVS International, Mineola, New York Cost Approach 161
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current listing for land available for commercial development in the immediate
vicinity of the Galleria Mall; its future sales price is likely to be lower than
that which is currently listed. Overall, we believe that Land Sales #1, #2 and
#3 are most comparable to the subject property. Each is a fee simple sales of
parcels located in the area of the subject property, and has been developed for
commercial purposes.
Based on the comparable sales and the ground lease approach set forth, we
believe that the value of the subject property's land, as determined by the
ground lease approach, is well supported by recent sales in the area. This
value, determined to be roundly $6,800,000, yields a value of approximately
$14.19 per square foot, which is at the lower end of the indicated range of
value. Given the large size of the subject property, the lower per square foot
value is considered to be appropriate particularly, given the current use of the
property, which is less dense than is ideal.
A hotel's land value typically ranges from 10% to 20% of the overall value. The
estimate of land value presented above is roughly 7.5% of the total property
value indicated by the income capitalization approach. Again, the size of the
site together with the low density of the current development, is affecting the
value of the land.
Replacement Cost
Combining the replacement cost of the property with the land value yields the
subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $ 94,036,800
Land Value 6,800,000
------------
Total Replacement Cost $100,836,800
Total Replacement Cost (Say) $100,800,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate, which would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This condition creates an effective barrier to
entry for new competition, thereby reducing the risk
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HVS International, Mineola, New York Cost Approach 162
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associated with the subject property's income-generating potential. An upward
adjustment of the value indicated by the income capitalization approach is also
justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that the cost approach is inapplicable in estimating the market value of
the Grand Kempinski Dallas. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 163
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
Income Capitalization $89,950,000
Sales Comparison $85,000,000 - $99,000,000
Cost (Replacement Cost) $100,800,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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HVS International, Mineola, New York Reconciliation of Value Indications 164
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $161,000 to $187,000 per available room. The income capitalization approach
indicates a per-room value of approximately $170,385. This information suggests
that a minimal adjustment of the value indicated by the income capitalization
approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary.
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HVS International, Mineola, New York Reconciliation of Value Indications 165
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Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the
replacement cost estimate, the sales comparison approach, and our extensive
experience in the hospitality industry. It is our opinion that the market value
of the fee simple interest in the Grand Kempinski Dallas - Addison, as of April
1, 1997, is:
$90,000,000
NINETY MILLION DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $170,455 per room, which is well
supported by market sales, and approximately 0.1% higher than the value
indicated by the income capitalization approach. The estimate of value assumes
either the availability of third-party financing or the willingness and
capability of the seller to take back purchase-money financing so that a buyer
can obtain the level of debt set forth in the Income Capitalization Approach
section of this appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to twelve months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen
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equipment, front office and accounting computers, exterior signs, and similar
items. Our inspection of the Grand Kempinski Dallas indicates that the personal
property and fixtures are in relatively good condition, and have been well
maintained.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $35,000 per available room. Assuming an average
useful life of ten years and an effective age of five years, the value of the
furniture, fixtures, and equipment currently in place is approximately $17,500
per room, or a total of $9,240,000.
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
stipulates that ". . . any business interest or other intangible item should be
valued separately within the appraisal."(1) Hotels have both business and real
estate components; without the business expertise necessary to operate the
facility, a hostelry would have little real estate value.
Because furniture, fixtures, and equipment are essential to a hotel's
income-generating ability and are seldom removed from the property or sold
separately, the separation of the personal property component from the real
property is not particularly meaningful.
(1) Federal Register, Vol. 55, No. 143, July 25, 1990, p. 30205.
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HVS International, Mineola, New York Statement of Assumptions and 167
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear, unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 168
Limiting Conditions
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HVS
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International
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6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is within the
boundaries of the property described, and that there is no encroachment or
trespass, unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded, unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 169
Limiting Conditions
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HVS
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15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor make
provision for the effect of any sharp rise or decline in local or national
economic conditions. To the extent that wages and other operating expenses
may advance during the economic life of the property, we expect that the
prices of rooms, food, beverages, and services will be adjusted to at
least offset those advances. We do not warrant that the estimates will be
attained, but they have been prepared on the basis of information obtained
during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
<PAGE>
HVS International, Mineola, New York Statement of Assumptions and 170
Limiting Conditions
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21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
<PAGE>
HVS International, Mineola, New York Certification 171
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Samantha A. Sudre and Anne R. Lloyd-Jones personally inspected the
property described in this report; Stephen Rushmore participated in the
analysis and reviewed the findings, but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
<PAGE>
HVS International, Mineola, New York Certification 172
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10. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
11. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Samantha A. Sudre
Samantha A. Sudre
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
<PAGE>
HVS International, Mineola, New York Addenda: Quality Assurance 1
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Quality Assurance
The Hospitality Valuation Services division of Hotel Consulting Services, Inc.
strives to achieve the highest quality standards of quality during all phases of
the assignment. It is our goal to provide clients with the finest product
available. The following staff members acknowledge their contribution to this
report.
/s/ Marissa D. Cannuscio
Marissa D. Cannuscio
Office Manager (Extension 201)
Report Production and Graphics
/s/ Anne Millward
Anne Millward
Editor (Extension 215)
Editing
<PAGE>
HVS International, Mineola, New York Addenda: Quality Assurance 2
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HVS
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/s/ Samantha A. Sudre
Samantha A. Sudre
Consulting and Valuation Analyst
(Extension 222)
Analysis, Write-up and Review
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President (Extension 208)
Analysis, Write-up and Review
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President (Extension 204)
Analysis, Write-up and Review
We are available to answer any questions, and are pleased to have provided you
with the finest quality product available. Wendy Millward (extension 233) is
available to answer any billing questions. We look forward to serving you again
in the future.
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Northeast view of Subject Property
[GRAPHIC OMITTED]
Southwest view of Subject Property
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Monte Carlo entrance and Main entrance to Subject Property
[GRAPHIC OMITTED]
Oriental guestroom
<PAGE>
HVS International, Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
Standard bathroom
[GRAPHIC OMITTED]
Outside swimming pool and whirlpool
<PAGE>
HVS International, Mineola, New York Photographs of the Competitors
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[GRAPHIC OMITTED]
Mariott Quorum
[GRAPHIC OMITTED]
Westin Galleria
<PAGE>
[GRAPHIC OMITTED]
Doubletree Lincoln Center
<PAGE>
ORDINANCE NO. 601
AN ORDINANCE OF THE CITY OF ADDISON, TEXAS, AMENDING THE COMPREHENSIVE
ZONING ORDINANCE NO. 66 OF THE CITY OF ADDISON, TEXAS AS HERETOFORE
AMENDED, SO AS TO CHANGE THE HEREINAFTER DESCRIBED PROPERTY LOCATED NORTH
OF BELT LINE AND WEST OF DALLAS PARKWAY AND CONTAINING 11.020 ACRES OF
LAND PRESENTLY ZONED "C" COMMERCIAL TO "PD" PLANNED DEVELOPMENT NO.13
SHALL BE GRANTED WITH REFERENCE TO THE HEREIN DESCRIBED PROPERTY SUBJECT,
HOWEVER, TO THE SPECIAL CONDITIONS HEREINAFTER MORE FULLY EXPRESSED;
PROVIDING FOR A PENALTY NOT TO EXCEED THE SUM OF TWO HUNDRED DOLLARS
($200.00) FOR EACH OFFENSE; PROVIDING FOR A SEVERABILITY CLAUSE; AND
DECLARING AN EMERGENCY.
WHEREAS, the City Zoning Commission of the City of Addison, Texas, and the
City Council of the City of Addison, Texas, in compliance with the laws of the
State of Texas with reference to the granting of zoning changes under the zoning
ordinance and zoning map, have given requisite notices by publication and
otherwise, and after holding due hearings and affording a full and fair hearing
to all property owners generally and to all persons interested and situated in
the area, the City of Addison, Texas, is of the opinion that said change of
zoning on application of Registry Hotel, Case #511, should be granted and the
Comprehensive Zoning Ordinance should be amended in the exercise of its
legislative direction:
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ADDISON, TEXAS:
SECTION 1. That the Comprehensive Zoning Ordinance No.66
<PAGE>
of the City of Addison, Texas, be, and the same is hereby amended, so as to give
the hereinafter described property the following zoning district classification,
to-wit: Planned Development District No. l3. Said property being in the City of
Addison, Dallas County, Texas, and being described as follows:
A 11.020 acre tract of land out of the G. W. Fisher Survey, Abstract No.
482 and being part of a 104.05 acre tract described as the First Tract in
deed, recorded in Volume 2465, Page 413 of the deed records of Dallas
County, Texas on March 24, 1944, said part being more particularly
described as follows:
BEGINNING at a point, said point being the intersection point of the north
right-of-way line of Quorum Loop North (80' R.O.W.) and the west
right-of-way line of Dallas Parkway (200' R.O.W.);
THENCE N 80(degrees) 40' 39' W, along the north right-of-way line of said
Quorum Loop North, for a distance of 470.93 feet to the point of a
curvature of a curve to the right whose delta is 80(degrees) 15' 39" and
whose radius is 335.20 feet;
THENCE, along said curve to the right, for a distance of 469.55 feet to
the point of tangency of said curve;
THENCE N 0(degrees) 25' 00" W for a distance of 232.50 feet to a point for
corner;
THENCE N 85(degrees) 50' 54" E for a distance of 884.52 feet to a point
for corner, said point being located in the west right-of-way of said
Dallas Parkway;
THENCE S 10(degrees) 56' 00" W, along the west right-of-way of Dallas
Parkway, for a distance of 663.79 feet to a point, said point being the
point of curvature of a curve to the left whose delta is 01(degrees) 12'
11" and whose radius is 2391.86 feet;
THENCE Southerly, along said curve, for a distance of 50.22 feet to the
POINT OF BEGINNING;
CONTAINING 480,009.96 square feet of 11.020 acres of land.
SECTION 2. In the hereinabove described land or building, no land shall be
used, erected or converted to any use other than:
<PAGE>
1. Office
2. Hotel (including related restaurants, alcoholic beverage sales, and
retail sales facilities);
3. General Retail;
4. Restaurant (including related alcoholic beverage sales for
on-premises consumption);
5. Surface parking to meet off-street parking requirements;
6. Parking structure to meet off-street parking requirements
7. Access, utility, and drainage easements;
8. Accessory buildings, equipment, and uses customarily incident to the
above uses;
SECTION 3. The following special conditions are placed upon the above
described property:
1. No structure of any kind, and no part thereof shall be placed within
the following set back lines:
a. 125 feet from the center line of Dallas Parkway (a 120 foot
right-of-way);
b. 25 feet from major access drive;
c. Minimum 10 feet side yard set-back;
d. Minimum 10 feet rear yard set-back;
2. The following improvements are expressly excluded from the set-back
restrictions:
a. Structures below and covered by ground;
b. Steps, walks, driveways, parking areas, and curbing;
c. Planters, walls, fences or hedges not to exceed 4 feet in
height;
d. Landscaping and landscape features;
e. Guardhouses;
f. Exterior lighting sources;
3. No structure shall exceed 117 feet in total height (or as approved by
FAA) including mechanical penthouses, antennas, etc.
4. Maximum land coverage for any use shall be 50% (first floor of
building).
<PAGE>
5. All office facilities shall provide off-street parking at a ratio of
one (1) space for each 300 square feet of net floor area. The net floor area
shall be defined as the gross floor area less vertical air shafts, elevator
shafts, stairwells, mechanical rooms, electrical and telephone rooms, and
storage rooms.
6. All hotel or motel facilities shall provide off-street parking at the
following ratios:
a. One space per each guest room;
b. One space per each 100 square feet of net floor area in
meeting areas;
c. One space per each 100 square feet of net floor area in dining
rooms and cocktail lounges;
d. No spaces required for sundries shop;
e. One space per each employee for the first 20%;
f. No spaces required for malls, atriums, patios, lobbies, or
circulation areas;
7. All general retail facilities (exclusive of facilities within a hotel
or motel) shall provide off-street parking at a ratio of one space per each 200
square feet of floor area.
8. All restaurants shall provide off-street parking at a ratio of one
space per each 100 square feet of floor area (exclusive of facilities within a
hotel or motel).
9. All driveways, parking area, access easements, and walkways shall be
illuminated.
10. All exterior lighting sources shall be placed and reflected in such a
manner so as not to create annoyances, nuisances, or hazards.
<PAGE>
11. All building sides must be faced with face brick, stone, concrete,
aluminum, glass, or with similar quality face materials.
12. Wood frame construction of exterior walls shall be prohibited.
13. All utilities (public and private) shall be underground.
14. Mechanical equipment shall be constructed, located, and screened so as
not to interfere with the peace, comfort, and repose of the occupants of any
adjoining building.
15. All refuse and refuse containers shall be screened from the view of
all public streets adjacent to the property to be a solid fence or wall of at
least six (6) feet in height.
16. Landscaping shall be required on all sites contemporaneously with
completion of other improvements, but in no extent later than 180 days after
first occupancy or completion of buildings, which ever shall first occur.
17. Provide automatic underground sprinkling systems for all landscaped
areas.
18. Shall not obstruct sight lines at street or driveway intersections.
19. Owners and occupants (including lessees) of any part of the properties
shall jointly and severally have the duty and responsibility, at their sole cost
and expense, to keep that part of the properties so owned or occupied, including
buildings, improvements and grounds in connection therewith, in a
well-maintained, safe, clean and attractive condition at all times. Such
maintenance includes, but is not limited to the following:
a. Prompt removal of all litter, trash, refuse and wastes;
b. Lawn mowing;
c. Tree and shrub pruning;
<PAGE>
d. Watering;
e. Keeping exterior lighting and mechanical facilities in working
order;
f. Keeping lawn and garden areas alive, free of weeds, and
attractive;
g. Keeping parking areas, driveways, and roads in good repair;
h. Striping of parking areas and repainting of improvements;
i. Repair of exterior damages to improvements;
j. Provide and maintain driveway marking and striping as required
for fire lanes by the Addison Fire Department;
SECTION 4. All paved areas, permanent drives, streets and drainage
structure shall be constructed in accordance with standard City of Addison
specifications adopted for such purpose, and the same shall be done to the
satisfaction of the Director of Public Works.
SECTION 5. This Planned Development District is established pursuant to
the Comprehensive Zoning Ordinance of the City of Addison as amended, and the
provisions thereof unless directly conflict herewith, shall be applicable to
the Planned Development District No. 12.
SECTION 6. That all ordinances of the City in conflict with the provisions
of this Ordinance be, and the same are hereby repealed, and all other ordinances
of the City not in conflict with the provisions of this ordinance shall remain
in full force and effect.
SECTION 7. That should any paragraph, sentence, subdivision, clause,
phrase or section of this ordinance be adjudged or held to be unconstitutional,
illegal or invalid, the same shall not affect the validity of this ordinance as
a whole or any part or provision
<PAGE>
thereof other than the part so decided to be invalid, illegal, or
unconstitutional, and shall not affect the validity of the Comprehensive Zoning
Ordinance as a whole.
SECTION 8. That any person, firm, or corporation violating any of the
provisions or terms of this ordinance shall be subject to the same penalty as
provided for in the Comprehensive Zoning Ordinance of the City as heretofore
amended, and upon conviction shall be punished by a fine not to exceed the sum
of Two Hundred Dollars ($200.00) for each offense and that each day such
violation shall continue to exist shall constitute a separate offense.
SECTION 9. Whereas, the above described property requires that it be given
the above zoning classification in order to permit its proper development and in
order to protect the public interest, comfort and general welfare of the City
and creates an urgency and an emergency for the preservation of the public
health, safety, and welfare and requires that this ordinance shall take effect
immediately from and after its passage and publication of the caption as the law
in such cases provides.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ADDISON,
TEXAS, this the 15 day of July, 1980.
/s/ [ILLEGIBLE]
--------------------------
MAYOR
ATTEST:
/s/ Jacque Sharp
- --------------------------
CITY SECRETARY
<PAGE>
[GRAPHIC OMITTED]
Flood Map
<PAGE>
Refer to the FLOOD INSURANCE RATE MAP EFFECTIVE date shown on this map to
determine when actuarial rates apply to structures in the zones where elevations
or depths have been established.
To determine if flood insurance is available in this community, contact your
insurance agent, or call the National Flood Insurance Program, at (800)
638-6620, or (800) 424-8872.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
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NATIONAL FLOOD INSURANCE PROGRAM
================================================================================
FIRM
FLOOD INSURANCE RATE MAP
CITY OF
ADDISON, TEXAS
DALLAS COUNTY
ONLY PANEL PRINTED
C0MMUNITY-PANEL NUMBER
48108 0005 A
EFFECTIVE DATE:
JULY 16,1980
=======================================================
[SEAL] U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
FEDERAL INSURANCE ADMINISTRATION
-------------------------------------------------------
KEY TO MAP
[GRAPHIC OMITTED]
500-Year Flood Boundary -----------------------
100-Year Flood Boundary -----------------------
Zone Designations* With Date of Identification
e.g., 12/2/74
100-Year Flood Boundary -----------------------
500-Year Flood Boundary -----------------------
Base Flood Elevation Line -513-
With Elevation In Feet**
Base Flood Elevation in Feet (EL 987)
Where Uniform Within Zone**
Elevation Reference Mark RM7(x)
River Mile o M1.5
**Referenced to the National Geodetic Vertical Datum of 1929
----------
*EXPLANATION OF ZONE DESIGNATIONS
ZONE EXPLANATION
A Areas of 100-year flood; base flood elevations and
flood hazard factors not determined.
AO Areas of 100-year shallow flooding where depths are between one
(1) and three (3) feet; average depths of inundation are shown,
but no flood hazard factors are determined.
AH Areas of 100-year shallow flooding where depths are between one
(1) and three (3) feet; base flood elevations are shown, but no
flood hazard factors are determined.
A1-A30 Areas of 100-year flood; base flood elevations and flood hazard
factors determined.
A99 Areas of 100-year flood to be protected by flood protection system
under construction; base flood elevations and flood hazard factors
not determined.
B Areas between limits of the 100-year flood and 500-year flood; or
certain areas subject to 100-year flooding with average depths
less than one (1) foot or where the contributing drainage area is
less than one square mile; or areas protected by levees from the
base flood. (Medium shading)
C Areas of minimal flooding. (No shading)
D Areas of undetermined, but possible, flood hazards.
V Areas of 100-year coastal flood with velocity (wave action); base
flood elevations and flood hazard factors not determined.
V1-V30 Areas of 100-year coastal flood with velocity (wave action); base
flood elevations and flood hazard factors determined.
----------
NOTES TO USER
Certain areas not in the special flood hazard areas (zones A and V) may be
protected by flood control structures.
This map is for flood insurance purposes only; it does not necessarily show all
areas subject to flooding in the community or all planimetric features outside
special flood hazard areas.
----------
INITIAL IDENTIFICATION:
OCTOBER 29, 1976
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Hotel 1
Management Agreement
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Synopsis of Hotel Management Agreement
Date: January 1, 1993
Owner: The Registry Dallas Association
Manager: Kempinski International, Inc.
Premises: Grand Kempinski Dallas
Term: December 31, 2002
Management Fee: $300,000 per annum, in monthly installments of $25,000
Termination: With twelve months' notice
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Retail 1
Leases
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Synopsis of Retail Leases
Lessee: Nova Limo
Square Footage: 572 square feet (plus additional garage office)
Monthly Rent: $1,500.00 (plus $300.00 for the additional garage office)
Termination Date: September 1, 1998
Lessee: Voyage Travel
Square Footage: 532 square feet
Monthly Rent: $900.00
Termination Date: May 31, 1999
Lessee: Fashion With Pizzazz
Square Footage: 930 square feet
Monthly Rent: $2,250.00
Termination Date: June 31, 1999
Lessee: Enterprise
Square Footage: 280 square feet
Monthly Rent: $875.00
Termination Date: September 1, 1997
<PAGE>
HVS International, Mineola, New York Addenda: Synopsis of Retail 2
Leases
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Lessee: Menagerie Salon
Square Footage: 983 square feet
Monthly Rent: $1,500
Termination Date: April 30, 1998
Lessee: Mallasadi International
Square Footage: 930 square feet
Monthly Rent: $1,500
Termination Date: October 1, 1999
Lessee: Studio Kippenbrock
Square Footage: 1,134 square feet
Monthly Rent: $2,000
Termination Date: March 17, 1998
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 1
Valuation Formula
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Explanation of the Simultaneous Valuation Formula
The algebraic equation, known as the Simultaneous Valuation Formula, that solves
for the total property value using a ten-year mortgage equity technique was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the forecasted income before
debt service, leaving the net income to equity for each projection year. The net
income as of the 11th Year is capitalized into a reversionary value using the
terminal capitalization rate. The equity residual, which is the total
reversionary value less the mortgage balance at that point in time and less any
broker and legal costs associated with the sale, is discounted to the date of
value at the equity yield rate. The net income to equity for each of the
projection years is also discounted back to the date of value. The sum of these
discounted values equals the value of the equity component. Because the equity
component comprises a specific percentage of the total value, the value of the
mortgage and the total property can be computed easily.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 2
Valuation Formula
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This process can be expressed in two algebraic equations that set forth the
mathematical relationships between the known and unknown variables using the
following symbols.
NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to calculate
total property reversion (sales price at the end of the projection
period)
1/S^n = Current worth of $1 factor (discount factor) at the equity yield rate
Using these symbols, the following formulas can be derived to express some of
the components comprising this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount which equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the amount of the mortgage by
the annual debt service constant (f). The following formula represents debt
service.
f x M x V = Debt Service
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 3
Valuation Formula
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Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the Tenth Year is
calculated by dividing the 11th Year's net income before debt service (NI(11))
by the terminal capitalization rate (R(r)). The following formula represents the
property's Tenth-Year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage equity valuation process. Brokerage and legal
costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the Tenth Year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of a
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (f(p)) less the mortgage interest rate. The following
formula represents the fraction of a loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of a loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 4
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (d(r)) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity reversionary value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the Tenth Year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial amount of the mortgage is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 5
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each of the projection years is discounted to the present value at the
equity yield rate (1/S^n). The sum of all these cash flows is the value of the
equity (1 - M) V. The following formula represents the calculation of equity as
the sum of the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M)V
Combine Equations: Annual Cash Flow to Equity and Discounting the Cash Flow to
Equity to the Present Value - The last step is to arrive at one overall equation
that shows that the annual cash flow to equity plus the yearly discounting to
the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b(NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1-M)V
Because the property's value (V) is the only unknown, this equation can be
readily solved.
Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the Stabilized Year, it is
necessary to continue the projection to the 11th Year. In most instances, net
income before debt service beyond the Stabilized Year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income expressed as a percentage of total revenue will remain
constant and the dollar amount will escalate at the annual inflation rate. Hotel
investors are currently using inflation rates of approximately 3.5% annually.
The previously presented ten-year forecast of income and expense illustrates the
subject property's net income, which is assumed to increase by 3.5% annually
subsequent to the hotel's Stabilized Year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 6
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Table 1: Summary of Known Variables
- --------------------------------------------------------------------------------
Annual Net Income NI See Forecast
Loan-to-Loan Value M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.104844
Equity Yield Ye 20.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten years fp 0.155277
Terminal Capitalization Rate Rr 11.0%
- --------------------------------------------------------------------------------
The following table illustrates the present worth of a $1 factor at the 20.0%
equity yield rate.
================================================================================
Table 2: Present Worth of $1 Factor at Equity Yield Rate
- --------------------------------------------------------------------------------
Present Worth of $1
Year Factor at 20.0%
--------------------------------------------------
1997/98 0.833335
1998/99 0.694446
1999/00 0.578706
2000/01 0.482256
2001/02 0.401880
2002/03 0.334901
2003/04 0.279084
2004/05 0.232571
2005/06 0.193809
2006/07 0.161508
- --------------------------------------------------------------------------------
Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula.
The fraction of the loan paid off during the projection period is calculated as
follows.
P = ( 0.104844 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.163306
The annual debt service is calculated as f x M x V.
( f x M x V ) = 0.104844 x 0.70 x V = 0.073391 V
<PAGE>
HVS International, Mineola, New York Addenda: Simultaneous 7
Valuation Formula
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Inserting the known variables into the hotel valuation formula produces the
following:
( 9,827,000 - 0.073391 V) x 0.833333 +
( 9,609,000 - 0.073391 V) x 0.694444 +
( 9,944,000 - 0.073391 V) x 0.578704 +
(10,286,000 - 0.073391 V) x 0.482253 +
(10,646,000 - 0.073391 V) x 0.401878 +
(11,020,000 - 0.073391 V) x 0.334898 +
(11,403,000 - 0.073391 V) x 0.279082 +
(11,803,000 - 0.073391 V) x 0.232568 +
(12,219,000 - 0.073391 V) x 0.193807 +
(12,645,000 - 0.073391 V) x 0.161506 +
(((13,088,000 / 0.110 ) - ( 0.03 x (13,088,000 / 0.110 ))
(( 1 - 0.163306 ) x 0.70 x V )) x 0.161506 )=(1- 0.70 )V
Combine Like Terms
$62,523,604 - 0.402279V = (1 - 0.70)V
$62,523,604 = 0.70228V
V = $62,523,604 / 0.70228
V = $89,029,549
Value Indicated by the
Income Capitalization
Approach (Say) $89,000,000
<PAGE>
HVS International, Mineola, New York Qualifications of Samantha A. Sudre
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Samantha A. Sudre
================================================================================
Employment
1997 to present HVS INTERNATIONAL
Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports, and Investment Counseling)
Summer, 1996 BURGER KING CORPORATION
Miami, Florida
Summer, 1995 RIVIERA BISTRO
Fort Lauderdale, Florida
Summer, 1994 GLADSTONE'S 4 FISH
Los Angeles, California
Fall, 1992 HOTEL NEW OTANI
Osaka, Japan
Education BS - School of Hotel Administration, Cornell
University
Professional Cornell Society of Hotelmen
Affiliations
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
<PAGE>
HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
<PAGE>
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
- --------------------------------------------------------------------------------
=============
HVS
- -------------
INTERNATIONAL
=============
================================================================================
Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
==============================================================================
Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
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Hospitality Valuation Services Mineola, New York
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Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
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Hospitality Valuation Services Mineola, New York
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Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
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Economic Study and Appraisal
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Ramada Plaza Pentagon
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Alexandria, Virginia
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Prepared by:
Hospitality Valuation Services
A Division of Hotel Consulting Services, Inc.
372 Willis Avenue
Mineola, NY 11501
516-248-8828
Submitted to:
Mr. Shirish Godbole
Vice President
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
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[Letterhead of HVS International]
November 20, 1996
Mr. Shirish Godbole
Morgan Stanley Mortgage Capital, Inc.
1585 Broadway
New York, NY 10036
Re: Ramada Plaza Pentagon
Alexandria, Virginia
Ref. #9610267
Dear Mr. Godbole:
Pursuant to your request, we herewith submit our economic study and appraisal
pertaining to the above-captioned property. We have inspected the site and
facilities and analyzed the hostelry market conditions in the subject property's
area. Our report was prepared in accordance with, and is subject to, the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) and the Uniform Standards of Professional Practice (USPAP), as provided
by the Appraisal Institute.
Based on the available data, our analysis, and our experience in the hotel
industry, it is our opinion that the market value of the fee simple interest in
the subject property described in this report, as of January 1, 1997, is:
$6,600,000
SIX MILLION SIX HUNDRED THOUSAND DOLLARS
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings and valuation.
The economic study and appraisal is made part hereof, and must remain attached
in order for the value opinion set forth to be considered valid. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Very truly yours,
HOSPITALITY VALUATION SERVICES
A Division of Hotel Consulting Services, Inc.
/s/ Christopher J. Doherty
Christopher J. Doherty
Consulting and Valuation Analyst
/s/ Anne R. Lloyd-Jones
Anne R. Lloyd-Jones, CRE
Senior Vice President
/s/ Stephen Rushmore
Stephen Rushmore, CRE, MAI, CHA
President
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HVS International, Mineola, New York Table of Contents
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1. Executive Summary .............................................. 1
2. Nature of the Assignment ....................................... 3
3. Description of the Land, Improvements,
Zoning, Taxes, and Neighborhood ................................ 7
4. Market Area Analysis ........................................... 22
5. Overview of External Forces Affecting the U.S. Lodging Industry 36
6. Lodging Market Supply and Demand Analysis ...................... 52
7. Projection of Occupancy and Average Rate ....................... 72
8. Highest and Best Use ........................................... 87
9. Approaches to Value ............................................ 89
10. Income Capitalization Approach ................................. 92
11. Sales Comparison Approach ...................................... 130
12. Cost Approach .................................................. 138
13. Reconciliation of Value Indications ............................ 144
14. Statement of Assumptions and Limiting Conditions ............... 148
15. Certification .................................................. 151
Addenda
Photographs of the Subject Property
Photographs of the Competitors
Legal Description
Explanation of the Simultaneous Valuation Formula
Qualifications
Christopher J. Doherty
Anne R. Lloyd-Jones, CRE
Stephen Rushmore, CRE, MAI, CHA
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HVS International, Mineola, New York Executive Summary 1
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1. Executive Summary
Property: Ramada Plaza Pentagon
Location: 4641 Kenmore Avenue
Alexandria, Virginia 22304
Date of Inspection: October 29, 1996
Interest Appraised: Fee simple
Date of Value: January 1, 1997
Land Description
Area: +/-2.6251 acres, or +/-114,349 square feet
Zoning: OCH - Office Commercial High Zone
Assessor's Parcel Number: Map 20, Block 2, Lot 1
Improvements Description
Age: Constructed in 1975
Property Type: Full-service
Guestrooms: 193
Number of Stories: Eleven stories
Food and Beverage Facilities: Nickels Bar and Grill (85 seats)
Meeting Space: Nine rooms totaling 6,344 square feet
Parking: 340 spaces (in adjacent parking structure)
Summary of Value Parameters
Highest and Best Use (as if vacant): Hold for speculative use
Highest and Best Use (as improved): Lodging facility
Marketing Period: Six to nine months
Number of Years to Stabilize: Two
Stabilized Year: 1998
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HVS International, Mineola, New York Executive Summary 2
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Valuation Assumptions
Mortgage Interest Rate: 9.5%
Amortization Period: 25 years
Debt Service Constant: 0.111856
Loan-to-Value Ratio: 70%
Stabilized Inflation Rate: 3.5%
Equity Yield Rate: 22.0%
Terminal Capitalization Rate: 11.5%
Brokerage and Legal Fees: 3.0%
Holding Period: Ten years
Calculated Discount Rate: 14.56%
Estimates of Value
Income Capitalization Approach: $6,700,000
Sales Comparison Approach: $5,700,000 - $8,000,000
Cost Approach (Replacement Cost): $11,400,000
Market Value Conclusion: $6,600,000
Market Value Conclusion per Room: $34,200
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HVS International, Mineola, New York Nature of the Assignment 3
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2. Nature of the Assignment
Subject of the Economic Study and Appraisal
The subject of the economic study and appraisal is the fee simple interest in a
+/-114,349-square-foot (+/-2.6251-acre) parcel improved with a 193-room,
full-service lodging facility known as the Ramada Plaza Pentagon, which opened
in 1975. In addition to guestrooms, the subject property contains approximately
6,344 square feet of meeting space, a restaurant and bar, an indoor swimming
pool, a small exercise room, a gift shop, a business center, and an adjacent
parking garage. The hotel is located near the northeastern quadrant of the
intersection of Van Dorn Street and Seminary Road, roughly six miles south of
Washington, DC. Municipal jurisdictions governing the property include the City
of Alexandria and the Commonwealth of Virginia. The hotel's civic address is
4641 Kenmore Avenue, Alexandria, Virginia, 22304.
Objective of the Economic Study and Appraisal
The objective of the economic study and appraisal is to evaluate the supply and
demand factors affecting the market for transient accommodations in the
Alexandria area for the purpose of estimating the market value of the subject
property. Market value is defined by the Office of the Comptroller of the
Currency (OCC), 12 CFR, Part 34, as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under
conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what
they consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
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HVS International, Mineola, New York Nature of the Assignment 4
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4. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.(1)
Use of the Appraisal
This appraisal is being prepared for the use of Morgan Stanley Mortgage Capital,
Inc. in connection with their proposed financing of a package of 17 hotels,
including the subject property, which are owned by Ashford Financial Corporation
or related entities. The information presented in this report should not be
disseminated to the public or third parties without the express written consent
of Hospitality Valuation Services.
Scope of the Appraisal
All information was collected and analyzed by the staff of Hospitality Valuation
Services. Data such as historical operating statements, site plans, floor plans,
and so forth were supplied by the Ashford Financial Corporation and Remington
Hospitality, Inc. Unless noted otherwise, we have inspected the competitive
lodging facilities and analyzed the sales summarized in this report, and our
value conclusion is based on this investigation and analysis.
Property Rights Appraised
The property rights appraised are the fee simple ownership of the land and
improvements, including the furniture, fixtures, and equipment. The fee simple
interest is defined as "absolute ownership unencumbered by any other interest or
estate subject only to the four powers of government."(2) The subject property
is appraised as a going concern (i.e., an open and operating facility).
(1) Federal Register, Vol. 55, No. 165, August 24, 1990; p. 34696.
(2) The Dictionary of Real Estate Appraisal - Second Edition, American
Institute of Real Estate Appraisers, Chicago, IL, 1989, p. 120.
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HVS International, Mineola, New York Nature of the Assignment 5
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Method of Study
The methodology used to develop this economic study and appraisal is based on
the market research and valuation techniques set forth in the textbooks authored
by HVS International for the American Institute of Real Estate Appraisers and
the Appraisal Institute, entitled The Valuation of Hotels and Motels,(1) Hotels,
Motels and Restaurants: Valuations and Market Studies,(2) The Computerized
Income Approach to Hotel/Motel Market Studies and Valuations,(3) and Hotels and
Motels: A Guide to Market Analysis, Investment Analysis, and Valuations.(4)
The appraisal will consider the three standard approaches to value: income
capitalization, sales comparison, and cost. Because lodging facilities are
income-producing properties that are normally bought and sold on the basis of
capitalization of their anticipated stabilized earning power, the greatest
weight is given to the value indicated by the income capitalization approach. We
find that most hotel investors employ a similar procedure in formulating their
purchase decisions, and thus the income capitalization approach most closely
reflects the rationale of typical buyers. When appropriate, the sales comparison
and cost approaches are used to test the reasonableness of the results indicated
by the income capitalization approach.
Ownership, Franchise, and Management
A photocopy of the subject property's legal description, which was provided by
the Ashford Financial Corporation, is presented in the Addenda to this report;
the appraisers assume no responsibility regarding the accuracy of this document.
The subject property is owned by Alexandria Virginia Hotel Limited Partnership,
an entity controlled by the Ashford Financial Corporation. Remington
Hospitality, Inc., the current management company, took over the hotel from
Prime Hospitality in October of 1994. An abstract of the management contract is
presented in the Addenda to this report.
(1) The Valuation of Hotels and Motels, Stephen Rushmore, American Institute
of Real Estate Appraisers, Chicago, IL, 1978.
(2) Hotels, Motels and Restaurants: Valuations and Market Studies, Stephen
Rushmore, American Institute of Real Estate Appraisers, Chicago, IL, 1983.
(3) The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations, Stephen Rushmore, American Institute of Real Estate
Appraisers, Chicago, IL, 1990.
(4) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992.
<PAGE>
HVS International, Mineola, New York Nature of the Assignment 6
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The property has been franchised as a Ramada Plaza since its opening in 1975,
but the name of the property changed from the Ramada Plaza Seminary Road to the
Ramada Plaza Pentagon in early 1996. The subject property's franchise agreement
expires in 2009.
Marketing Period
In light of the renewed interest in hotel investments and the increasing
availability of debt and equity capital, we believe that it will take six to
nine months to sell the subject property assuming it is placed on the market at
the concluded value.
Effective Date of the Appraisal
The effective date of the appraisal is January 1, 1997. All projections are
expressed in inflated dollars, and the value estimate represents 1997 dollars.
Date of Inspection
The subject property was inspected by Anne R. Lloyd-Jones on October 26, 1996
and by Christopher J. Doherty on October 29, 1996.
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HVS International, Mineola, New York Description of the Land, Improvements 7
Zoning, Taxes, and Neighborhood
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3. Description of the Land, Improvements, Zoning, Taxes, and Neighborhood
LAND
The suitability of the land for the operation of a lodging facility is an
important consideration affecting the economic viability of a property and its
overall value. Factors such as size, topography, access, visibility, and the
availability of utilities have a direct impact on the desirability of a
particular site.
Size and Topography
The subject site is located near the northeastern corner of the intersection of
Van Dorn Street (which lies on a north/south axis) and Seminary Road (which
extends from east to west). Its civic address places the property on Kenmore
Avenue, which extends west from Van Dorn Street at a point just north of
Seminary Road, then loops around to intersect Van Dorn Street again at a point
just south of Seminary Road. Municipal jurisdictions governing the property
include the City of Alexandria and the Commonwealth of Virginia; we note that
the Alexandria is an independent city, and is not part of any county or other
municipality.
According to an August 25, 1994 survey prepared by Absolute Surveys
Incorporated, the subject parcel measures approximately +/-114,349 square feet,
or +/-2.6251 acres. The site is irregular in shape, with frontage along Seminary
Road, Kenmore Avenue, and Van Dorn Street. The only vehicular access to the
property is provided by Kenmore Avenue. The topography of the parcel is
generally flat, with a gentle slope from east to west. Overall, the size and
topography of the site appear well-suited for hotel use. The parcel is fully
developed, and there is no excess land available for expansion.
Easements
There are two easements on the subject property's site. The first is was granted
to the Chesapeake and Potomac Telephone Company to accommodate telephone lines.
The second is an exclusive right or option to the City of Alexandria to acquire
an easement for sewer use. It is our understanding
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HVS International, Mineola, New York Description of the Land, Improvements 8
Zoning, Taxes, and Neighborhood
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that this easement was not exercised within a given time limitation, and thus it
will not have any impact on the subject property.
Regional Access
It is important to analyze a lodging facility's ease of access with respect to
regional and local transportation routes and demand generators. Major
thoroughfares that serve the subject property's area include the Henry G.
Shirley Memorial Highway (Interstate 395), the Curtis Memorial Parkway
(Interstate 66), the Capital Beltway (Interstates 95 and 495), and Jefferson
Davis Highway (U.S. Route 1). The Ramada's proximity to this integrated highway
network allows convenient transportation between the hotel and the surrounding
communities and commercial developments. Overall, regional access to the Ramada
Plaza Pentagon is considered excellent.
Interstate 395 is the main highway in downtown Washington, DC. This interstate
originates at its intersection with the Capital Beltway, which encircles the
entire Washington metropolitan area, in the vicinity of Springfield, Virginia.
It then traverses the City of Alexandria and Arlington County before crossing
the Potomac River into Washington, DC (via the George Mason Memorial Bridge).
Interstate 395 separates Crystal City from the Pentagon.
Interstate 66 begins at the Theodore Roosevelt Memorial Bridge, in the vicinity
of the Arlington National Cemetery Historic Site, and extends west across the
Commonwealth of Virginia to a point just beyond the City of Front Royal, where
the it terminates at Interstate 81. This intersection with I-81 provides
travelers on I-66 with access to most areas of western Virginia, and to many
parts of Maryland and Pennsylvania to the north, as well as Tennessee and North
Carolina to the south. Interstate 66 traverses Arlington County northwest of the
subject property.
The Capital Beltway consists of Intestates 95 and 495, which join to form a
large circle that encompassing Washington and its surrounding suburbs.
Generally, I-495 comprises the northern and western portions of the circle,
while I-95 extends along the east and south sides of the city. This roadway
allows motorists to bypass the traffic in the Washington metropolitan area if
they are en route to other destinations.
Route 1, which is known locally as the Jefferson Davis Highway, is the main
thoroughfare in Crystal City (near National Airport). A number of the subject
property's competitors are located along this roadway. Route 1 extends
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HVS International, Mineola, New York Description of the Land, Improvements 9
Zoning, Taxes, and Neighborhood
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the entire length of the eastern seaboard, from Maine to Florida, roughly
paralleling the coastline.
Local Access and Visibility
Local access to the subject property is indirect, and may be confusing for
travelers who are not familiar with the area. Most guests arrive via I-395,
which passes immediately west of the hotel. To reach the hotel from the north-
or southbound lanes of I-395, guests must exit at Seminary Road and proceed
east. Because the hotel is located so close to the interstate, guests traveling
on Seminary Road cannot see the property until they have already passed it;
visibility is completely obscured by numerous exits ramps and raised bypasses
from I-395. Motorists must pass the Ramada and turn left at the end of the next
block, onto Library Lane; from this point, they can either double back, return
to Seminary Road, and proceed one-half block to Kenmore Avenue, or turn left and
negotiate their way through a supermarket parking lot to Kenmore Avenue and the
subject property's entrance.
A clear view of the hotel is available from I-395. Southbound motorists can see
the 11-story tower from a distance of approximately one mile, and northbound
travelers can see the property for roughly one-half of a mile. As noted above,
visibility from Seminary Road is poor.
Airport Access
Washington's National Airport is located approximately four miles northeast of
the Ramada Plaza Pentagon, and can be reached be taking Exit 10 east off I-395.
This close proximity to a major municipal airport is considered a favorable
locational attribute of the subject property.
Access to Local Demand Generators
The Ramada Plaza Pentagon is situated near many of the area's primary
generators of lodging demand, as illustrated by the following table.
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Table 3-1 Local Demand Generators
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Approximate Distance Approximate Driving
Demand Generator from Subject Site (in Miles) Time (in Minutes)
---------------- ---------------------------- -----------------
Pentagon 3.0 5
Patents & Trademarks 1.0 5
Department of Agriculture 3.0 5
Department of Defense 3.0 5
Downtown Alexandria 4.0 10
Washington, DC 6.0 15
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The subject site is located on the western edge of the City of Alexandria, but
is still relatively close to many of the area's businesses. By virtue of the
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HVS International, Mineola, New York Description of the Land, Improvements 10
Zoning, Taxes, and Neighborhood
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excellent local highway system, access to all nearby demand generators is
convenient.
Utilities
The subject site is served by all necessary utilities, which are provided as
follows.
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Table 3-2 Available Utilities
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Utility Provider
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Water Virginia American Water Company
Electricity Virginia Power
Telephone Bell Atlantic, MCI
Gas Washington Gas and Light
Garbage and Trash BFI
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Soil and Subsoil Conditions
Geological and soil reports were not provided to the appraisers or made
available for review during the preparation of this report. The appraisers are
not qualified to evaluate soil conditions other than by a visual inspection of
the surface.
Nuisances and Hazards
The appraisers have not been informed of any site-specific nuisances or hazards,
and there were no visible signs of toxic ground contaminants at the time of our
inspection. Because the appraisers are not experts in this field, we do not
warrant the absence of hazardous waste, and we urge the reader to obtain an
independent analysis of this factor.
Flood Zone
Possible locational hazards include flood potential. The subject property is
located within Flood Zone X. This designation applies to areas that have been
determined to be outside of he 500-year flood plain, indicating that there is
little or no potential for flooding.
Seismicity
Information regarding the seismicity of the area surrounding the subject
property was not available, and we assume that the hotel is not situated in an
area of seismic danger.
Land Conclusion
The subject parcel appears well-suited as the site of a lodging facility. We
have analyzed the issues of size, topography, access, visibility, and the
availability of utilities, and we note the following advantages and
disadvantages.
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HVS International, Mineola, New York Description of the Land, Improvements 11
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Advantages
o Proximity to the Pentagon and numerous other demand generators
o Accessible from a variety of local roadways and interstate highways
o Situated immediately off a major interstate
o Served by all necessary utilities
Disadvantages
o Not located in the immediate vicinity of Pentagon and other government
demand generators
o Moderately confusing access from Seminary Road
o Lack of visibility for eastbound motorists on Seminary Road
The advantages exhibited by the subject site are all important locational
characteristics for hotels in this market. Overall, the parcel appears to be
well suited for its current use, and its relatively smooth topography and
proximity to major highways and local routes are favorable attributes.
IMPROVEMENTS
The quality of a lodging facility's physical improvements has a direct influence
on its marketability and attainable occupancy and average rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section investigates the subject property's physical
improvements and personal property in an effort to determine how they contribute
to total value. The following description of the improvements is based on our
inspection of the hotel and information provided by management representatives.
The Ramada Plaza Pentagon is a full-service lodging facility containing 193
rentable units, 6,344 square feet of meeting space, a restaurant and bar, an
indoor swimming pool, a small exercise room, a gift shop, and a business center,
a five-story parking garage with a 340-car capacity, and appropriate
back-of-the-house facilities. The 11-story hotel opened in early 1975, and is 21
years old as of the date of this appraisal. The property was acquired by the
Ashford Financial Corporation in October of 1994, and was reported to have been
in extremely poor condition at that time. Subsequent to the sale, the subject
property received an extensive $2,400,000 renovation that addressed the building
exterior, the public areas, and the guestrooms. The Ramada Plaza is now judged
to be in average to good condition, and
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HVS International, Mineola, New York Description of the Land, Improvements 12
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management representatives report that all building systems are in working
order. The hotel operates under a license agreement with Ramada, and reportedly
meets the standards for lodging facilities of that brand. Based on our
inspection and information provided by management representatives, the following
table summarizes the hotel's facilities.
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Table 3-3 Facilities Summary
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Guestrooms (No. of Units)
Kings 61
Double/doubles 124
Suites 8
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Total 193
Food and Beverage Outlets (No. of Seats)
Nickels Bar and Grill 85
Meeting and Banquet Rooms (Square Footage)
Winchester 496
Manchester 496
Cambridge 496
Carrington 496
Room 408 550
Room 409 550
Room 416 550
Room 419 550
Nuage Room 2,160
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Total 6,344
Recreational & Other Amenities
Indoor swimming pool, exercise room
Parking Spaces 340
Elevators
Three passenger, one service
Life Safety Systems
Full sprinkler system, hard-wired fire alarms
Laundry
Two 75-lb.-capacity washers, one 50-lb.-capacity washer,
five 110-lb.-capacity dryers
Construction Details
Poured concrete foundation, steel structure, concrete walls and roof
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Construction and Design
The subject property includes an 11-story guestroom tower with a height of 122
feet and a parking garage that is located off the southeast side of main
building. The guestroom tower is rectangular and is situated between the
one-story restaurant building and the one-story pool area. It should be noted
that these three areas are all part of one structure. The footprint of the tower
measures roughly 46,150 square feet, and the parking garage covers an area of
approximately 23,040 square feet. The property features poured concrete slab and
reinforced concrete footings in the foundation. The building was not constructed
on pilings, but it is equipped with frost walls. The frame of the main building
is constructed of steel and poured cast-in-place concrete, and is fireproof.
Exterior walls are constructed of concrete panels and poured concrete, and are
finished with paint and stucco.
Windows throughout the facility are double paned, but none are glazed. The
guestroom windows open, but those in the public and employee areas do not. The
high roof deck of the 11-story tower is constructed of concrete, and covered
with asphalt and roll roofing.
The first level of the property features some public areas and a majority of the
back-of-the-house space. Four small boardrooms are located on the fourth floor.
Guestrooms are situated on the second through 11th floors. Management
representatives report that the buildings are in good condition, and our
inspection revealed no visible signs of damage.
Lobby
As noted earlier, the subject property underwent a $2,400,000 renovation after
being acquired by the Ashford Financial Corporation, and this upgrading included
the lobby. Guests enter the lobby from the hotel's main entrance, which is
situated on the southeast side of the building. The gift shop is located
immediately right of the entrance, as is a corridor leading to a majority of the
property's meeting space. A corridor to the left leads to the sales offices, the
guest elevators, the swimming pool, and the parking garage. After entering,
guests pass through a small seating area and can either approach the front desk,
which is situated to the left, or climb three stairs to another raised seating
area before reaching the restaurant, the business center, and one of the
property's meeting rooms.
Food and Beverage Outlets
Nickels Bar and Grill is situated on the hotel's first level, just past the
lobby and the raised seating area. This facility offers breakfast, lunch, and
dinner seven days a week, and is open from 6:30 a.m. to 10:00 p.m. Monday
through Friday and 7:00 a.m. to 10:00 p.m. on weekends. The restaurant is
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HVS International, Mineola, New York Description of the Land, Improvements 14
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attractive and features upholstered booths, various artwork, and plants. A small
bar is centrally located in the tiered restaurant. This bar area was recently
moved, and the area that formerly served as the hotel's lounge was converted to
the Nuage meeting room. The restaurant was completely upgraded during the recent
renovation, and appears to be in good condition.
Meeting and Banquet Space
The subject property's function space is located on the first and fourth floors.
From the main entrance, guests can reach the 1,984-square-foot ballroom by
following a corridor that extends to the right, just past gift shop. This
ballroom can be divided into four smaller sections known as the Winchester,
Manchester, Cambridge, and Carrington Rooms. As noted earlier, the former lounge
area has been converted to the 2,160-square-foot Nuage Room. This facility
adjoins the west side of the restaurant, and features a tiered layout that
allows a variety of seating arrangements. Four guestrooms on the fourth floor
(Rooms 408, 409, 416, and 419) are currently used as small boardrooms. Following
the recent renovation, all of the Ramada's meeting space appears to be in good
condition.
Guestrooms
The subject property has a total of 193 guestrooms; 61 offer king beds, 124 have
two double beds (four of which are handicapped accessible), and eight are
suites. Four of the double/double units have been modified for the use of
disabled guests, and 97 units have been set aside for non-smokers. We note that
this type of amenity costs very little and requires no structural changes, and
we expect the number of rooms allocated for this purpose to be increased or
reduced depending on demand and guest response.
Guestrooms are double-loaded along interior corridors. The units feature a
standard configuration consisting of one room and a bathroom that is situated
left or right of the entrance. Typical guestrooms are furnished with the
following items.
o One king-size or two double beds
o Remote-control color television situated on a wooden armoire with drawers
o Two nightstands; one with a digital alarm clock, the other with a
telephone
o Wall-mounted lamps on both sides of the bed(s)
o A desk with chair
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o A small seating area featuring an upholstered chair, an ottoman, a square
table, and a floor lamp
o Vanity outside the bathroom equipped with a coffeemaker, an ice bucket,
and drinking glasses
o Open alcove with rod to hang clothing
o Assorted artwork
The bathrooms feature a vanity sink, a tub/shower combination, and a toilet.
Amenities include a heat lamp, a hair dryer, and typical bath items. All
guestrooms feature splatter wallpaper, popcorn ceilings, and a combination of
fluorescent and incandescent lighting.
At the time of our inspection, the subject property's guestrooms appeared to be
in average to good condition. The 1995 renovation included replacement of all
guestroom soft goods, the installation of new light fixtures, televisions, and
electronic locks, and replacement of the in-room HVAC units. In addition,
bathroom vinyl, tile, and vanities were upgraded in half of the units. These
renovations should help to maintain the subject property's competitive position,
but are not expected to allow an improvement in the Ramada's overall market
share.
Guestroom Corridors
Guestroom corridors are wide enough to permit the easy passage of housekeeping
and room service carts. The corridors are finished with vinyl wallcovering,
popcorn ceilings, and carpet that is in relatively good condition. Lighting is
adequate. Each guestroom floor contains a vending area, a housekeeping closet,
and an electrical closet.
Recreational Amenities
Recreational amenities consist of an indoor swimming pool and a small exercise
room that are both located on the west side of the main building. We note that
the Ramada also maintains an agreement with the Skyline Health Club, which is
located on Leesburg Pike roughly two miles northeast of the hotel. This
arrangement allows guests to use the club's extensive facilities free of charge.
Although the agreement with the Skyline Health Club is beneficial, it does not
eliminate the need for a larger, better-equipped facility than is currently
available at the hotel.
Back-of-the-House Space
All of the hotel's back-of-the-house space is situated on the first floor. Based
on information provided by management representatives, the hotel's operating
systems are all in good working order. The main kitchen is located between the
restaurant and ballroom, and its size and equipment appear to
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HVS International, Mineola, New York Description of the Land, Improvements 16
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be adequate to meet the hotel's needs. Sales and other administrative offices
are located behind the front desk, on the west side of the building. The general
manager's office is situated opposite the ballroom entrance, on the east side of
the structure. Laundry facilities consist of three washers and five dryers,
which are located on the first floor of the main structure.
Vertical Transportation
The subject property features three electric guest elevators and one hydraulic
service elevator. Each elevator serves all 11 floors. As noted earlier, the
guest elevator core is located down a corridor to the left of the main entrance.
Heating, Ventilation, and Air Conditioning (HVAC)
Guestrooms are heated and cooled by individual through-the-wall HVAC units that
were installed during the most recent renovation. The boiler operates on oil,
and public areas are cooled by three centralized packaged air conditioning
units. Management representatives indicate that all of the property's HVAC
equipment is in good condition.
Fire Protection
Fire protection is provided by hard-wired, single-station smoke alarms in the
guestrooms, public spaces, and employee areas. The fire alarms are wired to the
front desk, but are not connected to the fire department. Fire sprinklers are
installed throughout the hotel.
Security
Guestrooms are equipped with electronic door locks. Although this is a good
security measure, management indicates that employee and guest entrances are not
separated and access to the property is never restricted, which somewhat negates
the advantage provided by the electronic door locks.
Asbestos
According to information provided by management representatives, there is no
asbestos present in the subject property's improvements; however, we have not
been provided with an asbestos report to confirm this assertion. The reader
should be advised that any costs associated with asbestos removal or containment
may have an unfavorable impact on the hotel's market value, and the estimate set
forth in this appraisal reflects our value conclusions prior to the deduction of
any such costs. We suggest that interested parties initiate an independent
analysis regarding current asbestos levels and the capital expenditures
necessary to remove any asbestos that is present.
ADA Conformance
Following the January 26, 1992 passage of the Americans with Disabilities Act
(ADA), hotels are subject to new physical standards. The appraisers are not
experts on ADA compliance, and we render no opinion regarding the
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HVS International, Mineola, New York Description of the Land, Improvements 17
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subject property's conformance to ADA standards. Capital expenditures that may
be necessary to bring the property into accordance with the ADA will reduce our
estimate of market value. Any ongoing costs related to ADA regulations are
expected to be funded by normal replacement reserves.
Conclusion
Overall, the subject property's improvements appear appropriate for hotel use.
Following a $2,400,000 renovation in 1995, the facilities are now in
sufficiently good condition to maintain the Ramada's competitive posture in the
market; however, we believe that additional capital expenditures will be
necessary if the hotel's market share is to increase. For the purpose of this
appraisal, we assume that the subject property will be maintained in its current
condition throughout the ten-year holding period. Specifically, we assume that
management will employ standard preventive maintenance measures, and that a
reserve for replacement fund will be established which will fund the cost of any
future capital expenditures that may be necessary.
ZONING
According to the City of Alexandria zoning regulations and map, the subject
property is zoned as follows.
OCH - Office Commercial High Zone
Permitted uses in this zoning designation include hotels, family dwellings,
office space, churches, hospitals, funeral homes, and pet-grooming
establishments. Based on this information, the subject property appears to
conform to local zoning regulations. We assume that all necessary permits and
approvals have been secured (including an appropriate liquor license), and that
the subject property was constructed in accordance with local zoning ordinances,
building codes, and all other applicable regulations. Our zoning analysis should
be verified before any physical changes are made to the hotel.
ASSESSED VALUE AND TAXES
Property tax is one of the primary revenue sources of municipalities. Based on
the concept that the tax burden should be distributed in proportion to the value
of all properties within a taxing jurisdiction, a system of assessments is
established. Theoretically, the assessed value placed on each parcel bears a
definite relationship to market value, so properties of equal market value will
have similar assessments, and properties with higher and lower values will have
proportionately larger and smaller assessments. Depending on the taxing policy
of the municipality, property taxes can be based on the value of the real
property or the value of the personal
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HVS International, Mineola, New York Description of the Land, Improvements 18
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property and the real property. The taxing jurisdiction governing the Ramada
assesses both real and personal property; the assessed value ratio is reported
to be approximately 100% of market value.
Because the objective of assessed value is to maintain a specific value
relationship among all properties in a taxing jurisdiction, comparable hotel
assessments should be evaluated to determine whether the subject property's
assessed value is equitable. A review of the assessed values of two comparable
hotels located in the City of Alexandria reveals the following information.
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Table 3-4 1996 Assessed Value of Comparable Hotels
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<TABLE>
<CAPTION>
Total Assessment Assessment per Room
----------------------------- ------------------------
No. of
Hotel Rooms Land Improvements Land Improvements
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<S> <C> <C> <C> <C> <C>
Subject Property 193 $2,660,200 $5,788,300 $13,783 $29,991
Ramada Plaza Old Town 258 2,522,200 9,281,900 9,776 35,976
Holiday Inn - Eisenhower 201 2,445,900 7,404,100 12,169 36,836
</TABLE>
Source: City of Alexandria Assessor's Office
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The table above illustrates the 1996 assessed values of the subject property and
two of its primary competitors. The subject property's overall land assessment
is the highest among these competitors, while its improvements assessment is the
lowest. The same is true on a per-room basis. We believe that the high land
assessment probably reflects the fact that the hotel occupies a prime commercial
location near I-395; the low improvements assessment can be attributed to the
fact that the hotel's facilities were slightly inferior to those of the other
properties at the time of the assessment. The following table sets forth the
historical real property tax rates applicable to the hotel.
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HVS International, Mineola, New York Description of the Land, Improvements 19
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Table 3-5 Historical Real Tax Rates Applicable to the Subject Property
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Tax Rate per $100 Percent
Year of Assessment Change
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1991 1.045 ---
1992 1.045 0.00%
1993 1.070 2.39
1994 1.070 0.00
1995 1.070 0.00
1996 1.070 0.00
Avg. Annual
Comp. Change,
1991-96 0.47%
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The subject property's 1996 tax burden is calculated as follows.
$8,448,500 Total Assessment x 1.07 Rate =
$90,399 Real Tax Burden +
$40,394 Personal and Special Tax =
$130,793 (Say) $131,000 Total Tax Burden
Tax rates in the City of Alexandria have remained relatively stable since 1991,
but local officials indicate that the completion of the recent renovation is
likely to cause an increase in the subject property's assessment. In light of
this consideration, we assume that the hotel's overall tax burden will increase
at the underlying inflation rate of 3.5% annually, yielding the following
forecast.
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Table 3-6 Forecast of Property Tax Expense (+000)
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1997 Stabilized
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Projected Property Taxes (+000) $131 $136
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NEIGHBORHOOD
The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract
and properly serve a particular market segment. This section investigates the
subject property's neighborhood and evaluates any pertinent locational factors
that could affect its occupancy, average rate, food and beverage revenues, and
overall profitability.
The neighborhood surrounding the subject property is primarily residential in
character, with some limited retail uses. The vast majority of the land situated
to the east and southeast of the hotel is improved with middle- to upper-income
housing. Alexandria Hospital is situated just east of the Ramada, followed by
residential areas that extend roughly five miles east toward downtown
Alexandria. This area, which is also known as "Old Town" Alexandria, features
numerous retail outlets, restaurants, and city buildings, all built in an
attractive historic style.
Southwest of the subject property, beyond several apartment buildings and
residential developments, is the Landmark Center Mall, which draws some visitors
from the surrounding area. A large concentration of retail outlets and office
space is located to the northwest, along King Street/Leesburg Pike. Nearby
hotels include the Hampton Inn and adjacent Homewood Suites. Well-known retail
establishments and restaurants are available in the Burlington Plaza, Leesburg
Pike Plaza, and the Skyline Shopping Mall.
There are numerous types of developments in the subject property's immediate
vicinity. A mini-mall containing a Safeway supermarket, a CVS drugstore, a
Blockbuster Video outlets, a 7-11 convenience store, a beauty salon, a pizza
parlor, and a small bank is situated northeast of the hotel, across Kenmore
Avenue. An Exxon service station is located just past this strip mall. Other
developments surrounding the Ramada include a Steak and Ale restaurant to the
southeast, the aforementioned Alexandria Hospital to the east, apartment
buildings to the south, and I-395 and the Radisson at St. Mark's Place to the
west. Past these initial commercial developments, residential usage dominates.
Overall, the neighborhood surrounding the Ramada Plaza Pentagon appears well
suited for the operation of a lodging facility. Numerous retail outlets and
malls and a limited inventory of office space generate a base level of demand
and provide important support services for the subject property's guests. The
neighborhood's attractive surroundings should help the hotel to maintain its
market position, and although it is somewhat
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HVS International, Mineola, New York Description of the Land, Improvements 21
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removed from the government demand generators in the vicinity of the Pentagon,
the neighborhood appears to have no detrimental impact on the hotel's attainable
occupancy and average rate.
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HVS International, Mineola, New York Market Area Analysis 22
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4. Market Area Analysis
The economic vitality of the market surrounding the subject property is an
important consideration in forecasting lodging demand and income potential.
Economic and demographic trends that reflect the amount of visitation provide a
basis from which to project hostelry demand. The purpose of the area analysis is
to review available economic and demographic data to determine whether the local
market will undergo economic growth, stability, or decline. In addition to
predicting the direction of the economy, the rate of change must be quantified.
These trends are then correlated based on their propensity to reflect variations
in lodging demand with the objective of forecasting the growth or decline in
visitation by individual market segment.
Market Area Definition
The subject property is located in the City of Alexandria. The city is not part
of a county, but as a result of its geographical location (just south of
Arlington County and west of Fairfax County), it is included in the Washington
Metropolitan Statistical Area (MSA). Because most of the subject property's
competitors are located in Arlington County and most of the demand captured by
the hotel originates there as well, we have included the county in our
discussion of the market area.
Arlington County is an urban area encompassing approximately 26 square miles
directly across the Potomac River from Washington, DC. Its proximity to
Washington has made this area a highly desirable commercial and residential
location. Most of the high-density commercial and residential development in the
county is concentrated around Metro stations in the Rosslyn-Ballston and
Jefferson Davis corridors; the latter includes both Crystal City and Pentagon
City.
The economy of Arlington County is greatly influenced by the area's proximity to
Washington, DC. As the nation's capital, Washington is the hub of activities
pertaining to domestic and international political affairs. The city houses the
headquarters of the legislative, judicial, and executive branches of the
government of the United States. The District of Columbia is also a
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[GRAPHIC OMITTED]
AREA MAP
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HVS International, Mineola, New York Market Area Analysis 23
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national focal point for associations, foreign embassies, students, tourists,
and industrial groups dealing with military and government employees from all 50
states. In addition to being a political and economic hub, Washington is
well-known for its institutions of higher learning and visitor and cultural
attractions.
Economic and Demographic Data
Based on fieldwork conducted in the area and our in-house sources, we have
evaluated various economic and demographic statistics to determine trends in
lodging demand. A primary source of economic and demographic statistics used in
this analysis is the Complete Economic and Demographic Data Source published by
Woods & Poole Economics, Inc., a well-regarded forecasting service based in
Washington, DC. Using a data base containing more than 300 variables for each
county in the nation, Woods & Poole employs a sophisticated regional model to
forecast economic and demographic trends. Historical statistics are based on
census data and information published by the Bureau of Economic Analysis.
Projections are formulated by Woods and Poole. All dollar amounts have been
adjusted for inflation, and thus growth or decline represents real change in
constant dollars.
Population
Although there is no direct correlation between the size of an area's population
and its specific level of visitation, historical and projected population trends
often reflect the economic climate of a locale. Moreover, we find that the rate
of population growth generally establishes a minimum rate of increase for an
area's commercial segment lodging demand. This observation also holds true for
the meeting and convention segment if a majority of the functions are
business-oriented.
According to information provided by Woods and Poole Economics, the population
of Alexandria increased at an average annual compounded rate of 0.6% between
1980 and 1995; a slightly lower growth rate of 0.4% was registered from 1990 to
1995. During both periods, there were substantially larger population gains in
the Washington MSA, Virginia, and nation as a whole. Woods and Poole projects an
average annual compounded growth rate of 1.2% in the Washington MSA between 1995
and the year 2000; this rate is higher than the 0.9% gain anticipated for the
United States and the 0.1% increase that is expected to occur in the City of
Alexandria.
Retail Sales
Trends in retail sales reflect changes in population as well as the propensity
of residents and visitors to purchase retail goods. Like population trends,
retail sales have no direct correlation with hotel room night demand,
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HVS International, Mineola, New York Market Area Analysis 24
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although they do tend to gauge the economic health and vitality of the market.
Woods and Poole Economics reports that retail sales in the City of Alexandria
increased at an average annual compounded rate of 1.3% between 1980 and 1995.
Stronger gains were registered in the Washington MSA (at 2.4%), the Commonwealth
of Virginia (at 2.5%), and the United States (at 1.9%). Retail sales growth
slowed to 1.0% annually in Alexandria from 1990 to 1995, and the MSA and the
state also registered lower increases of 2.2% and 2.3%, respectively. On a
national level, retail sales increased at an average annual compounded rate of
2.5% during that period.
Projections indicate lower growth rates in all four statistical areas. No
increase is anticipated in the City of Alexandria through the end of the decade,
and the gains anticipated in the MSA, the state, and the nation are expected to
slow to 1.2%, 1.0%, and 0.9%, respectively, from 1995 through the year 2000.
Greater retail sales activity in the Washington MSA should allow local
businesses to prosper, and greater spending means that new firms may enter the
market. This trend could ultimately result in additional visitation and some
increase in the demand for lodging facilities in the subject property's market
area.
Personal Income
Between 1980 and 1995, personal income in the City of Alexandria increased at an
average annual compounded rate of 2.3% after adjustment for inflation; this
growth rate decreased slightly, to 1.7% annually, from 1990 to 1995. These
figures are significantly lower than the 3.6% gain in the Washington MSA from
1980 to 1995 and the 2.4% annual increase registered from 1990 to 1995. Personal
income in the United States rose by 2.3% annually between 1980 and 1995 and 1.9%
annually from 1990 to 1995. Projections by Woods and Poole Economics indicate a
slower gain of 1.2% in the city. The Washington MSA is expected to continue to
register an increase of 2.4% annually from 1995 through the end of the decade,
while Virginia and the United States are projected to achieve comparable growth
rates of 2.5% and 2.3%, respectively, during the same period. These trends are
favorable and reflect some expansion of the regional economy.
Work Force Characteristics
Overall employment in the City of Alexandria increased at an average annual
compounded rate of 1.9% from 1980 to 1995. This level declined to a nominal 0.1%
between 1990 and 1995, reflecting the business atmosphere engendered by the
national recession in the early 1990s. Projections indicate that total
employment will decline at an average annual compounded
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HVS International, Mineola, New York Market Area Analysis 25
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rate of 0.2% between 1995 and the year 2000, reflecting some stagnation of the
city's economy. The only gains are expected to occur in services (at 0.3%),
state and local government (at 0.4%), agricultural services (at 1.1%),
manufacturing (at 0.6%), and mining (at 0.3%). Employment in the finance,
insurance, and real estate (FIRE) sector is expected to decrease by 0.6%
annually. We note that the unemployment rate in the Washington MSA stood at 3.8%
in February of 1996, down from 4.3% during February of the previous year.
The major employers in the subject property's market represent a cross section
of hotel demand potential. Some are national in scope, while others operate on a
more local basis; some are engaged in manufacturing, and others are involved in
public transportation and government. The following tables outline some of the
major employers in the City of Alexandria and Arlington County.
================================================================================
Table 4-1 Major Employers - City of Alexandria
- --------------------------------------------------------------------------------
No. of
Firm Employees
- ---------------------------------------------------------------
Department of Defense 8,335
City of Alexandria 2,052
Alexandria Hospital 1,800
Alexandria City Public Schools 1,764
Washington Metropolitan Area Transit Authority 1,358
Institute for Defense Analyses 800
Pentagon Federal Credit Union 800
U.S. Department of Agriculture 761
North Virginia Community College 591
Giant Food 530
Source: Alexandria Chamber of Commerce
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Table 4-2 Major Employers - Arlington County
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No. of
Firm Employees
- ---------------------------------------------------------------
Bell Atlantic Network Services, Inc. 2,900
MCI Telecommunications Corporation 2,700
USAir, Inc. 2,696
The Arlington Hospital 1,600
Marriott Corporation 1,475
Gannett Company, Inc. 1,400
The Xerox Corporation 1,354
The Hecht Company 1,300
CACI International 948
Hyatt Hotels and Resorts 749
Source: Arlington County Planning Division
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The City of Alexandria benefits from a somewhat diversified employment base
despite its reliance on the government and service sectors. Because the local
economy is not tied to the prosperity of any single sector, the overall economic
impact of typical business cycles is cushioned. Moreover, service firms are less
influenced by economic fluctuations than many other employment sectors, and thus
tend to stabilize the economy.
Office Space
One of the economic indicators that best reflect lodging demand is the trend in
occupied office space in a given area. Firms and businesses that occupy office
space generally exhibit a strong propensity to attract commercial visitation.
Although it is difficult to directly quantify lodging demand based on the amount
of occupied space, trends causing either an increase or a decrease in the amount
of occupied space may have a proportional impact on commercial hotel demand, and
a less direct effect on meeting and group demand.
Arlington County consists of two major corridors: the Rosslyn-Ballston and
Jefferson Davis. Crystal City and Pentagon City are the two sub-areas that
constitute the Jefferson Davis corridor. Overall, it is estimated that
18,000,000 square feet, or about 35%, of the office and commercial development
capacity in these corridors is undeveloped; the current office space inventory
in these corridors is approximately 35,000,000 square feet.
According to a Planning Information Report published by the Arlington County
Department of Community Planning, Housing and Development,
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HVS International, Mineola, New York Market Area Analysis 27
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the amount of office space in Crystal City increased at an average annual
compounded rate of 1.5% between 1992 and 1995. The available square footage for
Crystal City declined at a rate of 4.5% annually during the same period. The
market's high occupancy rate illustrates the strength of the office market in
Crystal City. Data for Pentagon City reveals similar strength, and sources
indicate that there is no square footage available to rent and no additional
office space was added to the supply between 1992 and 1995.
Highway Traffic
The subject property's market is served by an extensive network of highways,
subways, railways, and airports. The Metrorail is a convenient subway system
that spans the entire Washington MSA, including southern Maryland and northern
Virginia, offering 78 stations and 97 miles of track. The Metro is a popular
mode of transportation for both residents and visitors, and provides access to
virtually all parts of the District of Columbia and the surrounding areas. At
present, no major roadways are scheduled for construction in the Washington MSA;
however, there are plans to extend the Metrorail into other parts of Montgomery
and Prince Georges Counties in Maryland and Fairfax County in Virginia. This
construction is ongoing and expected to last until 2001. When completed, the
Metrorail system will have 103 track miles and 83 stations in the greater
Washington region.
Airport Traffic
Airport traffic passenger counts are important indicators of transient lodging
demand. Depending on the type and location of a particular airfield, a sizable
percentage of arriving passengers may have need for hotel and motel
accommodations. Trends showing changes in passenger counts also reflect local
business activity and the overall economic health of an area.
The Washington MSA is served by three airports: Washington National, Dulles
International, and Baltimore-Washington International (BWI). Together, these
airports serve more than 27,000,000 passengers a year and have a significant
economic impact on the region. All three airports are undergoing renovations
that began in 1995. The focus of current facility improvements is the Capital
Development Program (CDP), which will modernize the 51-year-old National Airport
and expand Dulles International. The CDP encompasses roughly 200 different
projects and is scheduled to be completed by the late 1990s. These improvements
should increase the region's economic stability by providing convenient
transportation for domestic and international travelers.
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Washington National Airport is the region's downtown airport and is the primary
facility used by guests of the subject property. The number of daily aircraft
operations at National is limited. The Metropolitan Washington Airports
Authority is committed to operating National near its current passenger level,
with only modest growth in the future. The airport sits on 860 acres surrounded
by waterways and Crystal City, and thus there is no room for expansion.
Washington National is undergoing a nearly $1 billion renovation project that is
scheduled for completion in 1997. The scope of this renovation is outlined in
the following table; this information was provided by the Metropolitan
Washington Airports Authority. At present, Washington National provides flights
to 91 cities in 38 states within a 1,250-mile radius of Washington, DC. The
facility served approximately 16,000,000 passengers in 1994 (1995 statistics had
not been finalized at the time of our fieldwork), and it is expected to remain
the area's primary airport for business and government travelers.
================================================================================
Table 4-3 Washington National Airport Capital Developments
- --------------------------------------------------------------------------------
Runway and taxiway improvements
New 35-gate terminal
Planned renovation of original terminal
Two-level terminal roadway system
New Metrorail farecard plaza
Covered moving sidewalks connecting Metro and
parking garages to the terminal
New parking garages
Rental car support facilities
Improved roadway system
Taxicab dispatch facility
New heating and cooling plant
Improved general aviation facilities
Air cargo building
Modern aviation fuel storage facility
Airport administration and maintenance facilities at the south end of the
airport
- --------------------------------------------------------------------------------
Dulles International Airport, which is located roughly 20 miles northwest of the
subject property, has a new international arrivals building, and ongoing
renovations include doubling the size of the main terminal, constructing new
midfield concourses, adding a peoplemover system, improving ground
transportation centers, and expanding the runway capacity. The expansion of the
main terminal is scheduled for completion in 1997. Upon completion of this
project, the airport will feature enhanced baggage and
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ticketing facilities, varied retail and food outlets, and wider arrival and
departure roadways. Dulles currently provides service to roughly 11,700,000
passengers, and this figure is expected to increase to 23,000,000 by the year
2000. The airport offers more than 300 domestic flights daily and non-stop and
single-plane service to 26 cities in Europe, South America, and the Far East.
Baltimore-Washington International (BWI) Airport is located roughly 35 miles
north of the subject property. Recent renovations included the completion of
Concourse F, which consists of six gates and an international arrivals area, and
the development of a new observation area with 40-foot windows and a flight
simulator. Projects that are scheduled for completion in 1997 include extending
Runway 1028 to 10,500 feet and construction of a cargo building. Soft goods are
being upgraded in the main terminal, and exterior signage is being improved.
This facility is served by 17 airlines with 72 domestic destinations and offers
international flights to 21 cities in Europe, South America, Israel, Canada, and
the Caribbean.
Leisure Travel
In 1791, the land that comprises Arlington County was designated as a part of
the nation's capital. Years later, the land was returned to the Commonwealth of
Virginia, but the area remains rich in history. The most famous Arlington
landmarks and tourist destinations are the Pentagon and Arlington National
Cemetery. Covering 583 acres, the Pentagon is the home of the United States
Department of Defense and contains 6,500,000 square feet of space, making it the
world's largest office building. Arlington National Cemetery contains the Tomb
of the Unknowns, the Challenger Space Shuttle Memorial, and the grave sites of
John F. Kennedy, Robert F. Kennedy, and some 240,000 other American heroes on
612 acres.
Washington, DC is a major destination, and the city's numerous visitor
attractions help to draw that draw leisure travelers to the entire metropolitan
area (including the subject property's market). The following table lists some
of the attractions available in Washington; other sources of leisure demand
include events at Robert F. Kennedy Stadium (home of the Washington Redskins)
and the historic shops of Old Town Alexandria.
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Table 4-4 National Capital Area Attractions
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Anderson House Museum Library of Congress
Ansel Adams Collection Lincoln Memorial
National Aquarium Marine Corps Memorial
U.S. National Arboretum Mount Vernon
National Archives Naval Observatory
U.S. Botanic Garden Navy Museum
Capitol Building Supreme Court
FBI Headquarters Vietnam Veterans Memorial
Ford's Theater Washington Monument
Holocaust Memorial Museum The Washington Post
Jefferson Memorial White House
- --------------------------------------------------------------------------------
A major new attraction, the Newseum, is scheduled to open in 1997. The
construction of this 72,000-square-foot facility began in 1994 and will be
completed at a reported cost of $32,000,000. The Newseum will be the world's
only major museum dedicated exclusively to news. It will tell the story of the
past, present, and future of news through state-of-the-art multimedia
presentations and exhibits designed to appeal to a wide array of visitors. The
Newseum will feature a News Wall as long as a city block, a theater, a
television studio, a walk through the history of news gathering, and interactive
archives. The center is funded by the Freedom Forum, the world's largest
media-oriented private foundation.
Conclusion
Our review of various economic and demographic data indicates that the subject
property's market has undergone moderate growth during the past several years,
and projections indicate that slower expansion can be anticipated in the near
future. These trends suggest moderate increases in lodging demand.
The following table summarizes the economic and demographic trends discussed
throughout this section. All figures that reflect dollar amounts have been
adjusted for inflation, and thus reflect real change. It should be noted that
the percent changes indicated in the following tables are based on unrounded
figures, and thus may not calculate exactly.
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HVS International, Mineola, New York Market Area Analysis 31
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Historical Population (+000)
City of Alexandria 1980-1995 103.6 113.6 0.6 %
Washington MSA 1980-1995 3,492.4 4,530.2 1.7
Commonwealth of Virginia 1980-1995 5,367.7 6,621.7 1.4
United States 1980-1995 227,225.6 262,791.0 1.0
Short-Term Historical Population (+000)
City of Alexandria 1990-1995 111.3 113.6 0.4
Washington MSA 1990-1995 4,237.4 4,530.2 1.3
Commonwealth of Virginia 1990-1995 6,213.7 6,621.7 1.3
United States 1990-1995 249,401.4 262,791.0 1.1
Projected Population (+000)
City of Alexandria 1995-2000 113.6 114.0 0.1
Washington MSA 1995-2000 4,530.2 4,807.5 1.2
Commonwealth of Virginia 1995-2000 6,621.7 6,964.7 1.0
United States 1995-2000 262,791.0 274,758.4 0.9
Long-Term Historical Retail Sales (+000,000)
City of Alexandria 1980-1995 1,010.8 1,234.3 1.3
Washington MSA 1980-1995 23,498.2 33,678.9 2.4
Commonwealth of Virginia 1980-1995 30,946.2 45,006.8 2.5
United States 1980-1995 1,340,768.9 1,765,826.1 1.9
Short-Term Historical Retail Sales (+000,000)
City of Alexandria 1990-1995 1,174.6 1,234.3 1.0
Washington MSA 1990-1995 30,271.1 33,678.9 2.2
Commonwealth of Virginia 1990-1995 40,138.2 45,006.8 2.3
United States 1990-1995 1,557,380.2 1,765,826.1 2.5
Projected Retail Sales (+000,000)
City of Alexandria 1995-2000 1,234.3 1,234.1 (0.0)
Washington MSA 1995-2000 33,678.9 35,721.1 1.2
Commonwealth of Virginia 1995-2000 45,006.8 47,309.5 1.0
United States 1995-2000 1,765,826.1 1,846,830.4 0.9
Long-Term Historical Retail Sales per Capita
City of Alexandria 1980-1995 9,761.3 10,867.2 0.7
Washington MSA 1980-1995 6,728.3 7,434.3 0.7
Commonwealth of Virginia 1980-1995 5,765.3 6,796.8 1.1
United States 1980-1995 5,900.6 6,719.5 0.9
Short-Term Historical Retail Sales per Capita
City of Alexandria 1990-1995 10,556.1 10,867.2 0.6
Washington MSA 1990-1995 7,143.8 7,434.3 0.8
Commonwealth of Virginia 1990-1995 6,459.6 6,796.8 1.0
United States 1990-1995 6,244.5 6,719.5 1.5
</TABLE>
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
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<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Projected Retail Sales per Capita
City of Alexandria 1995-2000 10,867.2 10,830.1 (0.1) %
Washington MSA 1995-2000 7,434.3 7,430.3 (0.0)
Commonwealth of Virginia 1995-2000 6,796.8 6,792.8 (0.0)
United States 1995-2000 6,719.5 6,721.7 0.0
Long-Term Historical Eating and Drinking Place Sales (+000,000)
City of Alexandria 1980-1995 107.3 173.4 3.2
Washington MSA 1980-1995 2,370.5 3,992.8 3.5
Commonwealth of Virginia 1980-1995 2,566.6 4,488.6 3.8
United States 1980-1995 126,131.6 185,035.4 2.6
Short-Term Historical Eating and Drinking Place Sales (+000,000)
City of Alexandria 1990-1995 159.1 173.4 1.7
Washington MSA 1990-1995 3,509.1 3,992.8 2.6
Commonwealth of Virginia 1990-1995 3,893.2 4,488.6 2.9
United States 1990-1995 161,197.4 185,035.4 2.8
Projected Eating and Drinking Place Sales (+000,000)
City of Alexandria 1995-2000 173.4 178.8 0.6
Washington MSA 1995-2000 3,992.8 4,291.0 1.5
Commonwealth of Virginia 1995-2000 4,488.6 4,859.0 1.6
United States 1995-2000 185,035.4 199,127.3 1.5
Long-Term Historical Eating and Drinking Place Sales per Capita
City of Alexandria 1980-1995 1,036.6 1,526.7 2.6
Washington MSA 1980-1995 678.7 881.4 1.8
Commonwealth of Virginia 1980-1995 478.2 677.9 2.4
United States 1980-1995 555.1 704.1 1.6
Short-Term Historical Eating and Drinking Place Sales per Capita
City of Alexandria 1990-1995 1,429.7 1,526.7 1.3
Washington MSA 1990-1995 828.1 881.4 1.3
Commonwealth of Virginia 1990-1995 626.6 677.9 1.6
United States 1990-1995 646.3 704.1 1.7
Projected Eating and Drinking Place Sales per Capita
City of Alexandria 1995-2000 1,526.7 1,569.0 0.5
Washington MSA 1995-2000 881.4 892.6 0.3
Commonwealth of Virginia 1995-2000 677.9 697.7 0.6
United States 1995-2000 704.1 724.7 0.6
Long-Term Historical Personal Income (+000,000)
City of Alexandria 1980-1995 2,285.8 3,203.7 2.3
Washington MSA 1980-1995 61,076.0 104,252.9 3.6
Commonwealth of Virginia 1980-1995 74,109.0 116,969.7 3.1
United States 1980-1995 3,163,874.0 4,443,243.2 2.3
</TABLE>
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Personal Income (+000,000)
City of Alexandria 1990-1995 2,947.9 3,203.7 1.7 %
Washington MSA 1990-1995 92,685.0 104,252.9 2.4
Commonwealth of Virginia 1990-1995 105,654.1 116,969.7 2.1
United States 1990-1995 4,051,714.6 4,443,243.2 1.9
Projected Personal Income (+000,000)
City of Alexandria 1995-2000 3,203.7 3,395.6 1.2
Washington MSA 1995-2000 104,252.9 117,297.3 2.4
Commonwealth of Virginia 1995-2000 116,969.7 132,310.6 2.5
United States 1995-2000 4,443,243.2 4,972,219.5 2.3
Long-Term Personal Income per Capita
City of Alexandria 1980-1995 22,073.0 28,206.0 1.6
Washington MSA 1980-1995 17,488.0 23,013.0 1.8
Commonwealth of Virginia 1980-1995 13,807.0 17,665.0 1.7
United States 1980-1995 13,924.0 16,908.0 1.3
Short-Term Historical Personal Income per Capita
City of Alexandria 1990-1995 26,494.0 28,206.0 1.3
Washington MSA 1990-1995 21,873.0 23,013.0 1.0
Commonwealth of Virginia 1990-1995 17,003.0 17,665.0 0.8
United States 1990-1995 16,246.0 16,908.0 0.8
Projected Personal Income per Capita
City of Alexandria 1995-2000 28,206.0 29,799.0 1.1
Washington MSA 1995-2000 23,013.0 24,399.0 1.2
Commonwealth of Virginia 1995-2000 17,665.0 18,997.0 1.5
United States 1995-2000 16,908.0 18,097.0 1.4
Long-Term Historical Employment - City of Alexandria (+000)
Farming 1980-1995 0.0 0.0 0.0
Agricultural Services 1980-1995 0.3 0.5 3.7
Mining 1980-1995 0.0 0.1 8.5
Construction 1980-1995 5.5 3.4 (3.1)
Manufacturing 1980-1995 2.5 2.9 1.0
Transportation, Communications, & Public Utilities 1980-1995 4.7 5.5 1.0
Total Trade 1980-1995 17.2 20.1 1.0
Wholesale 1980-1995 3.1 3.4 0.5
Retail 1980-1995 14.1 16.7 1.1
Finance, Insurance, & Real Estate 1980-1995 9.2 9.1 (0.0)
Services 1980-1995 23.6 45.0 4.4
Total Government 1980-1995 20.2 23.4 1.0
Federal Civilian 1980-1995 9.7 10.7 0.6
Federal Military 1980-1995 5.0 4.9 (0.1)
State & Local 1980-1995 5.5 7.8 2.3
Total 1980-1995 83.1 109.9 1.9
</TABLE>
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HVS International, Mineola, New York Market Area Analysis 34
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Table 4-5 Economic and Demographic Data for the Subject Property's Market Area
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg. Annual
Data Type Period Data Point Data Point Comp. Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Historical Employment - City of Alexandria (+000)
Farming 1990-1995 0.0 0.0 0.0 %
Agricultural Services 1990-1995 0.4 0.5 4.0
Mining 1990-1995 0.2 0.1 (23.2)
Construction 1990-1995 4.3 3.4 (4.7)
Manufacturing 1990-1995 2.9 2.9 0.3
Transportation, Communications, & Public Utilities 1990-1995 5.0 5.5 1.7
Total Trade 1990-1995 21.4 20.1 (1.3)
Wholesale 1990-1995 3.3 3.4 0.6
Retail 1990-1995 18.1 16.7 (1.6)
Finance, Insurance, & Real Estate 1990-1995 10.0 9.1 (1.8)
Services 1990-1995 41.4 45.0 1.7
Total Government 1990-1995 23.6 23.4 (0.2)
Federal Civilian 1990-1995 11.6 10.7 (1.6)
Federal Military 1990-1995 4.9 4.9 0.1
State & Local 1990-1995 7.2 7.8 1.6
Total 1990-1995 109.3 109.9 0.1
Projected Employment - City of Alexandria (+000)
Farming 1995-2000 0.0 0.0 0.0
Agricultural Services 1995-2000 0.5 0.5 1.1
Mining 1995-2000 0.1 0.1 0.3
Construction 1995-2000 3.4 3.3 (0.3)
Manufacturing 1995-2000 2.9 3.0 0.6
Transportation, Communications, & Public Utilities 1995-2000 5.5 5.3 (0.6)
Total Trade 1995-2000 20.1 19.5 (0.6)
Wholesale 1995-2000 3.4 3.1 (1.8)
Retail 1995-2000 16.7 16.4 (0.4)
Finance, Insurance, & Real Estate 1995-2000 9.1 8.9 (0.6)
Services 1995-2000 45.0 45.7 0.3
Total Government 1995-2000 23.4 22.3 (0.9)
Federal Civilian 1995-2000 10.7 9.6 (2.1)
Federal Military 1995-2000 4.9 4.8 (0.5)
State & Local 1995-2000 7.8 8.0 0.4
Total 1995-2000 109.9 108.6 (0.2)
Office Space
Available 1992-1995 2,073,000 2,000,000 (1.2)
Total 1992-1995 26,867,000 27,800,000 1.1
Airport Statistics
Washington National 1990-1994 15,805,496 15,700,825 (0.2)
Dulles International 1990-1994 10,424,444 11,690,786 2.9
Baltimore-Washington International 1990-1994 10,245,049 12,700,000 5.5
Convention Activity
Number of Conventions 1993-1995 29 18 (21.2)
Convention Room Nights 1993-1995 525,743 186,181 (40.5)
</TABLE>
Sources: Washington D.C. Convention and Visitors Association; Woods and Poole
Economics, Inc.; Arlington County Department of Community Planning, Housing,
and Development; Metropolitan Airports Authority
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HVS International, Mineola, New York Market Area Analysis 35
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In later sections of this economic study and appraisal, we will relate these
historical and projected growth trends to specific market segments based on
their propensity to reflect changes in room night demand in the subject
property's area.
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HVS International, Mineola, New York Overview of External Forces 36
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5. Overview of External Forces Affecting the U.S. Lodging Industry
Introduction
Hotel ownership is ultimately the business of creating and enhancing value. To
understand the investment potential of lodging facilities, investors must be
thoroughly aware of the many forces that can cause changes in the value of their
properties. Although some of these forces are internal (such as the layout and
design of the facilities, the quality of management, and the condition of the
property), others are external (such as the local economic environment and the
competitive nature of the market). The risk associated with hotel investment
lies largely with the external forces that are beyond the control of ownership
and contribute to the variability of future income flows.
Investors and appraisers can project financial results by evaluating the
historical impact of external forces on hotel values. Successful hotel investors
seek opportunities where the risk of external forces can be minimized, thus
reducing the uncertainty associated with income expectations.
When investors engage in due diligence prior to acquiring a lodging facility,
they are primarily interested in trends affecting a limited geographic market
area, such as a town, city, or county. A broader overview takes into account
national and international travel patterns and trends. An understanding of the
general characteristics of the United States hotel market is important because
these trends often foreshadow economic and demographic changes in smaller areas.
This section of the appraisal will present an overview of the U.S. lodging
industry by tracing many of the forces that influence hotel values. Historical
economic and demographic data, and industry statistics will be analyzed to
provide a basis for projections. Forecasts will be evaluated to determine their
reasonableness. The conclusions represent another set of criteria that hotel
investors consider in making their acquisition decisions.
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HVS International, Mineola, New York Overview of External Forces 37
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The Supply and Demand Relationship
Most business ventures are influenced by the relationship between supply and
demand. In the hotel industry, supply refers to the number of units. A unit
consists of one or more rooms and represents the smallest accommodation that can
be rented to a guest. Each unit must have a full bath and its own entrance to a
public hallway or the building exterior. Demand refers to a room night, which is
one unit that is occupied for one night. The supply and demand relationship has
a significant influence on a hotel's occupancy and/or average room rate.
Occupancy is calculated by dividing the number of rooms that are occupied for a
specific period by the total number of rooms that are available during the same
period. Average room rate is determined by dividing the total rooms revenue
achieved during a specific period by the number of rooms occupied during that
period; it also represents the weighted average of all the room rates charged
during that period. In a market where demand is increasing faster than supply,
occupancies rise and average rate growth generally exceeds inflation. When
supply is increasing faster than demand, occupancies fall and average rates
typically remain level or decline. Hotels generate revenue based on occupancy
and average rate, and thus the supply and demand relationship is an important
factor in analyzing profits and value.
Hotel occupancy levels have shown definite cycles that reflect the balance
between supply and demand. The early 1970s marked the beginning of a hotel
building boom reminiscent of the 1920s. Many factors contributed to this
expansion, but the two main elements were readily available financing and
aggressive chains that were eager to sell franchises. The new construction
during the 1970s was made possible by the enormous amount of financing generated
by all lenders, particularly real estate investment trusts (REITs). These
high-leverage finance companies were created to allow small investors to
participate in real estate mortgages and equities. The concept was quickly
accepted by Wall Street, and soon billions of dollars were available to finance
real estate projects. Many lenders became so overwhelmed with new money that
their underwriting procedures broke down and some marginal developments were
approved.
During the late 1960s and early 1970s, hotel companies actively expanded their
chains through franchising. Franchising was a source of new capital, allowing
hotel companies to grow and achieve national recognition using the franchisee's
financial investment in individual properties. Some franchisors, eager to
demonstrate sustained growth and establish a national
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HVS International, Mineola, New York Overview of External Forces 38
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presence, employed questionable marketing tactics to sell new franchises.
Salespeople were often compensated based on the number of franchises sold, so
there was little incentive to discourage developers from investing in poor
locations and overbuilt markets. Many lenders and hostelry developers were led
to believe that a national franchise would guarantee a successful operation.
The combination of readily available financing and aggressive hotel chains eager
to sell franchises resulted in overbuilding and development of many poorly
located, undercapitalized hostelries managed by inexperienced owners. The bubble
burst on the lodging industry when inflation caused construction costs and
interest rates to escalate. The 1974 energy crisis drastically reduced travel,
and the accompanying recession curtailed business trips, conferences, and
conventions.
Operators of marginal properties quickly fell behind in their mortgage payments,
and lenders were forced to foreclose. As lenders became hostelry owners, they
either organized work-out departments headed by experienced hoteliers or engaged
professional hotel management companies to assume operational responsibilities.
Sales data indicate that lenders who were looking for quick sales to remove
nonperforming hotel assets from their books had to lower their prices
substantially to attract all-cash buyers. Lenders who were willing to hold on to
foreclosed hotels and employ professional management to reposition and improve
the properties' operation were generally able to recoup their original
investments in three to five years, once the industry began to recover. However,
even lenders who repositioned their hotels had to take back favorable
purchase-money financing to sell the properties because money from other sources
was not available.
History has shown that during economic downturns, hotel values generally do not
fall in proportion to the properties' declining incomes. Sellers, and
particularly lenders who take back hotels through foreclosure, are often
unwilling to sell at substantially reduced prices. They are more likely to wait
out the downward cycle and dispose of their assets when the market begins to
rebound. Thus, appraisers can best reflect market behavior by projecting a
facility's net income to a point of recovery and applying the proper discounted
cash flow procedure over that time period.
The late 1970s was a period of relative calm for the lodging industry. Because
most lenders were recovering from the financial wounds inflicted by
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the 1975 recession, they had little interest in making hotel mortgages. New
construction was restrained, and primarily consisted of additions to existing
properties and the development of some large, downtown hotels oriented toward
the commercial and convention markets. The rebirth of center-city hostelries was
a direct result of fuel shortages and the availability of government financing
for inner-city redevelopment projects. Highway-oriented properties, on the other
hand, were adversely affected by escalating gasoline prices and decreased
automobile travel, and these lodging facilities lost some of their appeal among
investors and hotel companies.
Decreased building activity, the normal retirement of older hostelries from the
market, and an improving economy created a favorable supply and demand
relationship and record-high occupancy levels from 1979 to 1980. Average room
rates increased rapidly as operators took advantage of the excess demand to
recoup earlier losses and keep up with inflation.
After the decline in hotel development during the late 1970s, the environment
appeared suitable for a period of renewed expansion. However, the Federal
Reserve tightened the money supply in the early 1980s, sending the prime
interest rate up to double-digit levels. Most of the projects that were in the
preliminary planning stages but lacked sensible financing were put on hold.
Fiscal policy and declining energy prices eventually reduced the national
inflation rate. This caused a decline in hotel interest rates beginning in 1983,
and suddenly massive amounts of capital were available for real estate
investments. Hotel developers who had been out of the market since the mid-1970s
rushed to initiate new projects. They were aided by several major real estate
development incentives: high occupancies and escalating room rates, readily
available debt and equity financing, and unique income tax benefits designed to
stimulate the national economy out of a recession.
During the early 1980s, trends were generally favorable for new hotel
development. Although the recession caused a decline in lodging demand, many
markets showed relatively high occupancy levels. Room rates were usually able to
keep up with inflation, and the travel industry was expected to boom as a result
of a recovering economy. Franchise sellers signed up new prospects aggressively,
using product segmentation to justify the saturation of a market with a common
brand.
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Financing was readily available from the savings and loan industry. Following
deregulation, these banks were permitted to lend on commercial real estate, such
as hotels. Although savings and loans had experience in making loans on
single-family homes, few had expertise with commercial properties, and fewer
still with hotels. The result was almost identical to the real estate investment
trust fiasco the decade before: loan underwriting and administration were inept
and sometimes nonexistent, the number of loans made seemed more important than
the quality of the real estate and the integrity of the borrower, and short-term
funds were often used to finance long-term mortgages. In the early 1990s, the
industry suffered the consequences of this lending spree: most major hotel
markets became severely overbuilt and many savings and loans went out of
business.
Another factor contributing to hotel development in the 1980s was the very
favorable treatment provided by income tax regulations. By carefully structuring
hotel syndications to take advantage of all available tax benefits, investors
could virtually recoup their total cash outlay in the first year and reap
additional benefits in the future regardless of the economic success of the
underlying asset. Because there was little incentive to justify a transaction's
economics (i.e., cash flow and reversionary benefits), a number of syndicators
overpaid for hotel properties, took out usurious fees, and overloaded their
hotels with debt.
A change in the tax law in the mid-1980s eliminated many of the benefits
associated with hotels, but the overbuilding in most markets was either in
progress or had already taken place. By the end of the 1980s, the abuses of the
savings and loans had become apparent, but it was too late to reverse the
overbuilding. Between 1985 and 1990, approximately 556,000 rooms were added to
the U.S. hotel supply.
The national economy entered another recession in 1990, and this factor (coupled
with overbuilding and the Persian Gulf War in 1991) caused the national hotel
occupancy rate to bottom out at 60.9%. In some markets, hotel occupancies were
as low as 35%. This supply and demand imbalance was almost identical to the
situation in the 1970s that led to numerous hotel failures. As in the REIT days,
the number of non-performing loans reached record levels, and lenders moved to a
work-out mode of operation in order to foreclose and restructure their hotel
investments. Many of the savings and loans were taken over by the government and
their hotel assets were sold at auction.
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According to the American Council of Life Insurance, which represents major life
insurance companies, the number of delinquent hotel loans and the number of
hotel loans in foreclosure peaked in 1991. This trend is undergoing a reversal
as the U.S. lodging industry begins to recover. Loan restructuring was an
attractive alternative to foreclosure during this period, and the number of
loans in good standing with restructured terms almost doubled.
By 1993, new hotel construction had declined significantly. Lenders, trying to
get out from under problematic hotel portfolios, curtailed all real estate
lending and would not even consider hotels. The tax benefits associated with
lodging facilities had been reduced significantly, and passive investors left
the hospitality market entirely.
The slowdown in the growth of supply had a beneficial impact on occupancy
levels, which started to recover in 1992. Improved occupancies are expected to
continue through the late 1990s as increases in lodging demand outpace growth in
supply.
Beginning in 1991, many lenders and the Resolution Trust Corporation (RTC) sold
their oldest and least desirable hotels at liquidation prices. Because virtually
no third-party financing was available, most lenders were forced to take back
purchase-money mortgages at favorable terms in order to sell these properties
without suffering massive write-downs. The newer and more desirable hotels were
not put on the market, because their lenders/owners were waiting for values to
recover. This course of action significantly reduced the number of transactions
involving good-quality lodging facilities. The following table shows the volume
of hotel transactions exceeding $10,000,000 between 1990 and 1995.
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Table 5-1 Summary of Major Hotel Transactions
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Year 1990 1991 1992 1993 1994 1995
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Number of Transactions 130 54 67 52 92 104
Number of Rooms 40,543 16,427 25,187 19,935 33,503 36,951
Average Price Per Room $136,000 $91,000 $85,000 $79,000 $80,000 $83,000
Source: HVS International
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In 1991, there were only 54 major hotel sales recorded. This number increased to
67 in 1992 and declined to 52 in 1993, then rose dramatically in
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1994 and 1995. During the low-volume years, many sellers remained on the
sidelines waiting for values to increase before placing their properties on the
market. The jump in 1994 is attributable to a number of factors, including the
greater availability of mortgage funds, a return of institutional investors to
the market, and a resurgence of investor interest in lodging facilities.
The profile of typical hotel buyers has changed somewhat. During the mid-1980s,
when tax-driven syndication's were popular, many hotels were purchased by
passive investors who hired management companies to operate their properties.
These owners had little involvement in day-to-day management decisions, which
occasionally led to poor management and financial losses. Today, most buyers of
major hotels are owner-operators who bring with them both the acquisition funds
(usually from a joint venture partner) and management expertise. We also note
that real estate investment trusts (REITs) and public hotel companies (C-Corps)
are actively acquiring hotels using funds from public equity stock offerings.
The supply of new hotel rooms is expected to increase slowly during the next
several years. Lenders are beginning to return to the market, and are making
some hotel loans based on conservative criteria. Initially, mortgage funds were
available mainly to the budget and economy lodging sectors, for the purpose of
refinancing existing properties or assisting buyers in acquisitions. Now, a
number of lenders are willing to finance new construction for these small,
low-end properties. Although financing is also becoming available for the
acquisition of large, full-service hotels, very little has been allocated for
new construction. At present, active hotel lenders are not necessarily
traditional banks and insurance companies, but may include credit companies and
Wall Street securities firms.
A number of hotel owners and developers are now constructing budget and economy
hotels; a few are planning more upscale, full-service properties. Most lenders
are taking a conservative approach to new hotel loans, which should limit new
development to those projects that demonstrate true economic feasibility. As a
result, severe short-term overbuilding is unlikely.
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Room Rates
The supply and demand relationship has a direct impact on hotel occupancies and
an indirect influence on room rate growth. Between 1978 and 1995, hotel room
rates increased at an average annual compounded rate of almost 6%. Significant
rate growth was recorded during the late 1970s and early 1980s as a result of
strong occupancies (70%'s) coupled with a high monetary inflation rate (14%). In
recent years, room rate growth slowed as a result of low occupancies and a drop
in inflation.
Hotel room rates generally increase faster than the Consumer Price Index (CPI)
when occupancies are strong or moving upward. When occupancies are low or
declining, room rate growth tends to lag behind the CPI; in some cases, rates
may remain flat or actually drop. The following table compares the historical
and projected annual increase in hotel room rates in the United States to the
change in the national CPI.
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Table 5-2 Percent Change in Average Room Rates Versus CPI - U.S. Hotels
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Consumer Price
Hotel Room Rate Index Hotel
Year Percent Change Percent Change Occupancy
- ------------------------------------------------------------------
1973 4.2% 6.2% 70.2%
1974 7.6 11.0 64.0
1975 7.3 9.1 63.7
1976 8.2 5.7 65.8
1977 8.1 6.5 67.3
1978 14.0 7.7 69.2
1979 17.0 11.3 71.9
1980 15.2 13.5 70.6
1981 10.0 10.3 67.9
1982 6.5 6.2 66.7
1983 5.1 3.2 64.4
1984 6.9 4.3 64.0
1985 4.6 3.6 63.1
1986 3.2 1.9 62.5
1987 3.6 3.6 61.9
1988 3.6 4.1 62.3
1989 3.5 4.8 63.2
1990 3.0 5.4 62.4
1991 0.6 4.2 60.9
1992 1.4 3.0 62.1
1993 2.8 3.0 63.1
1994 5.2 2.6 64.7
1995 4.8 2.8 65.5
1996* 5.0 3.0 66.0
1997* 5.5 3.5 67.0
1998* 6.0 4.0 68.0
1999* 5.5 4.0 68.0
Sources: Smith Travel Research & HVS International
* Projected
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This table shows two periods when hotel room rate growth failed to keep pace
with the CPI. From 1973 to 1975, the hotel industry was suffering from
overbuilding related to real estate investment trusts, a recession, and a
downturn in travel caused by the oil embargo. The second period of slow room
rate growth occurred between 1988 and 1993, when the industry was again affected
by overbuilding and a weak economy. The table illustrates that during periods of
prosperity, room rates are a good hedge against inflation; this was true even
when the CPI increased at double-digit levels.
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The projections indicate a strong recovery of room rates as the relationship
between supply and demand becomes more favorable. Growth is expected to peak in
1998 at 6%, which is significantly higher than the projected gain in the CPI.
This may appear high, but a similar trend occurred in 1978, when room rates rose
14.0% and the CPI increased by only 7.7%.
Hotels are unique because their room rates can be adjusted at any time. Unlike
office space, where rents are typically negotiated for a five-year period, hotel
operators are free to base rates on occupancy trends. Using sophisticated yield
management programs, modern lodging facilities can ride the demand curve and
maximize room rates whenever the market permits. As a result, hotels generally
offer significant upside potential during periods of economic prosperity.
If lodging facilities can increase room rates faster than the CPI and still
maintain occupancies, bottom-line profits usually escalate. If they can raise
room rates and occupancy at the same time, profits will grow significantly. The
opposite occurs when room rates fail to keep pace with inflation. Because market
value is basically a multiple of bottom-line profits, changes caused by
fluctuations in occupancy and average rate have a direct impact on value.
Rooms Revenue per Available Room (RevPAR)
The ability of a hotel to maximize its occupancy and room rate is measured in
terms of rooms revenue per available room (RevPAR), which is the product of
occupancy and average rate. Between 1978 and 1995, RevPAR in the U.S. lodging
industry increased at an average annual compounded rate of approximately 5%. As
in the case of average rate, most of the increase occurred during the late
1970s, when occupancies escalated rapidly. The only decline in RevPAR occurred
in 1991.
Trends in Hotel Sales
HVS International constantly monitors hotel markets in order to collect
information on sales of lodging facilities. This comprehensive database is known
as the Hospitality Market Data Exchange (HMDE). The HMDE includes more than 90%
of all hotel sales that took place during this period.
The HMDE data shows that the number of transactions peaked at 726 in 1986. This
strong activity is largely attributable to pending changes in the tax laws,
which made it less favorable to own hotels. It is also possible that
forward-thinking investors noted the substantial overbuilding and declining
economy and decided to bail out at that time. In 1987 and 1990, the
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average sales price per room peaked at $75,000. This was more than twice the
1981 average of $36,000.
Following the 1990 peak, hotel prices fell rapidly as occupancies and profits
were eroded by the massive number of hotel rooms entering the market. By 1991,
the year of the Persian Gulf War, sales prices had fallen to $38,000 per room.
Even the highest price per room declined from the record $1,195,652 (for the
sale of the Bel Aire Hotel) to $251,816 in 1992. The market hit bottom in 1993
when the average sales price dropped to $36,000 per room. Prices recovered
rapidly in 1994 and 1995 as investors became interested in hotels again and more
full-service properties were put on the market. In 1995, the average sales price
was $61,000 per room.
The figures presented in the HMDE represent actual sales prices; no attempt was
made to adjust for factors such as favorable or unfavorable financing, forced or
liquidation sales, bankruptcy sales, foreclosures, and so forth. As a result,
the average price per room does not necessarily reflect market value, which
assumes a willing buyer and a willing seller. Many of the transactions that took
place during the early 1990s involved unwilling sellers - usually lenders who
were forced to liquidate hotel portfolios quickly at prices that were below
market levels. Most hotel experts agree that a recovery is underway, and they
recommend that owners hold their properties until more favorable conditions
prevail.
Trends in Hotel Values
A more meaningful indicator of trends in hotel value is the Hotel Valuation
Index (HVI), developed by HVS International. This index tracks changes in hotel
values in 23 major markets and the nation as a whole. It is developed through an
income approach, using market area data provided by Smith Travel Research and
operational and capitalization rate information from HVS International, and is
indexed to the 1986 U.S.A. value (1.0000). The following table sets forth the
HVI from 1986 to 1995.
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Table 5-3 Hotel Valuation Index per Room
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Valuation Index Per Room
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 3.3571 4.0357 4.6964 5.2857 5.3214 4.7857 4.9286 4.2857 4.3929 5.6071
New Orleans 1.5357 1.7500 2.2857 2.3929 2.5000 2.6071 3.2857 3.2500 3.8929 4.4286
New York 3.5714 4.1071 4.6429 4.5357 3.9286 3.0357 2.5714 2.5714 3.1429 4.1071
San Francisco 2.5000 3.0893 3.2500 3.0714 2.9286 2.5714 2.5714 2.9643 3.2143 4.0000
Phoenix 1.2143 1.0714 1.1786 1.5357 1.4286 1.2500 1.5000 1.9643 2.3571 3.2143
San Diego 2.8571 2.3571 2.5714 2.6786 2.3929 2.5357 2.5357 2.2143 2.3571 3.0357
Miami 1.4286 1.6071 1.7321 2.1429 2.1786 2.2500 2.5714 2.7857 2.3214 2.9286
Washington, DC 2.1786 2.1786 2.4464 2.6071 2.2500 1.8571 2.0357 2.5000 2.3929 2.8929
Atlanta 1.0714 1.0179 1.0536 1.0357 1.1429 1.1250 1.2857 1.7857 2.1429 2.6786
Minneapolis 0.7321 0.6964 0.7143 0.7143 0.7857 1.0000 1.2857 1.5714 1.8214 2.1786
Chicago 1.4643 1.5000 1.5714 1.5000 1.4286 1.2143 1.2500 1.5000 1.8571 2.1786
Boston 2.3571 2.7143 2.6071 2.1429 1.8214 1.2500 1.3036 1.3214 1.6071 2.1071
Fort Lauderdale 1.4643 1.2679 1.3214 1.4286 1.4821 1.3571 1.7143 1.8929 1.6071 1.9286
Orlando 1.5000 1.6429 1.9286 2.5000 2.5357 1.8929 2.0714 1.7857 1.6071 1.8929
Denver 0.5357 0.4464 0.4643 0.4821 0.7857 0.9268 1.0357 1.3214 1.5000 1.8571
Dallas 0.5536 0.6250 0.6607 0.7321 0.7857 0.7143 0.9643 1.0357 1.3214 1.7143
USA 1.0000 0.9464 1.0536 1.1250 1.0714 0.9214 0.9929 1.1429 1.3214 1.6071
Los Angeles 2.1071 2.2857 2.3929 2.4643 2.1786 1.5714 1.0714 0.9643 1.1964 1.5000
Tampa 0.8393 0.7679 0.8571 1.1429 1.2857 1.0357 1.0714 1.0357 1.1071 1.3214
Anaheim 1.7679 1.7321 1.7500 1.8571 1.6071 1.2857 0.9642 0.9464 0.8393 1.2500
Houston 0.3571 0.4286 0.6964 0.7857 1.1071 1.1607 1.1429 1.0357 1.0000 1.1786
Philadelphia 1.4643 1.5357 1.4286 1.3214 1.0714 0.6786 0.5714 0.6071 0.7500 1.0714
Norfolk 1.1786 1.0536 0.9286 0.7857 0.6429 0.5357 0.6071 0.6429 0.7500 0.9643
Riverside 0.9643 1.2143 1.5714 1.7143 1.4643 1.2500 0.7857 0.5357 0.4286 0.5357
</TABLE>
Source: HVS International
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The HVI can be used to show the value change in a particular market over time or
to show the relative difference in hotel values in various cities. The following
table shows the annual change in hotel values in 23 major markets and the United
States as a whole.
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Table 5-4 Percent Change in the Hotel Valuation Index
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Annual Percent Change
<TABLE>
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'86-87 '87-88 '88-'89 '89-'90 '90-'91 '91-'92 '92-'93 93-'94 '94-'95 '86-'95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Honolulu 20 % 16 % 13 % 1 % -10 % 3 % -13 % 3 % 28 % 67 %
New Orleans 14 31 5 4 4 26 -1 20 14 188
New York 15 13 -2 -13 -23 -15 0 22 31 15
San Francisco 24 5 -5 -5 -12 0 15 8 24 60
Phoenix -12 10 30 -7 -13 20 31 20 36 165
San Diego -18 9 4 -11 6 0 -13 6 29 6
Miami 12 8 24 2 3 14 8 -17 26 105
Washington, DC 0 12 7 -14 -17 10 23 -4 21 33
Atlanta -5 4 -2 10 -2 14 39 20 25 150
Minneapolis -5 3 0 10 27 29 22 16 20 198
Chicago 2 5 -5 -5 -15 3 20 24 17 49
Boston 15 -4 -18 -15 -31 4 1 22 31 -11
Fort Lauderdale -13 4 8 4 -8 26 10 -15 20 32
Orlando 10 17 30 1 -25 9 -14 -10 18 26
Denver -17 4 4 63 18 12 28 14 24 247
Dallas 13 6 11 7 -9 35 7 28 30 210
USA -5 11 7 -5 -14 8 15 16 22 61
Los Angeles 8 5 3 -12 -28 -32 -10 24 25 -29
Tampa -9 12 33 12 -19 3 -3 7 19 57
Anaheim -2 1 6 -13 -20 -25 -2 -11 49 -29
Houston 20 62 13 41 5 -2 -9 -3 18 230
Philadelphia 5 -7 -8 -19 -37 -16 6 24 43 -27
Norfolk -11 -12 -15 -18 -17 13 6 17 29 -18
Riverside 26 29 9 -15 -15 -37 -32 -20 25 -44
</TABLE>
Source: HVS International
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On a national basis, hotel values rose in 1988 and 1989, then declined in 1990
and dropped by 14% in 1991. A turnaround commenced in 1992, when values
increased by 8%; still greater increases of 15% in 1993, 16% in 1994, and 22% in
1995 signaled that a recovery was well underway. In the case of the individual
cities, it is obvious that the movement in national hotel values has been offset
somewhat by trends in local markets. Between 1986 and 1995, Riverside hotels
lost more than 40% of their value, while San Francisco showed a 60% increase.
Anaheim, Los Angeles, and Philadelphia also suffered significant drops.
Future Trends
Most hotel owners, operators and lenders agree that the U.S. lodging industry
has emerged from one of the worst periods since the Depression of 1929. Today,
there are many indications that signal a strong recovery is underway, and most
hotels have experienced a dramatic rise in profitability. Conversely, the hotel
industry remains cyclical, and there are long-term trends and risk factors that
could have an unfavorable impact on the operating results and investment
potential of lodging facilities. The following
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list summarizes the positive and negative factors that are likely to influence
the U.S. lodging industry in coming years.
o No significant amount of new hotel development is likely to occur during
the next three to five years. Lenders stopped financing new hotels in the
early 1990s because of the high rate of loan defaults, and they are only
now starting to make construction loans. Although mortgage funds are
available to refinance existing properties and construction loans are
being made for economy hotels, mortgages for new hotels in the mid-rate,
first-class, and luxury categories are still difficult to secure. This
lack of financing is major barrier to entry, and will prevent a number of
proposed projects from moving forward. With only a slow increase in
supply, hotel occupancies should rebound as fast as the growth in demand
permits.
o An additional barrier to entry is the current discrepancy between market
values and replacement costs for first-class and luxury hotels. In today's
market, many upscale hotels are still selling for prices that are below
what it would cost to develop a comparable hotel. As a result, there is
little justification for building a new hotel when a similar, existing
facility is available for sale at some fraction of the cost. Until the gap
between market value and replacement cost narrows, there will be minimal
new hotel construction in the upper-tier segments. The market values and
replacement costs of budget and economy hotels have been in equilibrium
for several years which is another reason why new development is
proceeding in these segments.
o The U.S. economy continues to improve, which suggests that more people are
traveling. Many people curtailed their travel plans during the recent
recession, and there is likely to be pent-up demand that will be released
as consumer confidence escalates.
o Minimal additions to the hotel supply coupled with growth in demand should
result in further improvement in occupancies during the next several
years.
o As shown by the historical data, hotel room rates rise rapidly as
occupancies escalate. The most frequent complaint that owners and
operators had during the recent recession was their inability to achieve
average rate gains. Starting in 1994, gains in hotel room rates returned
to levels in excess of inflation, foreshadowing enhanced profitability. In
real dollars, hotel room rates are expected to return to 1988 levels by
1998. This
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is a good indication that hotel values will return to record levels in the next
two to four years.
o The low cost of capital is another factor that tends to enhance value.
Because capitalization rates are tied directly to the price of capital,
the lower the cost, the lower the cap rate and the higher the value. The
cost of hotel debt capital averaged 10.5% in 1990. Today, similar
financing is available at 8.5% to 9.5%. Recent hotel sales support the
downward trend in capitalization rates.
o Government regulations are becoming increasingly expensive for the U.S.
hotel industry. A national health care policy could force small operators
to provide better benefits for many more employees, particularly the
part-time workers who are used extensively by hotels and restaurants.
Environmental laws are becoming stricter and will require hotels to
implement recycling, reuse, and conservation procedures. Congress has
limited deductions for meals and entertainment expenses, which increases
the cost of doing business in hotels and restaurants. Local municipalities
use hotel rooms taxes as a source of revenue for general use, and the
hotel rooms tax is so high in some areas that it has driven away demand.
This is particularly true with respect to meetings and conventions, which
can be held in cities that tax accommodations at a lower rate.
o Improved technology is rapidly changing the way business is conducted.
During the next decade, advances such as video communication, enhanced
data transfer, and faster transportation are expected to limit the need
for face-to-face meetings and shorten the time that executives are away
from their offices. Commercial hotels are bound to be influenced by this
trend.
Conclusion
Interest in hotel acquisition has increased significantly during the past
several years. Buyers have concluded that future earnings trends are likely to
be favorable, and the risks posed by overbuilding or an economic downturn are
small. Some sellers are holding their properties until prices reach a higher
level. Consequently, we believe there is pent-up desire to sell once prices
begin to approach levels that allow the existing (or restructured) debt to be
paid off.
The fact that numerous buyers are chasing very few acquisition opportunities has
had a favorable impact on recent sales prices. For buyers to be successful in
this highly competitive market, their projected operating results
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must take into account at least a portion of any upside created from improved
performance, particularly if the improvement can be readily achieved through
management efficiencies. Capitalization rates based on historical operating
income have fallen during the past several years. Hotel buyers in today's market
must be aggressive in all of their acquisition assumptions. As a result, hotel
values in some parts of the country are approaching the levels registered during
the mid-1980s, and a full recovery is expected to occur in the next two to four
years.
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6. Lodging Market Supply and Demand Analysis
MARKET FOR TRANSIENT ACCOMMODATIONS
The market for transient accommodations is an all-encompassing term referring to
the many types of travelers who use lodging facilities in a given area. These
travelers represent the market's accommodated room night demand. This section
will begin with an analysis of historical demand trends to determine what
changes have occurred; the historical number of competitive hotel rooms will
then be estimated to evaluate local supply trends. Areawide occupancy levels can
be calculated based on the number of hotel rooms available in the market and the
demand for lodging accommodations. The total hotel room night demand will be
divided into individual market segments to allow us to forecast growth rates
based on the economic and demographic data set forth earlier in this report.
Historical Supply and Demand Data
Smith Travel Research (STR) has compiled historical supply and demand data for
the subject property and its competitors. This information is presented in the
following table, along with the marketwide occupancy, average rate, and rooms
revenue per available room (RevPAR). RevPAR is calculated by multiplying
occupancy by average rate, and provides an indication of how well rooms revenue
is being maximized.
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Table 6-1 Historical Supply and Demand Trends (STR)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Rooms 3,161 3,389 3,433 3,433 3,433 3,433 3,433
Annual Guestroom Supply 1,153,765 1,236,997 1,253,045 1,253,045 1,253,045 1,253,045 1,253,045
Percent Change -- 7.2% 1.3% 0.0% 0.0% 0.0% 0.0%
Room Night Demand 838,821 830,993 816,507 813,045 844,602 865,872 861,062
Percent Change -- (0.9)% (1.7)% (0.4)% 3.9% 2.5% (0.6)%
Occupancy 72.7% 67.2% 65.2% 64.9% 67.4% 69.1% 68.7%
Percent Change -- (7.6)% (3.0)% (0.4)% 3.9% 2.5% (0.6)%
Average Rate $68.93 $70.98 $71.55 $72.99 $74.14 $77.13 $79.76
Percent Change -- 3.0% 0.8% 2.0% 1.6% 4.0% 3.4%
RevPAR $50.11 $47.68 $46.62 $47.36 $49.97 $53.30 $54.81
Percent Change -- (4.9)% (2.2)% 1.6% 5.5% 6.7% 2.8%
</TABLE>
Year-to-Date September Avg. Annual
------------------------ Comp. Change,
1995 1996 1989-95
- ---------------------------------------------------------------------
Number of Rooms 3,433 3,433
Annual Guestroom Supply 937,209 937,209
Percent Change -- 0.0% 1.4%
Room Night Demand 673,125 643,084
Percent Change -- (4.5)% 0.4%
Occupancy 71.8% 68.6%
Percent Change -- (4.5)% (0.9)%
Average Rate $79.64 $82.14
Percent Change -- 3.1% 2.5%
RevPAR $57.20 $56.36
Percent Change -- (1.5)% 1.5%
Note: Additions to supply in 1990 and 1991 represent the opening of the 272-room
Courtyard by Marriott in Crystal City
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It is important to note some limitations of the STR data. Hotels are
occasionally added to or removed from the sample, and not every property reports
data in a consistent and timely manner; these factors can influence the overall
quality of the information by skewing the results. These inconsistencies may
also cause the STR data to differ from the results of our competitive survey.
Nonetheless, we find that hotel buyers often rely on STR statistics, and thus
they are considered relevant to this study.
Supply remained relatively stable from 1989 to 1996, with the exception of the
opening of the 272-room Courtyard by Marriott in March of 1990. Because the
hotel did not open at the beginning of a calendar year, the STR survey phases
its room count into the supply in 1990 and 1991, resulting in supply increases
of 7.2% and 1.3% in those years. Demand fluctuated somewhat during the
historical period; there were slight declines (of 0.9% in 1990, 1.7% in 1991,
and 0.4% in 1992, which were followed by moderate increases of 3.9% in 1993 and
2.5% in 1994. The decrease from 1990 through 1992 reflects the national
recession and the Persian Gulf War, which both causes a downturn in travel
throughout the country. As the economy improved in 1993 and 1994, demand growth
resumed. However, demand declined again (by 0.6%) in 1995, and year-to-date
September figures show a 4.5% drop from 1995 to 1996. These decreases are
largely the result of two relatively unusual factors: the severe winter in
1995/96 and the government shut-down that occurred in early 1996. We also note
that moderate government downsizing has had an impact on demand. Overall, room
night demand rose at a minimal average annual compounded rate of 0.4% between
1989 and 1995, reflecting the long-term stabilization of the market.
Occupancy fluctuations mirrored changes in demand except in 1990 and 1991, when
there was slight supply-side dilution resulting from the opening of the
Courtyard by Marriott. In those years, occupancy declined more significantly
than demand, falling by 7.6% and 3.0%. These decreases resulted in overall
marketwide occupancy levels of 67.2% in 1990 and 65.2% in 1991. The market has
yet to regain the above-70% occupancy levels that were apparent in the late
1980s.
Marketwide average rates increased at moderate rates ranging from 0.8% to 4.0%
from 1989 to 1995, and outpaced occupancy and demand gains. Year-to-date
September statistics indicate that rates continued to rise, with a 3.1% gain
registered from 1995 to 1996. Overall, average rate increased at an average
annual compounded rate of 2.5% between 1989 and 1995. By virtue of the
consistent rate increases, the market's 1995 average rate and RevPAR
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levels of $79.76 and $54.81 are the highest achieved during the historical
period.
Like average rate, marketwide RevPAR increased at a moderately from 1989 to
1995, at an average annual compounded rate of 1.5%. The largest gains of 5.5%
and 6.7% were achieved in 1993 and 1994, respectively. Year-to-date September
data show a 1.5% decline, from $57.20 in 1995 to $56.36 in 1996. The overall
stability of RevPAR levels again underscores the maturity of the local lodging
market; however, we do note that both average rate and RevPAR growth were lower
than the prevailing inflation rate on an average annual compounded basis.
Demand Analysis Using Market Segmentation
For the purpose of demand analysis, the overall market is divided into
individual segments based on the nature of travel. Although a market may have
various segments, the three primary classifications occurring in most areas are
commercial, meeting and group, and leisure.
Market segmentation is a useful procedure because individual classifications
often exhibit unique characteristics in terms of growth potential, seasonality
of demand, average length of stay, double occupancy, facility requirements,
price sensitivity, and so forth. By quantifying the room night demand by market
segment and analyzing the characteristics of each segment, the overall demand
for transient accommodations can be projected. Lodging demand in the subject
property's market is generated primarily by the following four market segments.
Segment 1 Commercial
Segment 2 Meeting and Group
Segment 3 Leisure
Segment 4 Government
Based on our fieldwork, area analysis, and knowledge of the local lodging
market, we estimate the year-end 1996 distribution of accommodated hotel room
night demand as follows.
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Table 6-2 Estimated Year-End 1996 Accommodated Room Night Demand
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Marketwide Subject Property
-------------------------- ----------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 71,000 13% 12,000 28%
Meeting and Group 161,000 29 23,000 53
Leisure 155,000 28 5,000 12
Government 163,000 30 3,000 7
- --------------------------------------------------------------------------------
Total 551,000 100% 43,000 100%
- --------------------------------------------------------------------------------
As illustrated by the preceding table, government demand predominates in the
market, contributing 30% of the estimated year-end 1996 room night demand.
Meeting and group demand followed with a 29% share, leisure travelers accounted
for 28%, and commercial guests constituted the smallest segment, at 13%.
The subject property's demand segmentation differs from that of the competitive
market to some degree. Approximately 53% of the Ramada's occupancy is derived
from meetings and groups, reflecting the large volume of tour and travel
business that the hotel accommodates. Lower-end commercial business contribute
another 28%, and leisure travelers comprise 12% of the total. The government
segment produces only 7% of the subject property's occupancy. Using the
distribution of accommodated hotel demand as a starting point, we will analyze
the characteristics of each market segment in an effort to determine future
trends in room night demand.
Commercial Segment
The commercial segment consists of businesspeople who are visiting various firms
in the subject property's market. For the most part, business travelers are not
particularly rate-sensitive, and they often use a hotel's food and beverage
outlets and recreational facilities. Washington, DC, which is situated only six
miles northeast of the Ramada, is a major national and international center for
financial, commercial, and political activity.
Commercial demand is strongest Monday through Thursday nights, declines
significantly on Friday and Saturday, and increases somewhat on Sunday. The
typical length of stay ranges from one to three days, and the rate of double
occupancy is a low 1.2 to 1.3 people per room. Commercial demand is relatively
constant throughout the year, although some declines
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are noticeable in late December and during other holiday periods. In general,
the commercial segment represents a highly desirable and lucrative market that
provides a consistent level of demand at relatively high room rates.
According to local hotel operators, the year following a presidential election
year is usually strong, particularly if there is a change in administration; for
this reason, we project a 1.0% increase in commercial demand in 1997, slowing to
a growth rate of 0.5% annually in subsequent years.
Meeting and Group Segment
The meeting and group market includes meetings, seminars, trade association
shows, and similar gatherings of ten or more people. Peak convention demand
typically occurs in the spring and fall. Because of vacations, the summer months
represent the slowest period for this market segment; winter demand varies. The
average length of stay for typical meetings and groups ranges from three to five
days. Most groups meet during the weekday period of Monday through Thursday, but
associations and social groups will sometimes gather on weekends. Business
groups tend to have a low double occupancy of 1.3 to 1.5 people per room, while
social groups are likely to have double occupancy rates ranging from 1.5 to 1.9.
Meeting and group patronage is generally quite profitable for hotels. Although
room rates are discounted for large groups, the property benefits from the use
of meeting space and revenues generated by in-house banquets and cocktail
receptions. Facilities that are necessary to attract meetings and groups include
function areas with adequate space for breakout, meals, and receptions;
recreational amenities; and a sufficient number of guestrooms to house the
attendees.
Future meeting and group demand is closely related to growth in the commercial
segment. Because most meetings have either a direct or an indirect business
purpose, the economic considerations that have an impact on commercial travel
also affect meeting and group demand. The exception is non-commercial meetings,
which are tied to the economic factors that influence leisure travel. It should
be noted that meetings and group demand is booked in advance, and thus growth in
this segment tends to lag slightly behind increases in commercial demand.
Most of the meeting and group demand in the subject property's area is generated
by associations. Alexandria is the nation's fourth-largest center for trade and
professional associations, outranked only by Washington,
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New York, and Chicago. The city is home to nearly 300 national trade and
professional associations, more than the State of Maryland and more than all of
the other communities in Virginia combined. Nearby Washington, DC houses the
headquarters of more than 2,000 trade and professional associations. There are
also numerous labor organizations, institutions, and non-profit foundations
operating in the market area, and all of them hold meetings, seminars, and
receptions on a regular basis. Many have employee or social clubs that often
book repeat business at hotels that have hosted one of their meetings.
The Washington, DC Convention Center plays a major role in attracting group
business to the area; however, the center's relatively small size has
discouraged a considerable amount of association and convention business. We
also note that the significant number of hotels available in the District of
Columbia limits the influence of the convention center on the subject property's
market. Hotels in downtown Washington tend to fill first during citywide
conventions, and outlying properties such as the Ramada receive only a limited
amount of overflow. It should be noted that activities related to the elections
and inaugurals in 1997 should result in a short-term increase in meeting and
group business.
Tour and travel business is an important component of the meeting and group
demand accommodated by the subject property. Elementary and high school groups
such as American Student Travel and Lakeland Tours consistently contribute a
significant portion of the subject property's overall demand. Management
representatives indicate that a major effort is underway to reposition the
property toward the government segment at the expense of tour and travel demand
(and, to a lesser extent, airline demand); traditionally, the Ramada has lagged
the market in terms of the amount of high-rated government demand it captures
and led the market in the low-rated tour and travel segment. This has placed
downward pressure on the hotel's overall average rate. Based on the economic and
demographic data summarized earlier in this report, we estimate that meeting and
group demand in the subject property's market will increase by 1.0% in 1997 and
by 0.5% annually thereafter.
Leisure Segment
The leisure market segment consists of individuals and families who are spending
time in the area or passing through en route to other destinations. Their travel
purposes may include sightseeing, recreation, visiting friends and relatives, or
numerous other non-business activities. Leisure demand is strongest Friday and
Saturday nights and all week during holiday periods
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and the summer months. These peak periods are negatively correlated with
commercial visitation, underscoring the stabilizing effect of capturing weekend
and summer tourist travel. The typical length of stay ranges from one to four
days, depending on the destination and travel purpose, and the rate of double
occupancy generally ranges from 1.8 to 2.5 people per room.
Leisure travelers tend to be the most price-sensitive segment of the lodging
market, because their trips are funded by discretionary income. They often
prefer low-rise accommodations where parking is convenient to the rooms, and
they typically demand extensive recreational facilities and amenities. Ease of
highway access and proximity to tourist attractions are important locational
considerations.
In the subject property's area, leisure demand is generated by the multitude of
museums, monuments, historical sites, government offices, cultural activities,
and educational institutions greater Washington metropolitan area. This demand
may consist of individuals, families, tour groups, or international travelers
who stay overnight while on vacation, traveling through, or visiting friends and
relatives. Because of the nature of this travel, leisure demand is strongest
during the summer and on spring and fall weekends. We believe that the subject
property's proximity to the nation's capital and historic Old Town Alexandria
will continue to ensure a base level of leisure-oriented visitation.
Future leisure demand is related to the overall economic health of the nation.
Trends showing changes in state and regional unemployment and disposable
personal income often have a strong impact on non-commercial visitation. Traffic
counts on nearby highways and attendance at local attractions can also form a
basis for projections. We forecast leisure demand to increase by 1.0% in 1997
and by 0.5% annually throughout the remainder of the projection period.
Government
By virtue of its proximity to the Pentagon and several government-occupied
office buildings, there is a significant amount of government demand in the
subject property's immediate market. Contractors visiting the Pentagon represent
a significant portion of these travelers. The government market segment shows
little seasonality (except during election years) and it is similar to the
commercial segment in terms of average length of stay and double occupancy.
Government demand provides a consistent level of demand even during economic
downturns, and is most prevalent in state capitals or near firms and businesses
that do a substantial amount of
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government contract work. As noted earlier, the subject property's management
representatives are working to increase the amount of government demand
accommodated by the Ramada, thus displacing tour and travel business and some
airline patronage.
Based on the economic and demographic data summarized earlier, we estimate that
government-oriented hotel demand in the subject property's market rose at rates
of 3% to 5% per year during the 1980s. With the recent slowdown in federal
government growth, there has also been a reduction in government hotel demand.
Because the year following a presidential election tends to be strong, we
project government demand to increase by 1.0% in 1997 and 0.5% annually in
subsequent years.
Growth Rates
The purpose of segmenting the lodging market is to define each major type of
demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, four segments were defined as
representing the subject property's lodging market. Various types of economic
and demographic data were then evaluated to determine their propensity to
reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market segment growth rates.
================================================================================
Table 6-3 Average Annual Compounded Market Segment Growth Rates
- --------------------------------------------------------------------------------
1997 Thereafter
- -----------------------------------------------------------------
Commercial 1.0% 0.5%
Meeting and Group 1.0 0.5
Leisure 1.0 0.5
Government 1.0 0.5
Overall Annual Growth 1.0% 0.5%
- --------------------------------------------------------------------------------
These growth rates will be used in subsequent sections of this study to forecast
changes in lodging demand.
COMPETITION
An integral component of the supply and demand relationship that has a direct
impact on the availability of lodging demand is the current and anticipated
supply of competitive lodging facilities. Numerous hotels and motels are
situated throughout the greater Washington, DC metropolitan area. The subject
property is located in the Alexandria/Arlington market (which includes the
hotels surrounding National Airport), which is situated
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roughly three to six miles south of Washington, DC. Other concentrations of
lodging facilities are located in downtown Washington, near Dulles International
Airport, and in Tysons Corner, Virginia (northwest of the Ramada).
We have identified six properties that are considered primarily competitive with
the Ramada Plaza Pentagon. Including the subject property, these primary
competitors total 1,634 rooms. Four additional lodging facilities are judged to
be only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primarily
competitive supply, they do compete with the subject property to some extent.
The room count of each secondary competitor has been weighted to reflect the
degree to which it competes with the Ramada Plaza Pentagon; the aggregate
weighted room count of the secondary competitors is 642.
Primary Competitors
The following table summarizes the important operating characteristics of the
primary competitors and the aggregate secondary competitors. This information
was compiled from personal interviews, inspections, lodging directories, and our
in-house library of operating data. The table also sets forth each property's
penetration factors; penetration is the ratio between a specific hotel's
operating results and the corresponding data for the market. If the penetration
factor is greater than 100%, the property is performing better than the market
as a whole; conversely, if the penetration is less than 100%, the hotel is
performing at a level below the marketwide average.
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Table 6-4 Primary Competitors and Aggregate Secondary Competitors
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<TABLE>
<CAPTION>
Square Footage Estimated 1996
---------------------- Market Segmentation
Meeting -------------------------
Year No. of Meeting Space Mtg. &
Property/Location Opened Rooms Space per Room Comm. Group Leisure Govt.
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ramada Plaza Pentagon
4641 Kenmore Ave. 1975 193 6,344 33 28 % 55 % 11 % 6 %
Holiday Inn - Eisenhower
2460 Eisenhower Ave. 1970 201 3,300 16 15 40 25 20
Best Western Arlington Inn & Tower
2480 S. Glebe Rd. 1967 326 5,200 16 5 35 35 25
Hampton Inn
4800 Leesburg Pike 1987 130 350 3 15 5 45 35
Ramada Plaza Old Town
901 N. Fairfax St. 1974 258 10,250 40 5 40 20 35
Days Inn - Crystal City
2000 Jefferson Davis Hwy. 1965 247 5,800 23 15 20 35 30
Howard Johnson - National Airport
2650 Jefferson Davis Hwy. 1973 279 5,700 20 10 20 35 35
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Sub-Totals and Averages 1,634 5,278 22 12 % 31 % 30 % 27 %
Secondary Competitors 14 25 25 36
- ---------------------------------------------------------------------------------------------------------------------
Totals and Averages 13 % 29 % 28 % 30 %
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
Estimated 1995 Estimated 1996
--------------------------- --------------------------------------------------------------
Average Average Occupancy Yield
Property/Location Occ. Rate RevPAR Occ. Rate RevPAR Penetration Penetration
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ramada Plaza Pentagon
4641 Kenmore Ave. 59.3 % $61.29 $36.34 60.0 % $66.00 $39.60 90.5 % 76.5 %
Holiday Inn - Eisenhower
2460 Eisenhower Ave. 78.0 72.00 56.16 76.0 69.00 52.44 114.6 101.2
Best Western Arlington Inn & Tower
2480 S. Glebe Rd. 58.0 58.00 33.64 58.0 57.00 33.06 87.5 63.8
Hampton Inn
4800 Leesburg Pike 81.0 79.00 63.99 79.0 80.00 63.20 119.2 122.0
Ramada Plaza Old Town
901 N. Fairfax St. 68.0 86.00 58.48 65.0 88.00 57.20 98.1 110.4
Days Inn - Crystal City
2000 Jefferson Davis Hwy. 67.0 80.00 53.60 69.0 83.00 57.27 104.1 110.6
Howard Johnson - National Airport
2650 Jefferson Davis Hwy. 70.0 65.00 45.50 65.0 72.00 46.80 98.1 90.4
- -----------------------------------------------------------------------------------------------------------------------------------
67.4 % $71.34 $48.11 66.1 % $73.29 $48.43 99.7 % 93.5 %
69.0 86.71 59.83 67.0 90.35 60.53 101.1 116.9
- -----------------------------------------------------------------------------------------------------------------------------------
68.0 % $75.77 $51.52 66.3 % $78.14 $51.80 100.0 % 100.0 %
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</TABLE>
<PAGE>
[GRAPHIC OMITTED]
COMPETITION MAP
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Our survey of the primary competitive hotels shows a representation of
nationally recognized, franchised lodging chains controlling 1,634 rooms in the
area. The size of these properties ranges from 130 to 326 rooms, and their
average age is roughly 23 years. We estimate the year-end 1996 market
segmentation of the primary competitors at 31% meeting and group, 30% leisure,
27% government, and 12% commercial.
We estimate the year-end 1996 occupancy and average rate of the primary
competitors at 66.1% and $73.29, yielding RevPAR of $48.43. The Hampton Inn
maintains the highest occupancy in the market (at 79.0%), followed by the
Holiday Inn - Eisenhower (at 76.0%). The 1996 occupancies of the Ramada Plaza
Old Town, the Days Inn - Crystal City, and the Howard Johnson - National Airport
are estimated at 65%, 69%, and 65%, respectively, while the subject property and
the Best Western maintain levels of 60% and below. The Ramada Plaza Old Town and
the Days Inn achieve the highest rates (estimated at $88 and $83, respectively,
as of year-end 1996), while the subject property's estimated rate of $66 is the
second-lowest (surpassing only that of the Best Western). The Ramada Plaza
Pentagon's estimated year-end 1996 RevPAR of $39.65 is well below the average of
$48.43 set by the primary competitors. Each primary competitor was inspected and
evaluated, and descriptions of our findings are presented below.
Holiday Inn - Eisenhower
The 201-room Holiday Inn - Eisenhower is located southeast of the subject
property and just south of downtown Alexandria, adjacent to the Eisenhower
Avenue Metro stop. This hotel, which opened in 1970, features the Eisenhower
Station Restaurant, which offers American cuisine for breakfast, lunch, and
dinner. The Eisenhower Station Lounge offers a lighter menu and nightly
entertainment. The Holiday Inn is owned and operated by Hoffman Enterprises,
which is based in Alexandria.
Meeting space consists of one 3,300-square-foot room that can seat 250 people;
this facility can be divided into smaller sections. An extensive renovation of
the entire hotel was completed in 1992; according to management representatives,
this upgrading was needed to allow the Holiday Inn to remain competitive in the
market. At present, the hotel is undergoing a cosmetic refurbishment.
Amenities available at this property include complimentary in-room coffee and
non-smoking rooms; units are equipped with an iron, a hair dryer, and a
remote-control color television with cable. Recreational facilities consist of
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an indoor swimming pool and an exercise room. Complimentary shuttle service is
provided to and from Washington National Airport and Old Town Alexandria, and
all parking is free. Given its relatively proximate location and similarity in
terms of physical facilities, we believe that the Holiday Inn - Eisenhower will
continue to compete with the Ramada Plaza.
Best Western Arlington Inn & Tower
The 326-room Best Western Arlington Inn & Tower is situated roughly one and
three-quarter miles northeast of the subject property, at the intersection of
I-395 and Glebe Road. This location is roughly two miles south of the Pentagon.
Guestrooms are housed in a two-story structure (205 units) and in a seven-story
tower that was added ten year ago (121 units). The Best Western, which opened in
1967, is operated by Bernstein Companies and is privately owned.
Although the Best Western's public space and guestrooms are in need of
renovation, there were only tentative refurbishment plans at the time of our
fieldwork. The hotel's poor condition of the property explains its poor
occupancy and average rate performance in comparison to that of its primary
competitors. Food and beverage service is provided by a restaurant and lounge
that serves a variety of American fare for breakfast, lunch, and dinner.
Meeting space at the Best Western totals approximately 5,200 square feet, which
is comparable to the inventory available at the subject property. The hotel
offers nine conference rooms, the largest of which accommodates 200 guests.
Amenities include climate-controlled guestrooms equipped with telephones,
radios, and remote-control color television with cable. Additional facilities
include an outdoor swimming pool, a gift shop, a game room, and an exercise
room. Complimentary shuttle service is offered to and from Washington National
Airport, the Metro station at the Pentagon, Crystal City, and the Pentagon City
Mall.
As a result of this property's poor condition, high sales staff turnover, and
poor reputation, the Ramada Plaza is expected to continue to outperform the Best
Western in the future, particularly given the subject property's recent
renovation and ongoing efforts to reposition the hotel in the market.
Hampton Inn
The 103-unit Hampton Inn is located along Leesburg Pike, west of I-395 and
approximately one mile north of the subject property. This limited-service
hotel, which opened in April of 1987, does not offer the scope of facilities and
amenities available at most of the primary competitors. In addition to
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guestrooms, facilities include one meeting room, a small lobby seating area, an
exercise room, and an outdoor swimming pool; a complimentary continental
breakfast is offered to all guests. At the time of our inspection, guestrooms
appeared to be in good condition. The Hampton Inn is owned and operated by
Brantley Enterprises, which is based in Fairfax County.
A major renovation of the hotel is scheduled to commence in November of 1996,
immediately following the presidential election. Guestrooms will receive new
soft goods, bathrooms will be retiled, and new soft goods will be installed in
the lobby seating area. There have also been discussions regarding the
possibility of converting the hotel's single meeting room into a king suite with
a Murphy bed. Management representatives hope that the upcoming refurbishment
will help to solidify the Hampton Inn's role as the occupancy leader among the
primary competitors.
This property derives a majority of its occupancy from leisure travelers and the
government segment, largely as a result of its favorable location near a
plethora of retail outlets, restaurants, mini-malls, and the Skyline complex
(which features a large health club, numerous office buildings, and one of the
largest malls in the area). The Hampton Inn competes with the subject property
on the basis of its location, brand name identification, and strong reservation
system. We estimate the Hampton Inn's year-end 1996 occupancy and average rate
at 79% and $80, yielding RevPAR of $63.20 (the highest level among the primary
competitors).
Ramada Plaza Old Town
The Ramada Plaza Old Town is located approximately three and one-half miles east
of the subject property, at the intersection of North Fairfax Street and Canal
Center Plaza. The 12-story property was constructed in 1974 and is privately
owned and operated. In addition to 258 guest units, the Ramada Plaza Old Town
offers a restaurant, a lounge, a gift shop, a rooftop swimming pool, and roundly
10,250 square feet of meeting space, including an executive boardroom. Some
guestrooms also provide attractive river views. Management representatives
report that a significant renovation of virtually all areas of the hotel was
completed in 1994; our inspection revealed that the public areas and guestrooms
were in moderately good condition.
Although the Ramada Plaza Old Town caters to those leisure travelers who are
primarily interested in visiting the historic sites in Old Town Alexandria
(whereas the subject property tends to appeal to those destined for Washington,
DC) the two hotels compete as a result of their shared chain
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affiliation and resultant competition for demand generated by the central
reservation system. This hotel derives a majority of its demand from the meeting
and group segment, primarily as a result of its large inventory of function
space. We estimate the year-end 1996 average rate of this hotel at $88, which is
the highest among the primary competitors.
Days Inn - Crystal City
The 247-room Days Inn is located just west of National Airport in the immediate
vicinity of the Howard Johnson and the Courtyard by Marriott, approximately
three and one-half miles northeast of the subject property. In addition to
guestrooms, the Days Inn offers a restaurant, a lounge, a rooftop swimming pool,
a gift shop, and approximately 5,800 square feet of meeting space.
Generally, the Days Inn has been well maintained, and the facilities appear to
be in average condition. The last major renovation occurred in 1993, and
included the replacement of guestroom soft goods and a complete upgrade of all
public areas. This is the oldest of the primary competitors, having opened in
1965, but because most of the hotels are older properties, we do not believe
that this is a significant disadvantage.
Despite its relatively distant location, the Days Inn competes with the subject
property as a result of its rate structure, services, amenities, and market
orientation. The property derives a majority of its room night demand from the
leisure segment. The Days Inn affiliation is comparable to those of the other
HFS-affiliated properties in the competitive set (the two Ramadas and the Howard
Johnson) in that it is highly recognizable but it is generally not associated
with first-class hotels. Nonetheless, this property's estimated year-end 1996
average rate of $83 is the second-highest among the primary competitors.
Howard Johnson - National Airport
The 279-room Howard Johnson is the second-largest of the primary competitors,
and is owned and operated by the B.F. Saul Company. As noted earlier, Howard
Johnson is a member of the HFS family, and is well recognized in the industry by
virtue of its longevity. This hotel is located on Jefferson Davis Highway,
approximately three and one-half miles northeast of the subject property and in
close proximity to the Days Inn and the Courtyard by Marriott.
In addition to guestrooms, the Howard Johnson contains a leased restaurant and
approximately 5,700 square feet of meeting space. Other amenities include an
executive level, hospitality suites, in-room coffeemakers, an
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exercise room, a gift shop, in-room voice mail, and an outdoor swimming pool. It
should be noted that this property reportedly charges guests a daily fee for
parking, which is considered a slight disadvantage because free parking is
available at the other primary competitors.
Despite its somewhat distant location, the Howard Johnson competes with the
Ramada Plaza as a result of its rate structure, services, amenities, and market
orientation. The property was in average condition at the time of our fieldwork.
The last renovation took place in 1995, and involved recarpeting the public
areas, upgrading the bathrooms, and the addition of several amenities. The
Howard Johnson derives a majority of its occupancy from the leisure segment and
government travelers. Although its 1995 average rate was the third-lowest among
the primary competitors, it is estimated to have achieved an impressive rate
gain of $7 in 1996 (to reach $72), thus surpassing the Holiday Inn - Eisenhower.
Secondary Competitors
The 495-room Radisson Plaza Hotel at Mark Center is a large, well-maintained
property that features an attractive glass guestroom tower. It is located just
west of the intersection of I-395 and Seminary Road. This location is only a
quarter of a mile west of the subject property, making the Radisson the
competitor that is geographically closest to the subject property. By virtue of
its extensive function space, this hotel derives a majority of its demand from
the meeting and group segment, although it also accommodates a significant
percentage of government travelers. We consider the Radisson Plaza to be 50%
competitive with the subject property.
The Doubletree - National Airport is located approximately six miles northeast
of the subject property and just south of the Pentagon. This 632-room,
full-service property, which opened in 1971, is the largest in the competitive
market. We estimate that the Doubletree will continue to compete with the
subject property for government and leisure demand, particularly as Ramada Plaza
is repositioned to accommodate more government travelers. Facilities include 250
suites, two restaurants, a lobby bar, a revolving rooftop lounge, 17 meeting
rooms capable of seating groups of up to 600 people, and a full health club with
a weight room, a racquetball court, and a heated swimming pool.
The 400-room Sheraton - National, which opened in 1975, is located northeast of
the subject property, directly west of the Pentagon, adjacent to the Navy Annex,
and south of the Marine Corps Headquarters. These nearby government
installations are the Sheraton's primary demand generators.
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Public space and guestrooms are in need of renovation, but no refurbishment was
planned at the time of our fieldwork. Food and beverage service is provided by
two restaurants and a lounge. The Cafe Brassiere is open for breakfast, lunch,
and dinner. The Stars Restaurant and Lounge, which is located on the 16th floor,
is the hotel's fine dining outlet, and is open for dinner only. The Quarter Deck
Lounge and Sports Bar is situated in the atrium lobby.
Meeting space at the Sheraton totals approximately 19,000 square feet, and is
more extensive than that available at the subject property. The Commonwealth
Ballroom and 22 additional meeting and conference rooms can accommodate groups
ranging from ten to 2,000 people, and the Galaxy Room offers a rooftop view of
Washington, DC. Amenities include video check-out and fresh-brewed coffee in the
tower rooms. A business center provides guests with administrative services.
Recreational facilities consist of an enclosed rooftop swimming pool and an
exercise room. Complimentary shuttle service is provided to and from Washington
National Airport, the Metro station at the Pentagon, and Pentagon City Fashion
Centre every 30 minutes.
The 272-room Courtyard by Marriott is situated northeast of the subject
property, in the southern portion of the Crystal City area. This location is
near the Days Inn and the Howard Johnson, and is convenient to National Airport.
The Courtyard, which opened in 1990, appears to be in very good condition and is
expected to continue to achieve strong average rate penetration. Facilities
include a restaurant and lounge serving breakfast, lunch, and dinner, and
roughly 5,000 square feet of meeting space (which is comparable to the amount
available at the Ramada Plaza). The largest function room is the
1,260-square-foot Club Room; eight additional meeting and conference rooms
accommodate groups ranging from ten to 100 people. There are also two executive
boardrooms with a capacity ten people each. Guest amenities include copy and fax
services and dry cleaning. Recreational facilities consist of a complete fitness
center, an indoor lap pool, and a whirlpool. Complimentary shuttle service is
provided to and from National Airport and the Crystal City Metro stop.
A recent renovation of the Courtyard included an upgrade of the voice mail
system and installation of new wall vinyl and draperies in the public areas.
Given its market share, average rate, and well-maintained product, we believe
that the Courtyard by Marriott will continue to compete with the subject
property. It should be noted that this property was sold on November
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1, 1996; the terms of this sale will be discussed in the Sales Comparison
Approach section of this report.
The following table summarizes the important operating characteristics of the
secondary competitors.
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Table 6-5 Secondary Competitors
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<TABLE>
<CAPTION>
Estimated 1996
Market Segmentation
Weighted ----------------------------------
Year No. of Percent No. of. Mtg. &
Property Opened Rooms Competitive Rooms Comm. Group Leisure Govt.
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Radisson Plaza Hotel at Mark Center 1985 495 50 % 248 10 % 40 % 20 % 30 %
Doubletree - National Airport 1971 632 25 158 10 20 40 30
Sheraton National Hotel 1975 400 25 100 10 10 15 65
Courtyard by Marriott - Crystal City 1990 272 50 136 30 15 20 35
- ------------------------------------------------------------------------------------------------------------------
Totals and Averages 1,799 642 14 % 25 % 25 % 36 %
<CAPTION>
Estimated 1995 Estimated 1996
------------------------- -------------------------
Average Average
Property Occ. Rate RevPAR Occ. Rate RevPAR
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Radisson Plaza Hotel at Mark Center 69 % $85.00 $58.65 66 % $89.00 $58.74
Doubletree - National Airport 76 79.00 60.04 72 83.00 59.76
Sheraton National Hotel 62 88.00 54.56 59 90.00 53.10
Courtyard by Marriott - Crystal City 68 99.00 67.32 68 102.00 69.36
- ---------------------------------------------------------------------------------------------
69 % $86.71 $59.83 67 % $90.35 $60.53
- ---------------------------------------------------------------------------------------------
</TABLE>
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Proposed Competitors
It is important to consider any new hotels that may have an impact on the
subject property's operating performance. Based on our fieldwork in the area and
our discussions with local hotel operators, developers, and government
officials, we have identified no properties that are proposed or under
development in market that are likely to compete with the Ramada Plaza Pentagon.
Although we anticipate no further additions to the competitive supply, two
properties opened recently and warrant some discussion. A 105-room Homewood
Suites opened in April of 1996 adjacent to the Hampton Inn. Like the Hampton
Inn, it is owned and operated by Brantley Enterprises. Because this property's
facilities are materially different from those of the subject property, it is
not considered competitive at this time. A 300-unit Residence Inn opened north
of the Ramada Plaza in May of 1996; although this location is relatively close
to the Pentagon, the Residence Inn is less convenient than many of the
competitors with respect to a majority of the offices in Crystal City. We note
that this hotel differs from typical Residence Inns as a result of its high-rise
design and the availability of meeting space and a restaurant. Given its
extended-stay market orientation, strong Marriott chain affiliation, and far
higher rate structure, the Residence Inn does not pose a significant degree of
competition to the subject property.
CONCLUSION
The competitive environment encompassing the subject property appears to be
somewhat stagnant, but because there are fewer limited-service hotels proposed
for construction here than in many similar parts of the country, some moderate
growth in occupancy and average rate should be possible. We estimate the
year-end 1996 occupancy of the primary competitors at 66.1%; the higher-quality
hotels that comprise the secondary competitors achieve a higher occupancy
(estimated at 67% in 1996) and far higher average rates. Based on the structure
of the marketplace, we believe that the subject property should be able to
maintain its competitive position by virtue of the recent renovation. The lack
of additional supply entering the market will probably allow occupancy to remain
stable in the short term, but we note that no significant new demand generators
are planned for development that would serve to increase the marketwide
occupancy during the next few years.
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================================================================================
7. Projection of Occupancy and Average Rate
Historical Operating Performance
The following table sets forth the subject property's historical occupancy,
average rate, and RevPAR. For the purpose of comparison, we have also presented
corresponding data (as provided by Smith Travel Research) for the competitive
hotels described in the previous section. In addition to the annual percent
change calculations, we have determined the subject property's occupancy,
average rate, and RevPAR penetration factors.
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Table 7-1 Historical Trends
- --------------------------------------------------------------------------------
Year to Date*
-------------------------
1994 1995 1995 1996
- --------------------------------------------------------------------------------
Subject Property
Occupancy 13.8% 59.3% 57.3% 58.9%
Percent Change ---% 329.6% --- 2.8%
Occupancy Penetration 20.0% 86.3% 79.8% 85.8%
Average Rate $58.68 $61.29 $61.63 $64.90
Percent Change --- 4.5% --- 5.3%
Average Rate Penetration 76.1% 76.8% 77.4% 79.0%
RevPAR $8.10 $36.35 $35.31 $38.23
Percent Change ---% 348.8% --- 8.2%
RevPAR Penetration 15.2% 66.3% 61.7% 67.8%
Areawide (STR)
Occupancy 69.1% 68.7% 71.8% 68.6%
Percent Change 2.5% (0.6)% --- (4.5)%
Average Rate $77.13 $79.76 $79.64 $82.14
Percent Change 4.0% 3.4% --- 3.1%
RevPAR $53.30 $54.81 $57.20 $56.36
Percent Change 6.7% 2.8% --- (1.5)%
Note: Year-to-date statistics are through August
for the subject property and through September for the STR data
- --------------------------------------------------------------------------------
It should be noted that the 1994 operating statistics for the subject property
reflect only the last three months of the year, when Remington began to manage
the hotel. Year-to-date August figures show that the Ramada's occupancy (and
occupancy penetration) rose from 1995 to 1996, and although the hotel continues
to underperform the market, the subject property's year-to-date occupancy gain
of 2.8% compares favorably with the 4.5% decline registered by the market as a
whole. Similar trends are apparent with regard to average rate; although the
Ramada's year-to-date 1996 average rate is far below the overall competitive
average, its 5.3% increase was also higher than the 3.1% registered by the
market as a whole, leading to a higher penetration rate. As a result of the
occupancy and rate gains, the
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subject property's RevPAR rose by 8.2% on a year-to-date basis, while the market
showed a 1.5% decline from 1995 to 1996. Although the Ramada's year-to-date 1996
RevPAR penetration of 67.8% is far below its fair share, it is still an
improvement over the 61.7% level achieved in year-to-date 1995.
A hotel's occupancy should also be evaluated on a monthly basis to identify
seasonality trends. The following table sets forth the subject property's
monthly occupancy from October, 1994 through 1996; we note that the figures for
the last four months of 1996 represent estimates.
================================================================================
Table 7-2 Subject Property's Monthly Occupancy History
- --------------------------------------------------------------------------------
1994 1995 1996
-------------- ----------------------- --------------------------
Percent Percent
Occupancy Occupancy Change Occupancy Change
- --------------------------------------------------------------------------------
January --- 34.5 % --- 30.0 % (13.0) %
February --- 20.8 --- 34.5 65.9
March --- 63.3 --- 66.0 4.3
April --- 72.6 --- 79.4 9.4
May --- 74.2 --- 71.8 (3.2)
June --- 67.1 --- 71.5 6.6
July --- 56.6 --- 53.8 (4.9)
August --- 66.5 --- 63.8 (4.1)
September --- 74.5 --- 65.3 (12.3)
October 77.5 % 66.1 (14.7) % 74.0 12.0
November 54.4 65.8 21.0 59.0 (10.3)
December 32.4 47.4 46.3 48.0 1.3
- --------------------------------------------------------------------------------
Annual 13.8 % 59.3 % 329.6 % 59.9 % 0.9 %
Note: The final four months of 1996 are estimated figures
- --------------------------------------------------------------------------------
As illustrated above, the subject property's occupancy peaks in the spring and
fall, which is the prime demand period for tour and travel groups. Lower
occupancies are recorded during the less temperate summer and winter periods.
Premise of the Projections
To a certain degree, occupancy and rate attainment can be manipulated by
management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy
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that we believe would be implemented by a competent hotel management team to
achieve an optimal mix of occupancy and average rate.
Projected Room Night Demand
Lodging demand and occupancy can be projected through a process known as room
night analysis. A room night is a unit of hotel demand that equals one room that
is occupied for one night. After estimating the number of room nights a hotel
can be expected to attract during a 12-month period, we can determine occupancy
by dividing the number of room nights of demand captured by the number of room
nights available (calculated as the room count x 365). The total annual number
of room nights occupied in the competitive hotels equates to the market's
accommodated room night demand, as shown in the following table.
================================================================================
Table 7-3 Estimated 1996 Accommodated Room Night Demand
- --------------------------------------------------------------------------------
Marketwide Subject Property
------------------------- ------------------------------
Accommodated Percent Accommodated Percent
Market Segment Demand of Total Demand of Total
- --------------------------------------------------------------------------------
Commercial 71,000 13 % 12,000 28 %
Meeting and Group 161,000 29 23,000 53
Leisure 155,000 28 5,000 12
Government 163,000 30 3,000 7
- --------------------------------------------------------------------------------
Total 551,000 100 % 43,000 100 %
- --------------------------------------------------------------------------------
Latent Demand
The previous table illustrates the accommodated room night demand in the subject
property's competitive market. Because this estimate is based on occupancies, it
includes only those hotel rooms that were used by guests. Latent demand
considers guests who could not be accommodated by the existing competitive
supply, and can be divided into unaccommodated demand and induced demand. We
have not identified any significant amount of latent demand in the subject
property's market.
Total Usable Room Night Demand
Total usable room night demand is estimated by combining accommodated demand and
usable latent demand; because there no latent demand in the subject property's
market, the room night demand is projected by applying the growth rates
determined earlier to the historical accommodated demand. Because 1997 is the
first year following a presidential election, overall demand growth is
anticipated at 1.0%; in subsequent projection periods, increases are expected to
slow to a stabilized level of 0.5% annually. The
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following table shows the projected annual change in accommodated room night
demand in the subject property's competitive market.
================================================================================
Table 7-4 Total Room Night Demand
- --------------------------------------------------------------------------------
Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Commercial
Growth Rate --- 1.0% 0.5% 0.5% 0.5%
Accommodated Demand 70,679 71,386 71,743 72,102 72,463
Meeting and Group
Growth Rate --- 1.0% 0.5% 0.5% 0.5%
Accommodated Demand 161,118 162,729 163,543 164,361 165,183
Leisure
Growth Rate --- 1.0% 0.5% 0.5% 0.5%
Accommodated Demand 155,313 156,866 157,650 158,438 159,230
Government
Growth Rate --- 1.0% 0.5% 0.5% 0.5%
Accommodated Demand 163,474 165,109 165,935 166,765 167,599
Totals
Commercial 70,679 71,386 71,743 72,102 72,463
Meeting and Group 161,118 162,729 163,543 164,361 165,183
Leisure 155,313 156,866 157,650 158,438 159,230
Government 163,474 165,109 165,935 166,765 167,599
- --------------------------------------------------------------------------------
TOTAL DEMAND 550,584 556,090 558,871 561,666 564,475
Overall Annual Growth --- 1.0% 0.5% 0.5% 0.5%
- --------------------------------------------------------------------------------
Guestroom Supply
In 1996, the competitive properties provided a weighted total of 2,276
guestrooms. No changes to supply are anticipated, because marketwide occupancies
are low enough and land prices are high enough to create a substantial barrier
to entry. The following table shows the projected competitive supply of
available rooms and available room nights. To calculate the annual number of
available room nights, the number of available rooms is multiplied by 365.
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Table 7-5 Available Rooms and Room Nights
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Total Room
Night Room Nights Competitive
Year Demand Available Occupancy
- --------------------------------------------------------------------------------
Historical 550,584 830,558 66 %
1997 556,090 830,558 67
1998 558,871 830,558 67
1999 561,666 830,558 68
2000 564,475 830,558 68
- --------------------------------------------------------------------------------
Occupancy in the subject property's market is expected to increase only
slightly, from 66% to 67% in 1997 and 68% in 1999.
Competitive Index Analysis
Competitive indexes are used to analyze the relative market position of each
property on the basis of a particular demand segment. The index represents the
number of times each year that one room is occupied by one type of traveler
(e.g., commercial, meeting and group, leisure, or government), or the number of
room nights actually accommodated per year, per room, per market segment. For
example, if a hotel has a commercial competitive index of 190, each room in the
property is occupied 190 times a year by a commercial traveler. The competitive
index is calculated by dividing a hotel's annual accommodated room night demand
in a particular market segment by that property's room count. Competitive
indexes will be used to illustrate each property's position in the market based
on its ability to compete with other local lodging facilities.
Commercial Segment
In 1996, we estimate that the commercial segment competitive indexes in the
subject property's market range from 11 to 61. The Ramada Plaza Pentagon
achieves the highest level, followed by the Hampton Inn (with an index of 43)
and the Holiday Inn - Eisenhower (at 42). By virtue of the recent renovation,
the subject property's competitive index in the commercial segment is projected
to increase to 65 in 1997; no other changes are anticipated in the market. The
following table shows the projected commercial segment competitive indexes of
the area's hotels.
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Table 7-6 Commercial Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Ramada Plaza Pentagon 61 65 65 65 65
Holiday Inn - Eisenhower 42 42 42 42 42
Best Western Arlington Inn & Tower 11 11 11 11 11
Hampton Inn 43 43 43 43 43
Ramada Plaza Old Town 12 12 12 12 12
Days Inn - Crystal City 38 38 38 38 38
Howard Johnson - National Airport 24 24 24 24 24
Secondary Competitors 35 35 35 35 35
- --------------------------------------------------------------------------------
Meeting and Group Segment
Meeting and group segment competitive indexes are estimated to range from 14 to
120 in 1996. Once again, the Ramada Plaza Pentagon is the most competitive
hotel; this largely reflects the _high volume of tour and travel business that
the hotel accommodates. The Holiday Inn - Eisenhower and the Ramada Plaza Old
Town also maintain high indexes of 111 and 95, respectively. The lowest level is
registered by the Hampton Inn. As discussed earlier, management representatives
indicate that attempts are being made to displace some of the subject property's
tour and travel business with more lucrative government demand; consequently, we
project its competitive index in this segment to decline to 100 in 1997 before
reaching a stabilized level of 80 in 1998. The following table illustrates the
competitive indexes in the meeting and group segment.
================================================================================
Table 7-7 Meeting and Group Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Ramada Plaza Pentagon 120 100 80 80 80
Holiday Inn - Eisenhower 111 111 111 111 111
Best Western Arlington Inn & Tower 74 74 74 74 74
Hampton Inn 14 14 14 14 14
Ramada Plaza Old Town 95 95 95 95 95
Days Inn - Crystal City 50 50 50 50 50
Howard Johnson - National Airport 47 47 47 47 47
Secondary Competitors 61 61 61 61 61
- --------------------------------------------------------------------------------
Leisure Segment
We estimate that the Hampton Inn achieves the highest leisure segment
competitive index in the market, at 130 in 1996, followed by the Days Inn -
Crystal City (at 88) and the Howard Johnson - National Airport (at 83). The
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subject property maintains the lowest index in this segment, estimated at 24 in
1996. As a result of the recent renovation, we expect the leisure segment
competitive index of the Ramada Plaza Pentagon to increase to 30 in 1997 and a
stabilized level of 35 in 1998. The following table outlines the historical and
projected competitive indexes in the leisure segment.
================================================================================
Table 7-8 Leisure Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Ramada Plaza Pentagon 24 30 35 35 35
Holiday Inn - Eisenhower 69 69 69 69 69
Best Western Arlington Inn & Tower 74 74 74 74 74
Hampton Inn 130 130 130 130 130
Ramada Plaza Old Town 47 47 47 47 47
Days Inn - Crystal City 88 88 88 88 88
Howard Johnson - National Airport 83 83 83 83 83
Secondary Competitors 60 60 60 60 60
- --------------------------------------------------------------------------------
Government Segment
The estimated year-end 1996 government segment competitive indexes in the
subject property's market range from 13 to 101. The Hampton Inn achieves the
highest level, followed by the secondary competitors, the Howard Johnson
National Airport, and the Ramada Plaza Old Town (with indexes of 88, 83, and 83,
respectively). As the subject property begins to reposition itself as more of a
government house (by displacing tour and travel business and, to a lesser
extent, airline contract demand), its competitive index is projected to increase
significantly, from 13 in 1996 to 30 in 1997 and 50 in subsequent years.
================================================================================
Table 7-9 Government Segment Competitive Indexes
- --------------------------------------------------------------------------------
Property Historical 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Ramada Plaza Pentagon 13 30 50 50 50
Holiday Inn - Eisenhower 55 55 55 55 55
Best Western Arlington Inn & Tower 53 53 53 53 53
Hampton Inn 101 101 101 101 101
Ramada Plaza Old Town 83 83 83 83 83
Days Inn - Crystal City 76 76 76 76 76
Howard Johnson - National Airport 83 83 83 83 83
Secondary Competitors 88 88 88 88 88
- --------------------------------------------------------------------------------
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Subject Property's Room Night Capture and Occupancy
After the competitive index is calculated, it is adjusted to reflect the
property's room count, yielding a figure referred to as the market share
adjuster. The market share adjuster of each property is then divided by the
total market share adjuster for all of the competitors, resulting in each
hotel's market share. By multiplying the projected market share by the area's
usable room night demand, we can determine the total number of room nights
captured by a specific hotel. Occupancy is then calculated by dividing the
projected number of room nights captured by the property's total number of
available room nights. Multiplying the subject property's projected market share
by the estimated room night demand in each segment results in the following
estimate of room nights captured by the hotel.
================================================================================
Table 7-10 Room Nights Captured by the Subject Property
- --------------------------------------------------------------------------------
1997 1998 1999 2000
- ----------------------------------------------------------------------
Commercial
Demand 71,386 71,743 72,102 72,463
Market Share 0.1747 0.1747 0.1747 0.1747
- ----------------------------------------------------------------------
Capture 12,474 12,536 12,599 12,662
Meeting and Group
Demand 162,729 163,543 164,361 165,183
Market Share 0.1232 0.1010 0.1010 0.1010
- ----------------------------------------------------------------------
Capture 20,048 16,526 16,608 16,691
Leisure
Demand 156,866 157,650 158,438 159,230
Market Share 0.0371 0.0430 0.0430 0.0430
- ----------------------------------------------------------------------
Capture 5,815 6,776 6,810 6,844
Government
Demand 165,109 165,935 166,765 167,599
Market Share 0.0347 0.0565 0.0565 0.0565
- ----------------------------------------------------------------------
Capture 5,723 9,369 9,416 9,463
Total Capture 44,060 45,207 45,433 45,660
- --------------------------------------------------------------------------------
Dividing the total number of room nights captured by the subject property's
number of available room nights per year (calculated as 193 x 365) produces the
projected occupancy percentage.
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Table 7-11 Calculation of the Subject Property's Projected Occupancy
- --------------------------------------------------------------------------------
1997 1998 1999 2000
- ----------------------------------------------------------------------
Room Nights Captured 44,060 45,207 45,433 45,660
Available Room Nights 70,445 70,445 70,445 70,445
Occupancy 62.55 % 64.17 % 64.49 % 64.82 %
Rounded 63 % 64 % 64 % 65 %
- --------------------------------------------------------------------------------
For the purpose of forecasting income and expense, we will use the following
occupancy levels.
================================================================================
Table 7-12 Occupancy Forecast
- --------------------------------------------------------------------------------
Year Occupancy
- ---------------------------------------------
1997 63 %
Stabilized 64
- --------------------------------------------------------------------------------
Although the preceding room night analysis shows the subject property achieving
a 65% occupancy in the year 2000, we have chosen to use a stabilized level of
64%. The stabilized occupancy is intended to reflect the anticipated results of
the property over its remaining economic life, given any and all changes in the
life cycle of the hotel. Thus, the stabilized occupancy excludes from
consideration any abnormal relationship between supply and demand, as well as
any nonrecurring conditions that may result in unusually high or low
occupancies. Although the subject property may operate at occupancies above this
stabilized level, we believe it equally possible for new competition and
temporary economic downturns to force the occupancy below this selected point of
stability.
AVERAGE RATE ANALYSIS
One of the most important considerations in estimating the value of a lodging
facility is a supportable forecast of its attainable average rate, which is more
formally defined as the average rate per occupied room. Average rate can be
calculated by dividing the total rooms revenue achieved during a specified
period by the number of rooms sold during the same period. The projected average
rate and the anticipated occupancy percentage are used to forecast rooms
revenue, which in turn provides the basis for estimating most other income and
expense categories.
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HVS International, Mineola, New York Projection of Occupancy and 82
Average Rate
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Average Rate by Month
The following table shows the subject property's monthly occupancy and average
rate from October 1994 through 1996.
================================================================================
Table 7-13 Subject Property's Occupancy and Average Rate by Month
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996
--------------------- --------------------------------------- ---------------------------------------
Average Percent Average Percent Percent Average Percent
Occupancy Rate Occupancy Change Rate Change Occupancy Change Rate Change
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January --- --- 34.5% --- $46.38 --- 30.0% (13.0)% $54.69 17.9%
February --- --- 20.8 --- 57.41 --- 34.5 65.9 62.10 8.2
March --- --- 63.3 --- 61.08 --- 66.0 4.3 66.07 8.2
April --- --- 72.6 --- 64.42 --- 79.4 9.4 67.58 4.9
May --- --- 74.2 --- 70.38 --- 71.8 (3.2) 71.79 2.0
June --- --- 67.1 --- 64.22 --- 71.5 6.6 73.05 13.7
July --- --- 56.6 --- 62.88 --- 53.8 (4.9) 59.81 (4.9)
August --- --- 66.5 --- 54.93 --- 63.8 (4.1) 54.39 (1.0)
September --- --- 74.5 --- 61.41 --- 65.3 (12.3) 62.52 1.8
October 77.5% $62.03 66.1 (14.7)% 64.78 4.4% 74.0 12.0 74.00 14.2
November 54.4 57.27 65.8 21.0 59.68 4.2 59.0 (10.3) 69.00 15.6
December 32.4 52.95 47.4 46.3 55.25 4.3 48.0 1.3 68.00 23.1
- ----------------------------------------------------------------------------------------------------------------------
Weighted Average 13.8% $58.68 59.3% 329.6% $61.29 4.5% 59.9% 0.9% 66.19 8.0%
- --------------------------------------------------------------------------------
</TABLE>
The previous table underscores the correlation between a hotel's occupancy and
its average rate: as occupancy increases, rates tend to follow. On a monthly
basis, the Ramada Plaza Pentagon achieves its highest average rate during the
spring and fall months. However, because of the recent renovation, average rates
are expected to increase during the last few months of 1996. Higher average
rates can also be expected in the near future, as the subject property is
repositioned in the market and begins to accommodate more government demand and
less tour and travel and airline business.
Market Segmentation Method
The subject property's average rate will be projected using a market
segmentation method. The advantage of this technique is its ability to reflect
anticipated changes in the subject property's market mix and their impact on
average rate. This approach begins with an analysis of the room rates commanded
by local hotels in each market segment. Using this information, we can forecast
the subject property's rate on a segment-by-segment basis. The projected rate in
each segment is then multiplied by the number of room nights the hotel is
expected to capture in that segment (as determined earlier in this analysis).
These amounts are totaled, yielding the
<PAGE>
HVS International, Mineola, New York Projection of Occupancy and 83
Average Rate
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overall rooms revenue. Average rate is then calculated by dividing the
property's total rooms revenue by the estimated number of occupied rooms.
Although the average rate analysis presented here follows the occupancy
projections, these two statistics are highly correlated; in reality, one can not
project occupancy without making specific assumptions regarding average rate.
This relationship is best illustrated by RevPAR, which reflects a property's
ability to maximize rooms revenue. The following table summarizes the 1996
average rate and RevPAR of the subject property and its primary competitors.
================================================================================
Table 7-14 Estimated 1996 Average Rate and RevPAR of the Primary Competitors
- --------------------------------------------------------------------------------
Property Average Rate RevPAR
- -------------------------------------------------------------------
Ramada Plaza Pentagon $66.00 $39.60
Holiday Inn - Eisenhower 69.00 52.44
Best Western Arlington Inn & Tower 57.00 33.06
Hampton Inn 80.00 63.20
Ramada Plaza Old Town 88.00 57.20
Days Inn - Crystal City 83.00 57.27
Howard Johnson - National Airport 72.00 46.80
- -------------------------------------------------------------------
Average $73.29 $48.43
- --------------------------------------------------------------------------------
The subject property's average rate and RevPAR are among the lowest achieved by
the primary competitors, largely as a result of the type of business currently
accommodated by the hotel. The significant amount of tour and travel patronage
(and, to a lesser extent, airline demand) at the Ramada Plaza has served to
limit the property's rate potential. As management begins to reposition the
hotel by replacing some tour and travel patronage with government business,
average rate (and RevPAR) should increase.
Average Rate Increases
It is important to note that hotel room rate increases do not necessarily
conform to the underlying monetary inflation rate, because lodging facilities
are influenced by market conditions such as the relationship between supply and
demand. A hotel's ability to raise room rates is affected by a number of
factors, including the following.
o Supply and Demand Relationships - The relationship between supply and
demand is one of the factors that determine hotel occupancies and average
rates. Strong markets where lodging demand is increasing
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HVS International, Mineola, New York Projection of Occupancy and 84
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faster than supply are often characterized by rate growth that exceeds
inflation. Markets that are overbuilt or suffering from declining demand
are unlikely to exhibit any significant increases in average rates.
o Inflationary Pressures - Price increases caused by inflation affect hotel
room rates by eroding profit margins and encouraging operators to raise
prices. This strategy is effective only in markets that are characterized
by a healthy supply and demand relationship.
o Improving the Competitive Standard - When a new lodging facility enters a
mature market, its rates may be set higher than the marketwide average in
an effort to justify the development costs. This may allow other
competitors to achieve corresponding gains by effectively raising the
amount the market will bear. However, if the addition to supply has a
severe impact on the occupancy levels of other hotels, price competition
may ensue.
o Property-Specific Improvements - Changes that make a hotel more or less
attractive to guests can have an impact on average rate. An expansion,
renovation, upgrading, or the introduction of additional facilities and
amenities may enable greater-than-inflationary room rate increases.
Likewise, deferred maintenance may make a property less competitive,
engendering a decline in room rates.
In determining average rate projections, changes that occur prior to occupancy
stabilization are generally attributable to factors that are specific to the
property and the market. After a hotel achieves a stabilized occupancy, room
rates are generally expected to continue to increase at the underlying inflation
rate throughout the remainder of the projection period.
Average Rates by Market Segment
Average rate can be projected by considering anticipated changes in the subject
property's demand mix and the rates that can be commanded in each market
segment. To project average rate, we have applied growth factors to the hotel's
1996 rates in each market segment. The following table outlines these growth
factors.
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HVS International, Mineola, New York Projection of Occupancy and 85
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Table 7-15 1996 Average Rate by Market Segment and Assumed Growth Factors
- --------------------------------------------------------------------------------
Projected Growth Rate
------------------------------------------
1996
Market Segment Average Rate 1997 1998 1999 2000
- --------------------------------------------------------------------------------
Commercial $76.50 0.0% 0.5% 3.5% 3.5%
Meeting and Group 58.45 0.0 0.5 3.5 3.5
Leisure 63.30 0.0 0.5 3.5 3.5
Government 101.20 0.0 0.5 3.5 3.5
- --------------------------------------------------------------------------------
Based on interviews with the subject property's management representatives and
an analysis of economic and demographic data pertaining to the market, we
projected no rate gains in any segment in 1997, followed by increases of 0.5% in
1998 and 3.5% annually throughout the projection period. This stabilized growth
mirrors the assumed underlying inflation rate. To arrive at projections, the
growth factors are applied to the subject property's historical average rate in
each market segment, as illustrated by the following table.
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HVS International, Mineola, New York Projection of Occupancy and 86
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================================================================================
Table 7-16 Forecast of Average Rate by Market Segment
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Meeting Weighted Percent
Commercial & Group Leisure Government Total Average Rate Change
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical
Demand 11,835 23,247 4,649 2,536 42,267
Segment Rate $76.50 $58.45 $63.30 $101.20
Revenue $905,406 $1,358,782 $294,298 $256,645 $2,815,130 $66.60 ---
1997
Demand 12,474 20,048 5,815 5,723 44,060
Segment Rate $76.50 $58.45 $63.30 $101.20
Revenue $954,310 $1,171,808 $368,080 $579,168 $3,073,367 $69.75 4.7%
1998
Demand 12,536 16,526 6,776 9,369 45,207
Segment Rate $76.89 $58.74 $63.61 $101.71
Revenue $963,849 $970,777 $431,055 $952,884 $3,318,564 $73.41 5.2%
1999
Demand 12,599 16,608 6,810 9,416 45,433
Segment Rate $79.58 $60.80 $65.84 $105.27
Revenue $1,002,597 $1,009,739 $448,380 $991,182 $3,451,898 $75.98 3.5%
2000
Demand 12,662 16,691 6,844 9,463 45,660
Segment Rate $82.36 $62.93 $68.15 $108.95
Revenue $1,042,876 $1,050,303 $466,391 $1,030,994 $3,590,564 $78.64 3.5%
</TABLE>
- --------------------------------------------------------------------------------
The following table summarizes our projection of occupancy and average rate
through the stabilized year.
================================================================================
Table 7-17 Forecast of Occupancy and Average Rate
- --------------------------------------------------------------------------------
Year Occupancy Average Rate
- ------------------------------------------------------
1997 63 % $69.75
Stabilized 64 73.41
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Highest and Best Use 87
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================================================================================
8. Highest and Best Use
The concept of highest and best use recognized by the Appraisal Institute
distinguishes between the highest and best use of the land (as though vacant)
and that of the property (as improved). Highest and best use is defined as:
The reasonably probable and legal use of vacant land or improved property,
which is physically possible, appropriately supported, financially
feasible, and that results in the highest value.(1)
The concept of highest and best use is the premise upon which value is based,
and is a product of competitive forces in the marketplace. The principle of
balance holds that real property value is created and sustained when
contrasting, opposing, or interacting elements are in a state of equilibrium.
This principle applies to relationships among various property components as
well as the relationship between the costs of production and the property's
productivity. The point of economic balance is achieved when the combination of
land and building is optimal (i.e., when no marginal benefit or utility is
achieved by adding another unit of capital). The law of increasing returns holds
that larger amounts of the agents of production produce greater net income up to
a certain point, after which the law of diminishing returns is applied.(2)
It is important to recognize that the highest and best use of the land (as
though vacant) may differ from the highest and best use of the property (as
improved). This may occur when a site has existing improvements and the highest
and best use of the land differs from the current use. Nonetheless, the current
property use will continue until the value of the land under its highest and
best use exceeds the value of the property in its current use, plus the cost to
remove the existing improvements.
(1) The Appraisal of Real Estate - Tenth Edition, Appraisal Institute,
Chicago, IL, 1992, p. 45.
(2) Ibid., p. 40.
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HVS International, Mineola, New York Highest and Best Use 88
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In consideration of the factors influencing development in the immediate area,
it is the appraisers' opinion that the highest and best use of the subject site,
as vacant, would be to hold for speculative use. Based on the fact that the
value of the land does not exceed the value of the hotel plus the cost of
demolition, it is our further opinion that the subject property's highest and
best use, as improved, is its current use as a lodging facility.
<PAGE>
HVS International, Mineola, New York Approaches to Value 89
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================================================================================
9. Approaches to Value
In appraising real estate for market value, the appraiser has three approaches
from which to select: the income capitalization, sales comparison, and cost
approaches. Although all three valuation procedures are given consideration, the
inherent strengths of each approach and the nature of the subject property must
be evaluated to determine which will provide supportable estimates of market
value. The appraiser is then free to select one or more of the appropriate
approaches in arriving at a final value estimate.
The Income Capitalization Approach
The income capitalization approach takes a property's projected net income
before debt service and allocates this future benefit to the mortgage and equity
components based on market rates of return and loan-to-value ratios. Through a
discounted cash flow and income capitalization procedure, the value of each
component is calculated. The total of the mortgage component and the equity
component equals the value of the property. This approach is often selected as
the preferred valuation method for income-producing properties, because it most
closely reflects the investment rationale of knowledgeable buyers.
The Sales Comparison Approach
The sales comparison approach estimates the value of a property by comparing it
to similar properties that have been sold on the open market. To obtain a
supportable estimate of value, the sales price of a comparable property must be
adjusted to reflect any dissimilarities between it and the property being
appraised.
The sales comparison approach may provide a useful value estimate in the case of
simple forms of real estate, such as vacant land and single-family homes, where
the properties are homogeneous and the adjustments are few and relatively simple
to compute. In the case of complex investments such as shopping centers, office
buildings, restaurants, and lodging facilities, where the adjustments are
numerous and more difficult to quantify, the sales comparison approach loses
much of its reliability.
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HVS International, Mineola, New York Approaches to Value 90
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Hotel investors typically do not employ the sales comparison approach in
reaching their final purchase decisions. Factors such as the lack of recent
sales data, the numerous insupportable adjustments that are necessary, and the
general inability to determine the true financial terms and human motivations of
comparable transactions often make the results of this technique questionable.
Although the sales comparison approach may provide a range of values that
supports the final estimate, reliance on this method beyond the establishment of
broad parameters is rarely justified by the quality of the sales data.
The market-derived capitalization rates sometimes used by appraisers are
susceptible to the same shortcomings inherent in the sales comparison approach.
To substantially reduce the reliability of the income capitalization approach by
employing capitalization rates obtained from unsupported market data weakens the
final value estimate and ignores the typical investment analysis procedures
employed by hotel purchasers. Because appraisers are obligated to mirror the
actions of the marketplace, we generally give the sales comparison approach
minimal weight in the hotel appraisal process beyond bracketing the final
estimate.(1)
The Cost Approach
The cost approach estimates market value by computing the current cost to
replace the property and subtracting any depreciation resulting from physical
deterioration, functional obsolescence, and external (or economic) obsolescence.
The value of the land, as if vacant and available, is then added to the
depreciated value of the improvements to produce a total value estimate.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements grow older and begin to
deteriorate, the resultant loss in value becomes increasingly difficult to
quantify accurately. We find that knowledgeable hotel buyers base their purchase
decisions on economic factors such as projected net income and return on
investment. Because the cost approach does not reflect these income-related
considerations and requires a number of highly subjective depreciation
estimates, this approach is given minimal weight in the hotel valuation process.
As noted in Hotels and Motels: A Guide to Market
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
209.
<PAGE>
HVS International, Mineola, New York Approaches to Value 91
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Analysis, Investment Analysis, and Valuations, "the cost approach is seldom used
to value existing hotels and motels."(1)
Reconciliation
The final step in the valuation process is the reconciliation and correlation of
the value indications. Factors that are considered in assessing the reliability
of each approach include the purpose of the appraisal, the nature of the subject
property, and the reliability of the data used. In reconciliation, the
applicability and supportability of each approach is considered and the range of
value indications is examined. The most significant weight is given to the
approach that produces the most reliable solution and most closely reflects the
criteria used by typical investors.
Our nationwide experience with numerous hostelry buyers and sellers indicates
that the procedures used in estimating market value by the income capitalization
approach are comparable to those employed by the investors who constitute the
marketplace. For this reason, the income capitalization approach produces the
most supportable value estimate, and it is given the greatest weight in the
hotel valuation process.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
208.
<PAGE>
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================================================================================
10. Income Capitalization Approach
The income capitalization approach is based on the principle that the value of a
property is indicated by its net return, or what is known as the present worth
of future benefits. The future benefits of income-producing properties, such as
hotels, are net income before debt service and depreciation (as estimated by a
forecast of income and expense) and any anticipated reversionary proceeds from a
sale. These future benefits can be converted into an indication of market value
through a capitalization process and discounted cash flow analysis. Using the
income capitalization approach, the subject property has been valued by
analyzing the local market for transient accommodations, examining existing and
proposed competition, and developing a forecast of income and expense that
reflects current and anticipated income trends and cost components through a
stabilized year of operation.
The forecast of income and expense is expressed in current dollars for each
year. The stabilized year is intended to reflect the anticipated operating
results of the property over its remaining economic life, given any or all
applicable stages of build-up, plateau, and decline in the life cycle of the
hotel. Thus, income and expense estimates from the stabilized year forward
exclude from consideration any abnormal relationship between supply and demand,
as well as any nonrecurring conditions that may result in unusual revenues or
expenses.
As stated in the textbook entitled Hotels and Motels: A Guide to Market
Analysis, Investment Analysis, and Valuations, published by the Appraisal
Institute, "of the three valuation approaches available to the appraiser, the
income capitalization approach generally provides the most persuasive and
supportable conclusions when valuing a lodging facility."(1) This text
recommends that using a ten-year forecast and an equity yield rate "most
accurately reflects the actions of typical hotel buyers, who purchase properties
based
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
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HVS International, Mineola, New York Income Capitalization Approach 93
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on their leveraged discounted cash flow."(1) The simpler procedure of using a
ten-year forecast and a discount rate is "less reliable because the derivation
of the discount rate has little support. Moreover, it is difficult to adjust the
discount rate for changes in the cost of capital."(2)
We have used both methods to discount the subject property's projected net
income into an estimate of value. Method One is a ten-year discounted cash flow
analysis in which the cash flow to equity and the equity reversion are
discounted to the present value at the equity yield rate, and the income to the
mortgagee is discounted at a mortgage interest rate. The sum of the equity and
mortgage values is the total property value. Method Two is a simple ten-year
discounted cash flow analysis in which the annual net income before debt service
and the reversionary proceeds following a sale at the end of the tenth year are
discounted back to the date of the appraisal at an overall discount rate, and
then totaled to produce an indication of the present worth of future benefits.
To convert the projected income stream into an estimate of value through Method
One, the anticipated net income (before debt service and depreciation) is
allocated to the mortgage and equity components based on market rates of return
and loan-to-value ratios. The total of the mortgage component and the equity
component equals the value of the property. The process is described as follows.
1. The terms of typical hotel financing are set forth, including interest
rate, amortization term, and loan-to-value ratio.
2. An equity yield rate of return is established. Numerous hotel buyers base
their equity investments on a ten-year equity yield rate projection that
takes into account ownership benefits such as periodic cash flow
distributions, residual sale or refinancing distributions that return any
property appreciation and mortgage amortization, income tax benefits, and
various non-financial considerations such as status and prestige. The
equity yield rate is also known as the internal rate of return on equity.
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992, p.
236.
(2) Ibid.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 94
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3. The value of the equity component is calculated by first deducting the
annual debt service from the projected net income before debt service,
leaving the net income to equity for each year. The net income as of the
11th year is capitalized into a reversionary value. After deducting the
mortgage balance at the end of the tenth year and the typical brokerage
and legal costs, the equity residual is discounted back to the date of
value at the equity yield rate. The net income to equity for each of the
ten projection years is also discounted to the present value. The sum of
these discounted values equates to the value of the equity component.
Adding the equity component to the initial mortgage balance yields the
overall property value.
Because the mortgage and the debt service amounts are unknown but the
loan-to-value ratio was determined in Step #1, the preceding calculation
can be solved through an iterative process or by use of a linear algebraic
equation that computes the total property value. The algebraic equation
that solves for the total property value using a ten-year mortgage and
equity technique was developed by Suzanne R. Mellen, MAI, Managing
Director of the San Francisco office of HVS International. A complete
discussion of the technique is presented in her article entitled,
"Simultaneous Valuation: A New Technique."(1)
4. The value is proven by allocating the total property value between the
mortgage and equity components and verifying that the rates of return set
forth in Steps #1 and #2 can be met from the projected net income.
The process of converting the projected income stream into an estimate of value
through Method Two is described as follows.
1. A discount rate is established by evaluating the total property yield
derived by Method One. Occasionally, the discount rate may be adjusted
slightly based on the total property yields indicated by recent
transactions involving hotels similar to the subject property.
2. The reversionary value is calculated by capitalizing the 11th-year net
income by the terminal capitalization rate and deducting typical brokerage
and legal fees.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 95
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3. The ten-year forecast of net income (before debt service and depreciation)
and the reversionary value are discounted to the date of value at the rate
derived above.
Review of Operating History
Because the Ramada Plaza Pentagon is an existing hotel with an established
operating performance, its historical income and expense experience can serve as
a basis for projections. The subject property opened in 1975, and achieved
occupancy levels of 59.3% in 1995 and 58.9% as of August, 1996. The following
income and expense statements were provided by the management representatives,
and are unaudited. Where applicable, we have reorganized the statements in
accordance with the Uniform System of Accounts for Hotels. As a result of the
change in ownership in October of 1994, complete operating statements for prior
years were not available. To facilitate comparisons, we have presented the
year-to-date August, 1996 data in both of the following tables.
<PAGE>
HVS International, Mineola, New York Income Capitalization Approach 96
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================================================================================
Table 10-1 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 Year-to-Date August, 1996
-------------------------------------------------- -------------------------------------------------
No. of Rooms: 193 193
No. of Occupied Rooms: 41,787 27,741
No. of Days Open: 365 244
Occupancy: 59.3% Amount per Amount per 58.9% Amount per Amount per
Average Rate: $61.29 Percent Available Occupied $64.90 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,561 77.4 % $13,270 $61.29 $1,800 77.4 % $9,329 $64.90
Food 558 16.9 2,890 13.35 409 17.6 2,118 14.74
Beverage 90 2.7 467 2.16 46 2.0 238 1.66
Telephone 63 1.9 328 1.51 49 2.1 254 1.76
Other Income 35 1.0 180 15.94 23 1.0 119 0.83
Total 3,307 99.9 17,135 79.14 2,327 100.1 12,058 83.89
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 666 26.0 3,451 15.94 468 26.0 2,424 16.86
Food & Beverage 512 79.1 2,654 12.26 322 70.7 1,667 11.60
Telephone 41 64.3 211 0.97 21 42.4 108 0.75
Total 1,219 36.9 6,317 29.17 810 34.8 4,198 29.21
- ------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,088 63.0 10,819 49.97 1,517 65.3 7,860 54.68
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 454 13.7 2,353 10.87 330 14.2 1,708 11.88
Management Fee 99 3.0 514 2.38 70 3.0 362 2.52
Marketing 268 8.1 1,390 6.42 166 7.1 860 5.98
Franchise Fees 75 2.3 390 1.80 55 2.3 283 1.97
Property Oper. & Maint. 250 7.6 1,294 5.98 158 6.8 819 5.70
Energy 275 8.3 1,425 6.58 169 7.3 876 6.09
Total 1,422 43.0 7,367 34.03 947 40.7 4,907 34.14
- ------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 666 20.0 3,452 15.94 570 24.6 2,953 20.54
- ------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 107 3.2 554 2.56 96 4.1 500 3.48
Insurance 62 1.9 322 1.49 35 1.5 181 1.26
Total 169 5.1 876 4.05 131 5.6 681 4.74
- ------------------------------------------------------------------------------------------------------------------------------
NET INCOME $497 14.9 % $2,576 $11.89 $439 19.0 % $2,272 $15.80
==============================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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HVS International, Mineola, New York Income Capitalization Approach 97
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================================================================================
Table 10-2 Historical Operating Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year-to-Date August, 1996 Year-to-Date August, 1995
------------------------------------------------ ------------------------------------------------
No. of Rooms: 193 193
No. of Occupied Rooms: 27,741 26,833
No. of Days Open: 244 243
Occupancy: 58.9% Amount per Amount per 57.2% Amount per Amount per
Average Rate: $64.90 Percent Available Occupied $61.71 Percent Available Occupied
(+000) of Gross Room Room (+000) of Gross Room Room
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $1,800 77.4 % $9,329 $64.90 $1,656 78.9 % $8,579 $61.71
Food 409 17.6 2,118 14.74 333 15.9 1,725 12.41
Beverage 46 2.0 238 1.66 54 2.6 281 2.02
Telephone 49 2.1 254 1.76 35 1.7 180 1.29
Other Income 23 1.0 119 0.83 22 1.1 116 0.83
Total 2,327 100.1 12,058 83.89 2,100 100.2 10,880 78.26
- ----------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 468 26.0 2,424 16.86 436 26.3 2,260 16.25
Food & Beverage 322 70.7 1,667 11.60 317 82.0 1,645 11.83
Telephone 21 42.4 108 0.75 27 76.8 138 0.99
Total 810 34.8 4,198 29.21 780 37.2 4,042 29.08
- ----------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 1,517 65.3 7,860 54.68 1,320 63.0 6,838 49.18
- ----------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 330 14.2 1,708 11.88 253 12.1 1,313 9.44
Management Fee 70 3.0 362 2.52 63 3.0 327 2.35
Marketing 166 7.1 860 5.98 175 8.3 905 6.51
Franchise Fees 55 2.3 283 1.97 49 2.3 252 1.81
Property Oper. & Maint. 158 6.8 819 5.70 169 8.0 876 6.30
Energy 169 7.3 876 6.09 190 9.1 986 7.09
Total 947 40.7 4,907 34.14 899 42.8 4,659 33.51
- ----------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 570 24.6 2,953 20.54 420 20.2 2,179 15.67
- ----------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 96 4.1 500 3.48 69 3.3 360 2.59
Insurance 35 1.5 181 1.26 42 2.0 219 1.57
Total 131 5.6 681 4.74 112 5.3 579 4.16
- ----------------------------------------------------------------------------------------------------------------------------
NET INCOME $439 19.0 % $2,272 $15.80 $309 14.9 % $1,600 $11.51
============================================================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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Comparable Operating Statements
The year-to-date August historical income and expense statements show that the
subject property's overall net income rose from 14.9% of total revenue in 1995
to 19.0% in 1996. This shows an improvement in management, because the hotel is
dropping a higher percentage of revenue to the bottom line, but the overall net
profit level is still low when compared to industry standards for a property of
this type.
Year-to-date August, 1996 figures show total revenues of $2,327,000, including
rooms revenue of $1,800,000 (or 77.4% of total revenue). During the same period
of 1995, the Ramada registered rooms revenue of $1,656,000, which equated to
78.9% of total revenue. Food revenue increased moderately as a dollar amount,
and rose from 15.9% of total revenue in year-to-date 1995 to 17.6% in
year-to-date 1996. Telephone revenue also increased from $35,000 to $49,000
during this period. Other income, which includes the rent from the gift shop,
other space rentals, vending, and miscellaneous items, rose slightly on a
year-to-date basis.
Departmental expenses, which equated to 37.2% of revenues in year-to-date 1995,
decreased moderately (to 34.8%) in year-to-date 1996. Rooms expense also
declined, from 26.3% of rooms revenue as of August, 1995 to 26.0% (or $468,000)
as of August, 1996. These ratios are comparable to market averages for
properties of this type. The year-to-date 1996 food and beverage expense ratio
of 70.7% represented a significant improvement over the 82.0% level registered
during the same period of 1995, and is considerably lower than industry
standards of 80% to 85%, reflecting skilled management in this area. On a
year-to-date basis, every departmental expense declined from 1995 to 1996, which
shows evidence of efficient management.
Operating expenses equated to 40.7% of total revenue in year-to-date 1996, down
slightly from the 42.8% ratio achieved in year-to-date 1995. With the exception
of administrative and general costs, every operating expense either remained
constant or decreased as a percentage of revenue during this period, again
indicating greater operational efficiency. House profit increased substantially
on a year-to-date August basis, from 20.2% of total revenue in 1995 to 24.6% in
1996. We do note, however, that this ratio remains slightly lower than industry
averages, indicating that the property's operating performance could still be
improved somewhat.
Overall, the Ramada registered net income of $439,000 in year-to-date 1996, and
although this is higher than the $309,000 registered during the same
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period of 1995, it remains somewhat lower than what is normally expected for a
hotel of this type.
Forecast of Income and Expense
The forecast of income and expense is intended to reflect the appraiser's
subjective estimate of how a typical buyer would project the subject property's
operating results. Depending on the dynamics of the local market, a typical
buyer's projection may be adjusted upward or downward. We have attempted to
consider these factors in formulating this forecast.
HVS International uses a fixed and variable component model to project a lodging
facility's revenue and expense levels. This model is based on the premise that
hotel revenues and expenses have one component that is fixed and another that
varies directly with occupancy and facility usage. A projection can be made by
taking a known level of revenue or expense and calculating its fixed and
variable components. The fixed component is then held constant, while the
variable component is adjusted for the percent change between the projected
occupancy and facility usage and that which produced the known level of revenue
or expense.
Base-Year Statement of Income and Expense
Based on our review of the operating histories of the subject property and
comparable hotels, we have derived a base-year statement of income and expense
expressed in 1995 dollars. The units of comparison include a percentage of
departmental and total revenue, amounts per available room, and amounts per
occupied room. The income and expense ratios reflect an occupancy level of
59.3%. This base-year profit and loss statement will be used to determine the
relationship between the fixed and variable components.
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Table 10-4 Base-Year Statement of Income and Expense
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995
--------------------------------------------------------------
No. of Rooms: 193
Occupancy: 59.3%
Average Rate: $61.29 Amount per Amount per
No. of Occupied Rooms: 41,787 Percent Available Occupied
(+000) of Gross Room Room
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Rooms $2,561 75.8% $13,270 $61.29
Food 625 18.5 3,237 14.95
Beverage 78 2.3 402 1.86
Telephone 82 2.4 426 1.97
Other Income 35 1.0 180 0.83
Total 3,380 100.0 17,515 80.90
- ---------------------------------------------------------------------------------------
EXPENSES
Rooms* 699 27.3 3,624 16.74
Food & Beverage* 565 80.5 2,929 13.53
Telephone* 46 55.3 236 1.09
Administrative & General 406 12.0 2,102 9.71
Management Fee 101 3.0 525 2.43
Marketing 268 7.9 1,390 6.42
Franchise Fees 102 3.0 531 2.45
Property Oper. & Maint. 237 7.0 1,229 5.68
Energy 253 7.5 1,311 6.05
Property Taxes 107 3.2 554 2.56
Insurance 68 2.0 350 1.62
Reserve for Replacement 135 4.0 701 3.24
Total 2,988 88.4 15,482 71.51
- ---------------------------------------------------------------------------------------
NET INCOME $392 11.6% $2,033 $9.39
=======================================================================================
</TABLE>
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
Inflation Assumptions
The base revenue and expense amounts are inflated to reflect current dollars for
each projection year. Although line items can be affected by different factors,
we must establish a general rate of inflation that will be applied to most
revenue and expense categories. The following table shows inflation estimates
made by economists at some noted institutions and corporations.
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Table 10-5 Inflation Estimates
- --------------------------------------------------------------------------------
Projected Increase in Consumer Price Index
(Annualized Rate Versus 12 Months Earlier)
------------------------------------------
November May
Source of 1996 of 1997
- --------------------------------------------------------------------------------
Maureen Allyn, Scudder Stevens Clark 3.1% 2.3%
Wayne Angell, Bear Stearns 3.0 3.2
Richard Berner, Mellon Bank 2.9 2.8
David Berson, Fannie Mae 2.9 2.8
David Blitzer, S&P 3.0 2.7
Paul Boltz, T. Rowe Price 3.2 3.5
David Bostian, Herzog, Heine, Geduld 2.9 2.5
Philip Braverman, DKB Securities 3.0 2.8
William Brown, J.P. Morgan 3.3 3.2
Rosanne Cahn, CS First Boston 3.1 2.6
James Coons, Huntington National Bank 3.2 3.0
Michael Cosgrove, The Econoclast 3.2 3.3
Dewey Daane, Vanderbilt University 3.4 3.6
Robert Dederick, Northern Trust 3.1 3.4
W.Dudley, Goldman Sachs 3.4 3.2
Michael Englund, MMS Intl. 3.2 3.3
Michael Evans, Evans Group 3.0 3.0
Gail Fosler, Conference Board 3.5 3.6
Maury Harris, Paine Weber, Inc. 2.8 2.8
Tracy Herrick, Jefferies & Co. 3.2 3.6
Stuart Hoffman, PNC Bank 3.1 2.8
William Hummer, Wayne Hummer 2.9 3.0
Edward Hyman, ISI Group 2.8 2.1
Saul Hymans, University of Michigan 2.7 1.7
Mieczyslaw Karczmar, Deutsche Bank 2.8 3.2
Kurt Karl, WEFA Group 2.6 2.3
Irwin Kellner, Chase Manhattan Bank 2.6 2.3
D. Laufenberg, American Express Financial Advisors 3.2 3.4
Michelle Laughlin, Sanwa Securities 3.0 3.2
Carol Leisenring, CoreStates Financial 2.7 2.5
Richard Lemmon, General Motors 3.0 3.0
Mickey Levy, NationsBank Capital Markets 2.6 2.4
David Littmann, Comerica 3.1 3.0
John Lonski, Moody's Investors Service 3.3 3.2
Paul McCulley, UBS Securities 3.0 2.8
John McDevitt, 3M 2.6 2.5
Arnold Moskowitz, Moskowitz Capital 3.1 3.5
John Mueller, LBMC, Inc. 3.2 2.5
David Munro, High Frequency Econ. 3.0 2.5
Carl Palash, MCM MoneyWatch 3.0 3.0
Nicholas Perna, Fleet Financial Group 3.3 3.3
Elliott Platt, Donaldson Lufkin 2.8 2.0
Maria F. Ramirez, MF Ramirez 3.0 3.0
Donald Ratajczak, Georgia State University 3.0 3.3
David Resler, Nomura Securities International 2.9 2.6
Allan Reynolds, Hudson Institute 3.3 3.6
Richard Rippe, Prudential Securities 3.1 3.3
A. Gary Schilling, Schilling & Co. 3.0 3.0
Allen Sinai, Lehman Brothers 3.2 3.4
James Smith, University of North Carolina 2.1 1.9
Susan Sterne, Economic Analysis 2.5 2.5
Donald Straszheim, Merrill Lynch 2.7 2.3
Thomas Synott III, U.S. Trust Company 3.3 3.4
John Williams, Bankers Trust 3.0 3.1
Raymond Worseck, A.G. Edwards 3.6 3.3
David Wyss, DRI/McGraw-Hill 3.0 2.5
Edward Yardeni, Deutsche Morgan Grenfell 2.2 2.0
Mark Zandi, Regional Financial Associates 3.0 3.2
---- ----
Average 3.0% 2.9%
Source: Wall Street Journal, July 1, 1996
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The preceding table shows inflation forecasts averaging 3.0% and 2.9%. Most of
the economists in the sample estimate inflation rates ranging from 2.5% to 3.4%,
although several anticipate slightly higher level. As a further check on these
inflation projections, we have reviewed historical increases in the Consumer
Price Index. Because the value of real estate is predicated on cash flows over a
relatively long period, inflation should be considered from a long-term
perspective. Between 1986 and 1995, the national CPI increased at an average
annual compounded rate of 3.7%. In consideration of these historical trends, the
projections set forth above, and our assessment of probable property
appreciation levels, we have selected an annual stabilized inflation rate of
3.5% throughout the projection period.
One of the exceptions to this general inflation assumption is the projected
growth in average rate. As noted earlier, increases in the subject property's
room rate are projected as follows.
================================================================================
Table 10-6 Projected Growth in Average Rate
- --------------------------------------------------------------------------------
Increase From
Year Previous Year
- -----------------------------------------------
1997 4.7%
1998 5.2
Thereafter 3.5
- --------------------------------------------------------------------------------
Using these inflation assumptions, the base-year income and expense statement
(which is expressed in 1995 dollars) is inflated to arrive at projections. Each
revenue and expense category will be projected using the inflated base statement
to determine the fixed and variable component relationships.
Rooms Revenue
Rooms revenue is determined by two variables: occupancy and average rate.
Earlier in this report, we estimated the subject property's occupancy and
average rate as follows.
================================================================================
Table 10-7 Projected Occupancy and Average Rate
- --------------------------------------------------------------------------------
1997 Stabilized
- -------------------------------------------------------------------
Projected Occupancy Percentage 63.0 % 64.0 %
Projected Average Rate $69.75 $73.41
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Rooms revenue is calculated as follows.
================================================================================
Table 10-8 Forecast of Rooms Revenue
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rooms
No. of Days Revenue
Year Occupancy Average Rate Rooms in Year (+000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 63 % x $69.75 x 193 x 365 = $3,096
Stabilized 64 x 73.41 x 193 x 365 = 3,310
</TABLE>
- --------------------------------------------------------------------------------
Food and Beverage Revenue
Food and beverage revenue is generated by a hotel's restaurants, lounges, coffee
shops, snack bars, banquet rooms, and room service. In addition to providing a
source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a
substantial percentage of a hotel's food and beverage patrons.
The Uniform System of Accounts for Hotels/Eighth Revised Edition defines food
revenue as "revenue derived from the sale of food, including coffee, milk, tea
and soft drinks. Food sales do not include meals charged on employees' (staff)
checks." Beverage revenues are "derived from the sale of beverages." In addition
to the revenue generated by the sale of food and beverages, hotels often produce
other income that is related to this department, such as meeting room rentals,
cover charges, service charges, and miscellaneous banquet revenue. Although food
revenue varies directly with changes in occupancy, the small portion generated
by banquet sales and outside capture is relatively fixed. The following table
shows the projected food revenue and several units of comparison that can be
used to check the reasonableness of the forecast.
================================================================================
Table 10-9 Forecast of Food Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Food Revenue (+000) $700 $734
Percent of Total Revenue 17.4% 17.2%
Amount per Available Room $3,629 $3,801
Amount per Occupied Room $15.77 $16.28
- --------------------------------------------------------------------------------
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Based on these units of comparison, the projected food revenue appears
reasonable when compared with industry standards.
Beverage revenue is generated by the sale of alcoholic beverages in a hotel's
restaurants and banquet rooms and the sale of alcoholic and nonalcoholic
beverages in the bars and lounges. Based on an analysis of comparable lodging
facilities, beverage revenue is estimated to average approximately 12.4% of food
revenue. Thus, beverage revenue is projected by multiplying the projected food
revenue by 12.4%. The following table illustrates the forecast of beverage
revenue.
================================================================================
Table 10-10 Forecast of Beverage Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Beverage Revenue (+000) $87 $91
- --------------------------------------------------------------------------------
Telephone Revenue
Telephone revenue is generated by hotel guests who charge local and
long-distance calls to their rooms, and by individuals who use the property's
public telephones. Prior to the early 1980s, hotels were limited to a 15%
commission on long-distance calls, which allowed few profits. Deregulation and
the development of sophisticated call-accounting equipment have resulted in
profitable telephone departments. State-of-the-art equipment is capable of
least-cost routing, automatic price billing, and posting telephone charges to
guest folios. Hotels can select among various long-distance services, and can
also work with any one of a number of Alternative Operator Services (AOS). These
systems route and price calls, and may provide additional services.
In recent years, the hospitality industry has experienced diverging trends with
respect to telephone revenue. Prices per call have increased, in some cases
dramatically, yielding departmental profits as high as 50% to 55%. However, the
number of long-distance calls billed per occupied room has declined as a result
of the extensive use of long-distance carrier services that can be accessed
locally or through a toll-free number. When guests charge long-distance calls to
their personal or business accounts in this manner, the hotel loses the revenue
associated with long-distance tariffs and mark-ups, and only receives an access
fee.
Most telephone revenue varies directly with changes in occupancy. However, there
is a small fixed component consisting of public telephone revenue, which is
primarily generated by individuals using the hotel's food,
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beverage, and meeting facilities. Using this fixed and variable relationship,
the subject property's telephone revenue is projected as follows.
================================================================================
Table 10-11 Forecast of Telephone Revenue
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Revenue (+000) $93 $98
Percent of Total Revenue 2.3 % 2.3 %
Amount per Available Room $482 $506
Amount per Occupied Room $2.10 $2.17
- --------------------------------------------------------------------------------
Other Income
Other income is derived from sources other than guestrooms, food and beverages,
and telephone services. Depending on the type of hotel and the facilities and
amenities offered, other income may include the following items.
o Rentals - stores, office space, concession space, showcases, clubs, and
storage.
o Commissions from auto rentals, photography, telegrams, and vending
services.
o Concessions - revenue derived from charges for the privilege of operating
departments that could be operated by the hotel. Gift shops, barber shops,
and beauty salons are often operated as concessions.
o Laundry, dry cleaning, and fax services.
o Cash discounts earned - discounts from creditors' accounts for payment
within the discount period. This item does not include trade discounts,
which are a deduction from the cost of goods sold.
o Electronic games and pinball machines.
o Forfeited advance deposits and guaranteed no-shows.
o Service charges - service charges that are added to a customer's account
but are not paid to service personnel.
o Interest income - interest from house accounts.
o Salvage - revenue from the sale of old or obsolete items.
Other income is highly sensitive to changes in occupancy and slightly correlated
to food and beverage volume. Using this fixed and variable relationship, the
subject property's other income is projected as follows.
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================================================================================
Table 10-12 Forecast of Other Income
- --------------------------------------------------------------------------------
1997 Stabilized
- -------------------------------------------------------------------------
Projected Other Income (+000) $38 $39
Percent of Total Revenue 0.9% 0.9%
Amount per Available Room $196 $204
Amount per Occupied Room $0.86 $0.87
- --------------------------------------------------------------------------------
Rooms Expense
Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy
(because managers can schedule maids, bell personnel, and house cleaners to work
when demand requires), much of a hotel's payroll is fixed. Front desk personnel,
public area cleaners, the housekeeper, and other supervisors must be maintained
at all times. As a result, salaries, wages, and employee benefits are only
moderately sensitive to changes in occupancy.
Commissions represent remuneration to travel agents for booking rooms. Because
these fees are based on a percentage of rooms revenue, they are highly dependent
on occupancy and rate. Reservations is a similar expense that reflects the cost
of a franchise reservation system that typically bills as a percentage of rooms
revenue. China, glassware, and linen; operating supplies; other operating
expenses; and uniforms are only slightly affected by changes in volume. In light
of these considerations, we project the subject property's rooms expense as
follows.
================================================================================
Table 10-13 Forecast of Rooms Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Rooms Expense (+000) $768 $800
Ratio to Rooms Revenue 24.8% 24.2%
Amount per Available Room $3,979 $4,145
Amount per Occupied Room $17.30 $17.74
- --------------------------------------------------------------------------------
Food and Beverage Expense
Food and beverage expenses consist of items necessary for the operation of a
hotel's food, beverage, and banquet facilities. Although food and beverage
revenues are projected separately and occupy separate categories on a
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hotel's income and expense statement, the corresponding expenses are combined
into a single category.
The costs associated with food and beverage sales and payroll are moderately to
highly correlated to food and beverage revenues, and comprise a substantial
portion of this category. China, glassware, and linen; operating supplies; other
operating expenses; and uniforms are very slightly dependent on volume. Although
the other expense items are basically fixed, they represent a relatively
insignificant factor. As noted earlier, the subject property's year-to-date
August, 1996 food and beverage expense ratio was far below industry averages. In
light of this factor, we have adjusted this line item upward to reflect what a
typical operator of this property would achieve. Specifically, we project food
and beverage expense to equate to 78.6% of food and beverage revenue in 1997,
declining to a stabilized level of 78.0% in 1998. There are slight fluctuations
in ratio in some subsequent years, merely as a result of rounding. We note that
these rounding errors are apparent in several categories of the income and
expense projection, but they do not influence the overall correct dollar
amounts. After considering the fixed and variable components, we forecast the
subject property's food and beverage expense as follows.
================================================================================
Table 10-14 Forecast of Food and Beverage Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Food & Beverage Expense (+000) $618 $644
Ratio to Food & Beverage Revenue 78.6% 78.0%
Amount per Available Room $3,203 $3,335
Amount per Occupied Room $13.93 $14.28
- --------------------------------------------------------------------------------
Telephone Expense
Telephone expense consists of all costs associated with this department. In the
case of small hotels with automated systems, the operation of telephones may be
an additional responsibility of front desk personnel; however, most large
properties employ full-time operators.
The bulk of the telephone expense consists of the cost of local and
long-distance calls billed by the telephone companies that provide these
services. Because most calls are made by in-house guests, these costs are
moderately correlated to occupancy. Unless a particular hotel department incurs
high expenses, use of telephone services by hotel employees is charged to this
account. The remaining costs, which include salaries, wages, printing, and
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HVS International, Mineola, New York Income Capitalization Approach 108
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other expenses, are moderately fixed. On a year-to-date basis, the subject
property's telephone expense equated to 42.4% of telephone revenue in 1996. This
level has been adjusted upward somewhat to reflect industry averages. The
following table illustrates our forecast of telephone expense.
================================================================================
Table 10-15 Forecast of Telephone Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Telephone Expense (+000) $50 $52
Ratio to Telephone Revenue 53.6% 53.0%
Amount per Available Room $258 $269
Amount per Occupied Room $1.13 $1.15
- --------------------------------------------------------------------------------
Administrative and General Expense
Administrative and general expense includes the salaries and wages of all
administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions
are cash overages and shortages; commissions on credit card charges; provision
for doubtful accounts, which are moderately affected by the number of
transactions or total revenue; and salaries, wages, and benefits, which are very
slightly influenced by volume. In recent years, several new items have been
added to the administrative and general expense category. Human resources
includes the cost of recruiting, relocating, and training personnel. Security
consists of the cost of contract security for the property and related expenses.
The general insurance category includes premiums for liability, fidelity, life,
theft coverage, and business interruption insurance. Fire and extended-coverage
insurance on the building and contents is a separate insurance expense category.
Liability insurance covers third-party actions involving bodily injury and
personal property, and is typically based on rooms receipts, meeting and banquet
income, and food and beverage revenue. Factors that may have an impact on a
hotel's liability expense include the size of the meeting, banquet, and
restaurant facilities; the ratio between the amount of alcohol served and total
food and beverage sales; the presence of a dance floor; a high-rise structure; a
swimming pool; life safety support systems; and the guest transportation
services provided by the hotel. The subject property's historical administrative
and general expense was quite high in
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comparison to industry standards, which generally dictate a range of
approximately 8% to 11% of total revenue. Consequently, we adjusted the
historical ratio down to 11.2% in 1997 and 11.0% in 1998, where it is assumed to
stabilize. The following table illustrates our forecast of administrative and
general expense.
================================================================================
Table 10-16 Forecast of Administrative and General Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- ----------------------------------------------------------------------------
Projected Admin. & General Expense (+000) $449 $469
Ratio to Total Revenue 11.2% 11.0%
Amount per Available Room $2,326 $2,430
Amount per Occupied Room $10.11 $10.39
- --------------------------------------------------------------------------------
Management Fee
Management expense consists of the basic fee paid to the type of company that is
anticipated to operate the subject property. Some companies provide management
services alone, while others also provide a brand name affiliation. When a
management company has no brand identification, the property owner often
acquires a franchise that provides the necessary image and recognition. Although
most hotel management companies employ a fee schedule that includes a basic fee
(usually a percentage of total revenue) and an incentive fee (usually a
percentage of defined profit), the incentive portion is often subordinated to
debt service and does not appear in a forecast of net income before debt
service. Basic hotel management fees are almost always based on a percentage of
total revenue, which means they have no fixed component.
Although the incentive fee does not decrease the cash flow available for debt
service, it does reduce the potential cash flow to equity, and must be accounted
for in the valuation process. Generally, the most appropriate procedure for
handling the impact of the incentive fee on the equity component is to use the
projected net income before debt service and incentive fee, but adjust the
equity dividend or yield rate upward to reflect this added management cost. The
adjusted equity dividend and yield rates will be described later in this
section.
The subject property is operated by Remington Hospitality, Inc. According to
Remington's management agreement with Alexandria Virginia Hotel Limited
Partnership, 3% of gross revenues are payable to Remington on a monthly basis.
Based on our review of the current market for management
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contracts, we are of the opinion that this fee is consistent with prevailing
terms. Applying this management fee structure to the projection of total revenue
yields the following forecast of the subject property's management fee.
================================================================================
Table 10-17 Forecast of Management Fee
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Management Fee (+000) $120 $128
- --------------------------------------------------------------------------------
Marketing Expense
Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers.
Marketing can be used to create an image, develop customer awareness, and
stimulate patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception
of fees and commissions, are totally controlled by management. Most hotel
operators establish an annual marketing budget that sets forth all planned
expenditures. If the budget is followed, total marketing expenses can be
projected accurately.
Marketing expenditures are unusual because although there is a lag period before
results are realized, the benefits are often extended over a long period.
Depending on the type and scope of the advertising and promotion program
implemented, the lag time can be as short as a few weeks or as long as several
years. However, the favorable results of an effective marketing campaign tend to
linger, and a property often enjoys the benefits of concentrated sales efforts
for many months.
Marketing expense can be divided into five categories: sales, reservations,
advertising and merchandising, other marketing activities, and fees and
commissions. Together, these categories include all marketing efforts made by
hotel personnel and outside parties. Marketing expenses are fixed with the
exception of reservations, fees, and commissions, which are calculated as a
percentage of rooms revenue.
Based on the location of the subject property, the local market for transient
accommodations, the competitive environment, and the hotel's anticipated market
segmentation, we have developed the following marketing forecast using a fixed
and variable component model.
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================================================================================
Table 10-18 Forecast of Marketing Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Marketing Expense (+000) $297 $310
Ratio to Total Revenue 7.4% 7.3%
Amount per Available Room $1,538 $1,606
Amount per Occupied Room $6.69 $6.88
- --------------------------------------------------------------------------------
Franchise Fee
Franchise fee expense represents the fees paid to Ramada Franchise Systems, Inc.
for the use of the company's name, trademarks, and service marks. These fees
equate to 4.0% of gross rooms revenue, yielding the following forecast.
================================================================================
Table 10-19 Forecast of Franchise Fee
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Franchise Fees (+000) $124 $132
- --------------------------------------------------------------------------------
Property Operations and Maintenance
Property operations and maintenance expense is another expense category that is
largely controlled by management. Except for repairs that are necessary to keep
the facility open and prevent damage (e.g., plumbing, heating, and electrical
items), most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone
performing a required repair, they have not eliminated or saved the expenditure;
they have only deferred payment until a later date. A lodging facility that
operates with a lower-than-normal maintenance budget is likely to accumulate a
considerable amount of deferred maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several
years by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face
higher property operations and maintenance costs each year, regardless of the
occupancy trend. The quality of initial construction can also have a direct
impact on future maintenance requirements. The use of high-
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quality building materials and construction methods generally reduces the need
for maintenance expenditures over the long term.
Property operations and maintenance is considered an operating expense; as such,
it includes only those components that can be expensed, rather than capitalized,
under Internal Revenue Service regulations. For example, if a table leg is
broken, the repair of that leg is considered an expense and is chargeable to
property operations and maintenance. If the table is replaced, it becomes a
capital expenditure and does not appear under the property operations and
maintenance category. Appraisers account for capital replacement of items such
as furniture and equipment in the reserve for replacement account, which is
discussed later in this section. Property operations and maintenance costs are
relatively fixed, and are projected as follows.
================================================================================
Table 10-20 Forecast of Property Operations and Maintenance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Prop. Oper. & Maint. Expense (+000) $262 $274
Ratio to Total Revenue 6.5% 6.4%
Amount per Available Room $1,360 $1,420
Amount per Occupied Room $5.91 $6.08
- --------------------------------------------------------------------------------
Energy Expense
The energy consumption of a lodging facility takes several forms, including
water and space heating, air conditioning, lighting, cooking fuel, and other
miscellaneous power requirements. The most common sources of hotel energy are
electricity, natural gas, fuel oil, and steam. This category also includes the
cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity
tends to be the most expensive source, followed by oil and gas. Although all
hotels consume a sizable amount of electricity, many properties supplement their
energy requirements with less expensive sources, such as gas and oil, for
heating and cooking.
A large portion of a hostelry's energy consumption is relatively fixed.
Restaurants, kitchens, public areas, and corridors must be continually lighted
and climate-controlled, regardless of occupancy. The energy cost of an
additional occupied room (i.e., a few hours of light, television, heat, or air
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conditioning) is minimal. The following table presents our forecast of the
subject property's energy expense.
================================================================================
Table 10-21 Forecast of Energy Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Energy Expense (+000) $274 $284
Ratio to Total Revenue 6.8% 6.7%
Amount per Available Room $1,419 $1,474
Amount per Occupied Room $6.17 $6.31
- --------------------------------------------------------------------------------
Property Taxes
The estimate of property taxes was detailed in a previous section of this
report. The following table summarizes these projections.
================================================================================
Table 10-22 Forecast of Property Taxes
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Property Taxes (+000) $131 $136
- --------------------------------------------------------------------------------
Insurance Expense
The insurance expense category consists of the cost of insuring the hotel and
its contents against damage or destruction by fire, weather, sprinkler leakage,
boiler explosion, plate glass breakage, and so forth. It does not include
liability coverage, which is a component of administrative and general expense.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district,
distance from the firehouse, and the area's fire experience. Insurance expenses
do not vary with occupancy.
Based on historical levels, we project the subject property's insurance expense
to equate to approximately $72,000 or $373 per available room in 1997 (the first
projection period). In subsequent years, this amount is assumed to increase in
tandem with inflation. The following table outlines our projection of insurance
expense.
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================================================================================
Table 10-23 Forecast of Insurance Expense
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Insurance Expense (+000) $72 $75
- --------------------------------------------------------------------------------
Reserve for Replacement
Furniture, fixtures, and equipment are essential to the operation of a lodging
facility, and their quality often influences a property's class. This category
includes all non-real estate items that are capitalized, rather than expensed.
The furniture, fixtures, and equipment of a hotel are exposed to heavy use and
must be replaced at regular intervals. The useful life of these items is
determined by their quality, durability, and the amount of guest traffic and
use.
Periodic replacement of furniture, fixtures, and equipment is essential to
maintain the quality, image, and income-producing potential of a lodging
facility. Because capitalized expenditures are not included in the operating
statement but nevertheless affect an owner's cash flow, an appraisal should
reflect these expenses in the form of an appropriate reserve for replacement.
Our industry experience indicates that a reserve for replacement of 3% to 5% of
total revenue is generally sufficient to provide for the timely replacement of
furniture, fixtures, and equipment. Because the reserve for replacement is based
on a percentage of total revenue, it has no fixed component.
Based on an analysis of comparable lodging facilities, we believe that a reserve
for replacement of 4.0% of total revenue is sufficient to provide for the
periodic replacement of the subject property's furniture, fixtures, and
equipment. This amount is consistent with the reserve account contributions that
are being made currently. The following table summarizes the projected reserve
for replacement.
================================================================================
Table 10-24 Forecast of Reserve for Replacement
- --------------------------------------------------------------------------------
1997 Stabilized
- --------------------------------------------------------------------------------
Projected Replacement Reserve (+000) $161 $171
- --------------------------------------------------------------------------------
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Summary of Projections
Based on the preceding analysis, we have formulated a forecast of income and
expense. The table on the following page presents a detailed forecast through
the stabilized year, including amounts per available room (PAR) and per occupied
room (POR). For the purpose of comparison, this table also presents the subject
property's most recent full year of operating history. The second table
illustrates our ten-year forecast of income and expense in less detail. The
forecasts pertain to calendar operating years beginning in 1997, and are
expressed in inflated dollars for each year.
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================================================================================
Table 10-25 Detailed Forecast of Income and Expense through the Stabilized Year
and Most Recent Operating History, Ramada Plaza Pentagon, Alexandria, Virginia
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical 1995 Results 1997
---------------------------------------- ----------------------------------------
No. of Rooms: 193 193
Occupancy: 59.3% 63.0%
Average Rate: $61.29 $69.75
No. of Days Open: 365 365
No. of Occupied Rooms: 41,787 Percent 44,380 Percent
(+000) of Gross PAR POR (+000) of Gross PAR POR
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $2,561 77.4% $13,270 $61.29 $3,096 77.2% $16,041 $69.76
Food 558 16.9 2,890 13.35 700 17.4 3,627 15.77
Beverage 90 2.7 467 2.16 87 2.2 451 1.96
Telephone 63 1.9 328 1.51 93 2.3 482 2.10
Other Income 35 1.0 180 0.83 38 0.9 197 0.86
Total 3,307 99.9 17,135 79.14 4,014 100.0 20,798 90.45
- --------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 666 26.0 3,451 15.94 768 24.8 3,979 17.30
Food & Beverage 512 79.1 2,654 12.26 618 78.5 3,202 13.93
Telephone 41 64.3 211 0.97 50 53.8 259 1.13
Total 1,219 36.9 6,317 29.17 1,436 35.8 7,440 32.36
- --------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,088 63.0 10,819 49.97 2,578 64.2 13,358 58.09
- --------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 454 13.7 2,353 10.87 449 11.2 2,326 10.12
Management Fee 99 3.0 514 2.38 120 3.0 622 2.70
Marketing 268 8.1 1,390 6.42 297 7.4 1,539 6.69
Franchise Fees 75 2.3 390 1.80 124 3.1 642 2.79
Property Oper. & Maint. 250 7.6 1,294 5.98 262 6.5 1,358 5.90
Energy 275 8.3 1,425 6.58 274 6.8 1,420 6.17
Total 1,422 43.0 7,367 34.03 1,526 38.0 7,907 34.38
- --------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 666 20.0 3,452 15.94 1,052 26.2 5,451 23.70
- --------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 107 3.2 554 2.56 131 3.3 679 2.95
Insurance 62 1.9 322 1.49 72 1.8 373 1.62
Total 169 5.1 876 4.05 364 9.1 1,886 8.20
- --------------------------------------------------------------------------------------------------------------------------
NET INCOME $497 14.9% $2,576 $11.90 $688 17.1% $3,565 $15.50
==========================================================================================================================
Food/Rooms 21.8% 22.6%
Beverage/Food 16.2% 12.4%
Telephone/Rooms 2.5% 3.0%
Other Income/Rooms 1.4% 1.2%
</TABLE>
Stabilized
------------------------------------------
No. of Rooms: 193
Occupancy: 64.0%
Average Rate: $73.41
No. of Days Open: 365
No. of Occupied Rooms: 45,085 Percent
(+000) of Gross PAR POR
- --------------------------------------------------------------------------
REVENUE
Rooms $3,310 77.5% $17,150 $73.42
Food 734 17.2 3,803 16.28
Beverage 91 2.1 472 2.02
Telephone 98 2.3 508 2.17
Other Income 39 0.9 202 0.87
Total 4,272 100.0 22,135 94.75
- --------------------------------------------------------------------------
DEPARTMENTAL EXPENSES *
Rooms 800 24.2 4,145 17.74
Food & Beverage 644 78.1 3,337 14.28
Telephone 52 53.1 269 1.15
Total 1,496 35.0 7,751 33.18
- --------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,776 65.0 14,383 61.57
- --------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 469 11.0 2,430 10.40
Management Fee 128 3.0 663 2.84
Marketing 310 7.3 1,606 6.88
Franchise Fees 132 3.1 684 2.93
Property Oper. & Maint. 274 6.4 1,420 6.08
Energy 284 6.6 1,472 6.30
Total 1,597 37.4 8,275 35.42
- --------------------------------------------------------------------------
HOUSE PROFIT 1,179 27.6 6,109 26.15
- --------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 136 3.2 703 3.01
Insurance 75 1.8 389 1.66
Total 382 9.0 1,977 8.46
- --------------------------------------------------------------------------
NET INCOME $797 18.6% $4,132 $17.69
==========================================================================
Food/Rooms 22.2%
Beverage/Food 12.4%
Telephone/Rooms 3.0%
Other Income/Rooms 1.2%
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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================================================================================
Table 10-26 Ten-Year Forecast of Income and Expense, Ramada Plaza Pentagon,
Alexandria, Virginia (+000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998 1999 2000
---------------------- ---------------------- ----------------------- ----------------------
Number of Rooms: 193 193 193 193
Occupied Rooms: 44,380 45,085 45,085 45,085
Occupancy: 63.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $69.75 Gross $73.41 Gross $75.98 Gross $78.64 Gross
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,096 77.2 % $3,310 77.5 % $3,426 77.5 % $3,545 77.5 %
Food 700 17.4 734 17.2 759 17.2 786 17.2
Beverage 87 2.2 91 2.1 94 2.1 98 2.1
Telephone 93 2.3 98 2.3 101 2.3 105 2.3
Other Income 38 0.9 39 0.9 41 0.9 42 0.9
Total 4,014 100.0 4,272 100.0 4,421 100.0 4,576 100.0
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 768 24.8 800 24.2 828 24.2 857 24.2
Food & Beverage 618 78.5 644 78.1 666 78.1 690 78.1
Telephone 50 53.8 52 53.1 54 53.5 56 53.3
Total 1,436 35.8 1,496 35.0 1,548 35.0 1,603 35.0
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 2,578 64.2 2,776 65.0 2,873 65.0 2,973 65.0
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 449 11.2 469 11.0 485 11.0 502 11.0
Management Fee 120 3.0 128 3.0 133 3.0 137 3.0
Marketing 297 7.4 310 7.3 321 7.3 332 7.3
Franchise Fees 124 3.1 132 3.1 137 3.1 142 3.1
Property Oper. & Maint. 262 6.5 274 6.4 284 6.4 294 6.4
Energy 274 6.8 284 6.6 294 6.7 305 6.7
Total 1,526 38.0 1,597 37.4 1,654 37.5 1,712 37.5
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,052 26.2 1,179 27.6 1,219 27.5 1,261 27.5
- ----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 131 3.3 136 3.2 140 3.2 145 3.2
Insurance 72 1.8 75 1.8 78 1.8 80 1.7
Reserve for Replacement 161 4.0 171 4.0 177 4.0 183 4.0
Total 364 9.1 382 9.0 395 9.0 408 8.9
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $688 17.1 % $797 18.6 % $824 18.5 % $853 18.6
==================================================================================================================================
<CAPTION>
2001 2002 2003 2004
----------------------- ---------------------- ---------------------- ----------------------
Number of Rooms: 193 193 193 193
Occupied Rooms: 45,085 45,085 45,085 45,085
Occupancy: 64.0% % of 64.0% % of 64.0% % of 64.0% % of
Average Rate: $81.39 Gross $84.24 Gross $87.19 Gross $90.24 Gross
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rooms $3,669 77.5 % $3,798 77.5 % $3,931 77.5 % $4,068 77.5 %
Food 813 17.2 842 17.2 871 17.2 902 17.2
Beverage 101 2.1 105 2.1 108 2.1 112 2.1
Telephone 108 2.3 112 2.3 116 2.3 120 2.3
Other Income 44 0.9 45 0.9 47 0.9 48 0.9
Total 4,735 100.0 4,902 100.0 5,073 100.0 5,250 100.0
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 887 24.2 918 24.2 950 24.2 983 24.2
Food & Beverage 713 78.0 739 78.0 764 78.0 791 78.0
Telephone 57 52.8 60 53.6 62 53.4 64 53.3
Total 1,657 35.0 1,717 35.0 1,776 35.0 1,838 35.0
- -----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL INCOME 3,078 65.0 3,185 65.0 3,297 65.0 3,412 65.0
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 520 11.0 538 11.0 557 11.0 576 11.0
Management Fee 142 3.0 147 3.0 152 3.0 158 3.0
Marketing 344 7.3 356 7.3 368 7.3 381 7.3
Franchise Fees 147 3.1 152 3.1 157 3.1 163 3.1
Property Oper. & Maint. 304 6.4 315 6.4 326 6.4 337 6.4
Energy 315 6.7 326 6.7 338 6.7 350 6.7
Total 1,772 37.5 1,834 37.5 1,898 37.5 1,965 37.5
- -----------------------------------------------------------------------------------------------------------------------------------
HOUSE PROFIT 1,306 27.5 1,351 27.5 1,399 27.5 1,447 27.5
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 150 3.2 156 3.2 161 3.2 167 3.2
Insurance 83 1.8 86 1.8 89 1.8 92 1.8
Reserve for Replacement 189 4.0 196 4.0 203 4.0 210 4.0
Total 422 9.0 438 9.0 453 9.0 469 9.0
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $884 18.5 % $913 18.5 % $946 18.5 % $978 18.5 %
===================================================================================================================================
</TABLE>
2005 2006
-------------------- -----------------------
Number of Rooms: 193 193
Occupied Rooms: 45,085 45,085
Occupancy: 64.0% % of 64.0% % of
Average Rate: $93.40 Gross $96.67 Gross
- ----------------------------------------------------------------------------
REVENUE
Rooms $4,211 77.5 % $4,358 77.5 %
Food 933 17.2 966 17.2
Beverage 116 2.1 120 2.1
Telephone 124 2.3 129 2.3
Other Income 50 0.9 52 0.9
Total 5,434 100.0 5,625 100.0
- ----------------------------------------------------------------------------
DEPARTMENTAL EXPENSES*
Rooms 1,018 24.2 1,053 24.2
Food & Beverage 819 78.1 847 78.0
Telephone 66 53.2 68 52.7
Total 1,903 35.0 1,968 35.0
- ----------------------------------------------------------------------------
DEPARTMENTAL INCOME 3,531 65.0 3,657 65.0
- ----------------------------------------------------------------------------
OPERATING EXPENSES
Administrative & General 596 11.0 617 11.0
Management Fee 163 3.0 169 3.0
Marketing 394 7.3 408 7.3
Franchise Fees 168 3.1 174 3.1
Property Oper. & Maint. 349 6.4 361 6.4
Energy 362 6.7 375 6.7
Total 2,032 37.5 2,104 37.5
- ----------------------------------------------------------------------------
HOUSE PROFIT 1,499 27.5 1,553 27.5
- ----------------------------------------------------------------------------
FIXED EXPENSES
Property Taxes 173 3.2 179 3.2
Insurance 95 1.7 99 1.8
Reserve for Replacement 217 4.0 225 4.0
Total 485 8.9 503 9.0
- ----------------------------------------------------------------------------
NET INCOME $1,014 18.6 % $1,050 18.5 %
============================================================================
* Departmental expense ratios are expressed as a percentage of departmental
revenues
- --------------------------------------------------------------------------------
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The conversion of a property's projected net income into an estimate of value is
based on the premise that investors typically purchase real estate with a small
amount of equity cash (25% to 40%) and a large amount of mortgage financing (60%
to 75%). The amounts and terms of available mortgage financing and the rates of
return that are required to attract sufficient equity capital form the basis for
allocating the net income between the mortgage and equity components and
deriving a value estimate.
Mortgage Component
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
The following table summarizes the average mortgage interest rates of the hotel
loans made by these lenders. In addition, the average A corporate bond yield (as
reported by Moody's Bond Record) is shown for the purpose of comparison.
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================================================================================
Table 10-27 Average Mortgage Interest Rates and Average A Corporate Bond Yields
- --------------------------------------------------------------------------------
Average A
Average Corporate
Period Interest Rate Bond Yield
- --------------------------------------------------------------------------------
1st Quarter 1996 7.79 % 7.37 %
4th Quarter 1995 8.44 7.28
3rd Quarter 1995 8.61 7.67
2nd Quarter 1995 9.25 7.87
1st Quarter 1995 9.14 8.50
3rd Quarter 1994 9.64 8.48
2nd Quarter 1994 9.38 8.28
4th Quarter 1993 9.38 7.80
3rd Quarter 1993 8.41 7.28
2nd Quarter 1993 10.53 9.65
4th Quarter 1992 9.43 8.48
3rd Quarter 1992 9.99 8.38
2nd Quarter 1992 9.47 8.79
1st Quarter 1992 10.02 8.81
4th Quarter 1991 10.49 8.97
3rd Quarter 1991 10.03 9.29
2nd Quarter 1991 10.75 9.45
3rd Quarter 1990 10.47 9.89
2nd Quarter 1990 10.58 9.83
4th Quarter 1989 9.96 9.42
3rd Quarter 1989 9.55 9.46
2nd Quarter 1989 10.54 9.93
1st Quarter 1989 10.39 10.16
4th Quarter 1988 10.07 10.03
3rd Quarter 1988 10.66 10.51
2nd Quarter 1988 10.09 10.33
4th Quarter 1987 10.41 10.45
3rd Quarter 1987 10.00 9.95
2nd Quarter 1987 9.81 9.46
1st Quarter 1987 9.43 9.19
4th Quarter 1986 9.44 9.55
3rd Quarter 1986 9.56 9.71
2nd Quarter 1986 9.80 9.91
1st Quarter 1986 10.99 10.62
Source: American Council of Life Insurance; Moody's Bond Record
- --------------------------------------------------------------------------------
Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it is necessary to update this information to reflect
current lending practices. Research by HVS International indicates that there is
a close mathematical relationship between the average interest rate of a
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hotel mortgage and the concurrent yield on an average A corporate bond. Through
a regression analysis, this relationship is expressed as follows.
Y = 2.76078 + 0.782280 X
Where: Y = Estimated Hotel/Motel Mortgage Interest Rate
X = Current Average A Corporate Bond Yield
(Coefficient of correlation is 96.4%)
The average yield on A corporate bonds for the third quarter of 1996, as
reported by Moody's Bond Record, was 7.91%. Using a factor of 7.91% in the
equation presented above produces an estimated hotel/motel interest rate of
8.95%.
In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS International constantly monitors the terms of hotel mortgage
loans made by our institutional lending clients. In the past year, we have noted
an increase in the availability of debt financing, and many lenders have
returned to the market. The current level of lending activity represents a
significant increase from the restricted environment of the early 1990s.
Nonetheless, the market for hotel mortgage loans remains somewhat tight,
particularly when compared to the conditions that prevailed in the mid-to late
1980s. In the current lending climate, strong hotel projects that are structured
on an economic basis can secure mortgage financing at interest rates ranging
from 8% to 11%, depending on the property, location, affiliation, and operator.
In the 1980s, when hotel mortgages were widely available, loan-to-value ratios
typically ranged from 75% to 80%. Amortization schedules were generally based on
30 years, although the term of the loan was more likely to be seven to ten
years. The few loans that were underwritten in the early 1990s were based on far
more stringent parameters: loan-to-value ratios declined to a range of 50% to
65%, and amortization periods of 20 to 25 years were most common.
With the recent reemergence of hotel financing, loan-to-value requirements and
amortization schedules have loosened somewhat. At present, we find that lenders
who are active in the market are using loan-to-value ratios of 65% to 75%, and
amortization periods of 25 to 30 years. The exact terms offered depend on
specific factors such as the property's location, the age and quality of the
physical facility, local hostelry market conditions, and
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(perhaps more significantly) the profile of the borrower. The strongest projects
typically command the highest loan-to-value ratios.
Based on the preceding analysis of the current lodging industry mortgage market
and adjustments for specific factors such as the property's location and
conditions in the local hotel market, it is our opinion that a 25-year
amortization mortgage with a 9.5% interest rate and a 0.111856 constant is
appropriate for the subject property. We believe that a mortgage lender will
lend up to 70% of the hotel's market value as determined by this appraisal.
Equity Component
The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a
ten-year holding period is known as the equity yield. Unlike the equity
dividend, which is a short-term rate of return, the equity yield specifically
considers a long-term holding period (generally ten years), annual
inflation-adjusted cash flows, property appreciation, mortgage amortization, and
proceeds from a sale at the end of the holding period.
It is difficult to quantify the rate of return required by equity investors who
are seeking to purchase hotel properties. To establish an appropriate equity
yield rate, HVS International uses two sources of data: past appraisals and
investor interviews.
Past Appraisals - During the past 12 months, HVS International has appraised
more than 400 hotels, including properties located in most major national
markets. Each appraisal used a similar mortgage-equity approach in which income
is projected and then discounted to a current value at rates reflecting the cost
of debt and equity capital. In the case of hotels that were sold subsequent to
our valuations, we are able to determine an appropriate equity yield rate by
excluding incentive management fees from the projection of income and expense,
inserting the projection into a valuation model, and adjusting the appraised
value to reflect the actual sales price by modifying the return assumptions. The
following table shows a representative sample of hotels that were sold shortly
after we appraised them, along with the imputed equity return based on our
valuation approach.
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Table 10-28 Sample of Hotels Sold
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<TABLE>
<CAPTION>
No. of Date of Overall Total Property Equity
Hotel City and State Rooms Sale Sales Price Rate Yield Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ritz-Carlton Phoenix, AZ 281 2/94 $23,000,000 11.0% 14.6% 21.7%
Marriott Marina Fort Lauderdale, FL 580 2/94 40,000,000 12.2 16.4 26.7
Holiday Inn Edison, NJ 274 3/94 11,803,000 7.8 17.0 26.3
Crescent Hotel Phoenix, AZ 342 3/94 26,000,000 6.5 7.2 2.2
Checkers Hotel Kempinski Los Angeles, CA 173 4/94 12,750,000 3.0 18.3 27.0
Best Western Fireside Inn Cambria, CA 46 4/94 3,377,000 11.7 15.8 24.3
Phoenician Resort Phoenix, AZ 580 4/94 224,000,000 6.6 9.3 8.9
Newark-Fremont Hilton Newark, CA 300 5/94 8,950,000 8.8 14.9 20.7
Radisson Inn Orlando, FL 299 5/94 11,150,000 12.9 18.0 28.2
Westin Kauai Lihue, Kauai, HI 840 6/94 97,400,000 (1.9) 8.1 7.2
Residence Inn Binghamton, NY 72 6/94 6,325,000 10.8 13.9 21.9
Hotel Millenium New York, NY 561 6/94 75,000,000 9.5 14.1 23.0
Best Western Otay Valley Chula Vista, CA 120 7/94 2,350,000 13.2 21.1 31.8
Hampton Inn Islandia, NY 121 7/94 6,572,000 12.6 16.6 28.2
Hampton Inn Willow Grove, PA 150 7/94 10,220,000 11.0 14.3 23.0
Hampton Inn West Palm Beach, FL 136 7/94 4,220,000 10.8 10.8 14.3
Hampton Inn Naples, FL 107 7/94 5,700,000 11.4 11.5 24.9
Hampton Inn Albany, NY 126 7/94 9,204,000 9.3 11.5 15.8
Marriott Hotel South Bend, IN 299 7/94 11,500,000 10.5 13.2 18.9
Marriott SFO Burlingame, CA 684 8/94 61,700,000 10.2 13.2 19.0
Westfields Conference Center Chantilly, VA 340 8/94 46,000,000 12.3 15.9 25.3
Radisson Mark Resort Vail, CO 349 9/94 25,200,000 8.9 15.8 24.1
Marriott East Side New York, NY 664 10/94 55,000,000 8.5 9.7 11.1
Marriott Resort Vail, CO 349 10/94 25,200,000 14.2 18.9 30.5
Marriott Quorum Addison, TX 547 10/94 29,815,000 13.5 18.2 31.8
Sheraton Hotel Hasbrouck Heights, NJ 338 11/94 10,450,000 18.3 21.1 30.7
Sheraton Inn Napa, CA 191 12/94 9,968,000 8.9 13.7 19.8
Marriott Fisherman's Wharf San Francisco, CA 255 12/94 27,755,000 10.8 13.4 19.4
Marriott Hotel Portland, OR 503 12/94 45,000,000 12.9 17.4 30.0
Radisson Inn Springfield, MO 199 12/94 5,800,000 8.2 10.1 11.3
Williamsburg Hilton Williamsburg, VA 291 12/94 15,000,000 15.4 19.0 32.0
Marriott Tech Center Denver, CO 625 12/94 36,000,000 13.7 16.4 27.1
Holiday Inn Sunspree Singer Island, FL 222 12/94 11,900,000 8.6 10.6 12.4
The Plaza New York, NY 805 6/95 325,000,000 7.0 11.0 14.0
Fullerton Suites Fullerton, CA 96 5/95 5,000,000 12.9 18.7 28.5
Residence Inn Baton Rouge, LA 80 6/95 6,518,000 12.7 14.8 21.2
Residence Inn Overland Park, KS 112 6/95 8,500,000 8.9 14.7 20.8
Residence Inn Des Moines, IA 112 6/95 7,660,000 9.8 14.1 19.6
Residence Inn Hunt Valley, MD 96 6/95 6,580,000 12.3 13.6 18.3
Residence Inn Kansas City, MO 112 6/95 6,560,000 10.4 13.2 19.8
Residence Inn Lincoln, NE 120 6/95 7,100,000 10.0 13.7 18.5
Embassy Suites Schaurmburg, IL 209 12/95 17,800,000 10.0 13.5 18.9
Marriott Hotel Andover, MA 293 12/95 24,000,000 9.7 13.5 19.2
Doubletree Suites Valley Forge, PA 229 12/95 28,500,000 10.7 14.2 15.5
Marriott Hotel Tysons Corner, VA 390 12/95 41,100,000 10.7 13.1 18.0
Marriott Hotel Warner Center, CA 461 12/95 57,900,000 6.2 11.6 14.2
Hilton at the Club Pleasanton, CA 294 12/95 22,000,000 10.5 13.4 17.0
</TABLE>
Source: HVS International
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Investor Interviews - HVS International is in constant contact with numerous
institutional and individual hotel investors. These sources of equity funds have
definite return requirements that can be expressed as an equity yield rate based
on a ten-year projection of net income before incentive management fees but
after debt service. Based on our surveys and investor interviews, the following
table illustrates the range of equity yields generally required by individual
and institutional investors.
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Table 10-29 Equity Yield Requirements
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Source Equity Yield Requirement
------ ------------------------
Individual 20% - 24%
Institution 18% - 22%
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Based on the assumed 70% loan-to-value ratio, the risk inherent in achieving the
projected income stream, and the age, condition, and anticipated market position
of the subject property, it is our opinion that an equity investor is likely to
require an equity yield rate of 22.0% before payment of incentive management
fees. This estimate is well supported by the equity yield requirements presented
previously.
Terminal Capitalization Rate
Inherent in this valuation process is the assumption of a sale at the end of the
ten-year holding period. The estimated reversionary sales price as of that date
is calculated by capitalizing the projected 11th-year net income by an overall
terminal capitalization rate. A percentage for the seller's brokerage and legal
fees is deducted from this sales price, and the net proceeds to the equity
interest (also known as the equity residual) are calculated by deducting the
outstanding mortgage balance from the reversion.
To estimate a property's reversionary value, the appraiser must select a
terminal capitalization rate and an allocation for brokerage and legal fees. The
terminal capitalization rate is an overall rate that is applied to one
stabilized year, and thus it inherently incorporates the cost of debt and equity
capital. The terminal capitalization rate can be derived through a mortgage and
equity band of investment technique which calculates the weighted average cost
of the capital used in a hotel investment. Combining the mortgage financing
terms derived previously (namely, a 70% loan-to-value ratio and a 0.111856 debt
service constant) with a cash-on-cash equity dividend rate of 12% produces the
following overall capitalization rate. Because this overall rate will be used to
capitalize net income ten years from the date of value, an
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upward adjustment is appropriate to reflect the uncertainty inherent in this
extended period. For the purpose of this valuation, we will use a terminal
capitalization rate of 11.5%.
As a point of reference, the terminal capitalization rate can be compared to the
going-in rate implied by the subject property's estimated value. The going-in
rate reflects the capitalization rate that would be applicable if the hotel were
operating at a stabilized level as of the date of value. This rate is calculated
by dividing the stabilized net income (expressed in current dollars as of the
date of value) by the value indicated by the income capitalization approach.
Generally, the terminal capitalization rate is approximately 100 to 200 basis
points above the going-in rate.
Summary of Valuation Variables
The following table summarizes the valuation variables that have been used to
estimate the subject property's value via the income capitalization approach.
================================================================================
Table 10-30 Summary of Valuation Variables
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Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
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Valuation of the Mortgage and Equity Components
The valuation of the mortgage and equity components is accomplished through use
of an algebraic equation that calculates the exact amount of debt and equity
that the hotel will be able to support based on the anticipated cash flow (as
derived from the forecast of income and expense) and the specific return
requirements demanded by the mortgage lender (interest) and the equity investor
(equity yield). The equation and the calculations associated with this
simultaneous valuation formula are set forth in the Addenda to this report.
Using the variables summarized above, we estimate the value of the subject
property via the income capitalization approach at $6,700,000.
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Proof of Value
The value is proven by calculating the yields to the mortgage and equity
components during the projection period. If the mortgagee achieves a 9.5% yield
and the equity yield is 22.0%, then roundly $6,700,000 is the correct value by
the income capitalization approach. Using the assumed financial structure set
forth in the previous calculations, market value can be allocated between the
debt and equity as follows.
Mortgage Component (70%) $4,705,000
Equity Component (30%) 2,016,000
-------------
Total $6,721,000
The annual debt service is calculated by multiplying the mortgage component by
the mortgage constant.
Mortgage Component $4,705,000
Mortgage Constant 0.111856
-----------
Annual Debt Service $526,281
The cash flow to equity is calculated by deducting the debt service from the
projected net income before debt service.
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Table 10-31 Forecast of Net Income to Equity
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Net Income
Available for Net Income
Year Debt Service Debt Service to Equity
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1997 $688,000 - $526,000 = $162,000
1998 797,000 - 526,000 = 271,000
1999 824,000 - 526,000 = 298,000
2000 853,000 - 526,000 = 327,000
2001 884,000 - 526,000 = 358,000
2002 913,000 - 526,000 = 387,000
2003 946,000 - 526,000 = 420,000
2004 978,000 - 526,000 = 452,000
2005 1,014,000 - 526,000 = 488,000
2006 1,050,000 - 526,000 = 524,000
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The equity residual at the end of the tenth year is calculated as follows.
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Reversionary Value ( $1,087,000 / 0.115) $9,452,000
Less: Brokerage and Legal Fees 284,000
Less: Mortgage Balance 3,389,000
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Net Sale Proceeds to Equity $5,779,000
The overall property yield (before debt service), the yield to the lender, and
the yield to the equity position have been calculated by computer with the
following results.
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Table 10-32 Overall Property Yields
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Projected Yield
(Internal Rate of Return)
Position Value Over 10-Year Holding Period
- ---------------------------------------------------------------------
Total Property $6,721,000 14.6%
Mortgage 4,705,000 9.5
Equity 2,016,000 22.0
The following tables demonstrate that the property receives its anticipated
yields, proving that the value of roundly $6,700,000 is correct based on the
assumptions used in this approach.
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Table 10-33 Total Property Yield
- --------------------------------------------------------------------------------
Net Income Before Present Worth of $1 Discounted
Year Debt Service Factor at 14.6% Cash Flow
- ------------------------------------------------------------------------------
1997 $688,000 x 0.872908 = $601,000
1998 797,000 x 0.761969 = 607,000
1999 824,000 x 0.665129 = 548,000
2000 853,000 x 0.580596 = 495,000
2001 884,000 x 0.506807 = 448,000
2002 913,000 x 0.442396 = 404,000
2003 946,000 x 0.386171 = 365,000
2004 978,000 x 0.337092 = 330,000
2005 1,014,000 x 0.294251 = 298,000
2006 10,219,000* x 0.256854 = 2,625,000
-----------
Total Property Value $6,721,000
*Tenth-year net income of $1,050,000 plus sales proceeds of $9,169,000
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Table 10-34 Mortgage Component Yield
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Present Worth of $1 Discounted
Year Debt Service Factor at 9.5% Cash Flow
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1997 $526,000 x 0.914314 = $481,000
1998 526,000 x 0.835969 = 440,000
1999 526,000 x 0.764338 = 402,000
2000 526,000 x 0.698845 = 368,000
2001 526,000 x 0.638963 = 336,000
2002 526,000 x 0.584213 = 307,000
2003 526,000 x 0.534154 = 281,000
2004 526,000 x 0.488384 = 257,000
2005 526,000 x 0.446536 = 235,000
2006 3,915,000 * x 0.408274 = 1,598,000
-----------
Value of the Mortgage Component $4,705,000
* Tenth-year debt service fo $526,000 plus outstanding mortgage balance of
$3,389,000
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Table 10-35 Equity Component Yield
- --------------------------------------------------------------------------------
Net Income Present Worth of $1 Discounted
Year to Equity Factor at 22.0% Cash Flow
- ------------------------------------------------------------------------------
1997 $162,000 x 0.819610 = $133,000
1998 271,000 x 0.671761 = 182,000
1999 298,000 x 0.550582 = 164,000
2000 327,000 x 0.451263 = 148,000
2001 358,000 x 0.369860 = 132,000
2002 387,000 x 0.303141 = 117,000
2003 420,000 x 0.248458 = 104,000
2004 452,000 x 0.203638 = 92,000
2005 488,000 x 0.166904 = 81,000
2006 6,303,000 * x 0.136796 = 862,000
-----------
Value of the Equity Component $2,015,000
* Tenth-year net income ot equity of $524,000 plus sales proceeds of $5,779,000
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Valuation Method Two: Discounted Cash Flow
The total property yield derived from the previous valuation method was 14.6%.
After reviewing the total property yields indicated by recent hotel sales, it is
our opinion that a 15.0% discount factor is appropriate for the
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Ramada Plaza Pentagon. The following table illustrates the discounted cash flow
analysis using this 15.0% factor.
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Table 10-36 Discounted Cash Flow Analysis
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Discount
Net Factor Discounted
Year Income at 15.0% Cash Flow
- -----------------------------------------------------------------------------
1997 $688,000 x 0.86957 = $598,261
1998 797,000 x 0.75614 = 602,647
1999 824,000 x 0.65752 = 541,793
2000 853,000 x 0.57175 = 487,706
2001 884,000 x 0.49718 = 439,504
2002 913,000 x 0.43233 = 394,715
2003 946,000 x 0.37594 = 355,636
2004 978,000 x 0.32690 = 319,710
2005 1,014,000 x 0.28426 = 288,242
2006 10,218,609 * x 0.24718 = 2,525,884
-----------
Estimated Market Value $6,554,098
(Say) $6,600,000
Reversion Analysis
11th-Year Net Income $1,087,000
Capitalization Rate 11.5%
-----------
Total Sales Proceeds $9,452,174
Less: Brokerage & Legal Fees at 3.0% 283,565
-----------
Net Sales Proceeds $9,168,609
*Tenth-year net income of $1,050,000 plus sales proceeds of $9,168,609
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Conclusion
Based on our extensive experience in the hotel industry and comprehensive
support provided by literature published by the Appraisal Institute, it is our
opinion that the valuation procedure embodied by Method One most closely
reflects the investment rationale of typical hotel buyers. As stated in the
textbook entitled Hotels and Motels: A Guide to Market Analysis, Investment
Analysis and Valuations,(1) Method Two (which discounts the projected net income
and reversion using an overall discount rate, or total property yield) "does not
consider the impact of mortgage debt, leverage and the specific equity demands
of typical hotel investors...This technique is simple but less reliable because
the derivation of the discount rate has little support." In light
(1) Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and
Valuations, Stephen Rushmore, Appraisal Institute, Chicago, IL, 1992,
p. 236
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of this consideration, we have relied on the $6,700,000 value conclusion
indicated by Method One.
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11. Sales Comparison Approach
The sales comparison approach is based on the assumption that an informed
purchaser will pay no more for a property than the cost to acquire an existing
property with equal utility. This approach estimates market value by considering
the sales prices indicated by recent transactions involving properties that are
similar to the property being appraised. Dissimilarities are resolved with
appropriate adjustments; these differences may pertain to the date of sale, the
age of the property, location, construction, condition, layout, equipment, size,
or external economic factors. The reliability of the sales comparison approach
depends on three factors:
1. the availability of timely, comparable sales data;
2. an understanding of the true terms of the sales and the motivation of the
buyer and seller;
3. the degree of comparability, or the extent of the adjustments needed to
reflect differences between the subject property and the comparable
property.
In appraising lodging facilities, it is often difficult to find an adequate
number of recent sales involving hotels that are truly comparable to the subject
property. Consequently, it may be necessary to consider transactions involving
properties in different market areas, and the required adjustments greatly
diminish the reliability of the conclusions. Moreover, it is virtually
impossible for an observer to determine the true motivations of the buyers and
sellers involved in transactions. Hotel acquisition often represents a highly
ego-driven process in which a number of external, non-market factors influence
the purchase price. Unless the appraiser can quantify these influences, there is
no way of knowing whether the purchase price paid actually reflects market
value. A final consideration is the degree of similarity between the subject
property and the comparable; in most cases, the differences are significant
enough to require numerous subjective and unsubstantiated adjustments. Each
adjustment represents a potential for error,
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and thus diminishes the reliability of this approach. As a result of these
shortcomings, the use of the sales comparison approach in valuing hotels is
primarily as a check against the value indicated by the income capitalization
approach.
Hotel values declined in many areas of the country during the late 1980s and
early 1990s, although a rebound began in 1994 and 1995. The downturn, which
began in most markets in 1988, was largely attributable to lower operating
incomes caused by an oversupply of new hotel rooms constructed during the
mid-1980s. Overbuilding resulted in flat or declining average rates and
occupancies, which caused revenues to fall. A number of other factors
exacerbated the situation. The national recession caused a drop in demand in
many markets during the early 1990s, and the Persian Gulf War created a virtual
freeze on travel in the beginning of 1991, further limiting hotel demand.
Operating costs continued to rise despite poor market conditions, resulting in a
decline in the net operating income of hotels throughout the nation. Because
operating costs have a large fixed component, many lodging facilities
experienced precipitous drops in net income.
As bottom-line profits eroded, many hotels were unable to meet debt service, and
hundreds of properties entered foreclosure or bankruptcy. Lenders and government
agencies soon became hotel owners. Because most financial institutions were
preoccupied with their distressed real estate, very little mortgage capital was
available and the nation suffered from a well-publicized credit crunch. Most
hotel transactions that occurred during the early 1990s were financed by the
property owners, who, in most cases, were lenders.
In the early 1990s, the primary market participants were owner-operators with
the expertise to turn around under-performing properties. Hotels were out of
favor with passive investors as a result of the industry's poor operating
performance and the uncertainty of future appreciation. The wide disparity in
buyer and seller expectations also limited the number of transactions. Many
sellers were unwilling to accept the fact that the market value of their hotel
investments had declined below the cost of the project or the original
investment. Moreover, many owners were faced with a significant tax burden upon
sale, further reducing their willingness to settle for a price that was below
the original acquisition cost.
As a result of these market forces, there was very little sales activity
involving large, high-quality hotels. The primary difficulty was the lack of
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properties available for sale; owners who were not forced to sell opted to wait
for prices to recover. The few hotels that did enter the market generally
attracted 15 to 20 interested bidders, mostly consisting of owner-operators. As
a result of the competition for these few assets, the prices of better-quality
hotels began to escalate rapidly. In response, more sellers have been encouraged
to place their products on the market.
An indicator of this market trend is the number of hotel sales that have
occurred during the past few years. HVS International tracks major hotel
transactions of more than $10,000,000 on an annual basis. In 1992, the number of
major transactions was 67; a slightly lower level of 52 was registered in 1993.
This total increased significantly (to 92) in 1994, and the 1995 total is
estimated to have been 104.
In tandem with escalating prices, hotels are again being considered by
traditional financing sources, which had virtually abandoned the hospitality
industry by the early 1990s. Although many lenders are still approaching the
market with a high degree of caution, it is now possible to obtain third-party
financing for hotel transactions. The mortgage loans that are now being made are
subject to fairly stringent requirements: loan-to-value ratios remain in the 65%
to 75% range. The qualification of the borrower is also a crucial consideration
for most lenders.
We believe that the upward trend in both pricing and sales activity will
continue as financing becomes more available and additional buyers (particularly
passive investors) enter the market. Consequently, it is important to consider
the date of the transactions used in the sales comparison approach. When the
comparable sales are not recent enough to provide an accurate picture of the
current market, it may be necessary to make upward adjustments to the values
indicated by the sales comparison and income capitalization approaches in
recognition of the recent escalation.
Comparable Sales
Based on information provided by the Hospitality Market Data Exchange and
compiled by the six offices of HVS International, the following transactions
involved hotels that appear to have some degree of comparability to the subject
property.
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Sale #1:
Property: Courtyard by Marriott
Location: Crystal City, Virginia
Date of Sale: November 1, 1996
Sales Price: $28,000,000
Grantor: Rahn Properties
Grantee: HEI
Year Opened: 1990
Number of Rooms: 272
Price per Room: $102,941
Confirmed By: HEI
Comments: All cash transaction
Sale #2:
Property: Comfort Inn
Location: Alexandria, Virginia
Date of Sale: August 8, 1996
Sales Price: $3,417,500
Grantor: Not available
Grantee: Not available
Year Opened: 1985
Number of Rooms: 188
Price per Room: $18,178
Sale #3:
Property: Ramada Hotel
Location: Montvale, New Jersey
Date of Sale: May 1996
Sales Price: $6,700,000
Grantor: Lennar Corporation
Grantee: Gami Lovale
Year Opened: 1970
Number of Rooms: 187
Price per Room: $35,829
Confirmed by: Grantee
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Sale #4:
Property: Days Inn
Location: Bensalem, Pennsylvania
Date of Sale: July, 1995
Sales Price: $4,950,000
Grantor: South Charles Realty
Grantee: Growth Property Investment Managers
Number of Rooms: 136
Price per Room: $36,397
Confirmed By: Landauer Hotel Group
Sale #5:
Property: Holiday Inn
Location: Waterbury, Connecticut
Date of Sale: June, 1995
Sales Price: $7,850,000
Grantor: Buckingham Development Corporation
Grantee: Oakdale College Limited Partnership
Year Opened: 1990
Number of Rooms: 205
Price per Room: $38,293
Confirmed By: Arthur Anderson
Sale #6:
Property: Ramada Inn
Location: Germantown, Maryland
Date of Sale: May, 1995
Sales Price: $5,350,000
Grantor: Goldenrod Limited Partnership
Grantee: Inn Keepers USA Limited Partnership
Year Opened: NA
Number of Rooms: 180
Price per Room: $29,722
Confirmed By: Eastdil Corp.
Comments: This property was subsequently
renovated and converted to a
Hampton Inn
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Sale #7:
Property: Ramada Hotel
Location: Falls Church, Virginia
Date of Sale: April, 1995
Sales Price: $16,625,000
Grantor: Renaissance Hotel Operating Company
Grantee: Tysons Corner Pt. L.P.
Year Opened: 1975
Number of Rooms: 404
Price per Room: $41,151
Confirmed By: Blake and Associates
Sale #8:
Property: Comfort Inn
Location: Abingdon, Virginia
Date of Sale: February, 1995
Sales Price: $2,600,000
Grantor: B&R Enterprises
Grantee: MRS
Year Opened: NA
Number of Rooms: 80
Price per Room: $32,500
In addition to considering the transactions outlined
above, we have also reviewed the October, 1994 sale of
the subject property. The details of this transaction
are summarized as follows.
Subject Property:
Property: Ramada Plaza Pentagon
Location: Alexandria, Virginia
Date of Sale: October 4, 1994
Sales Price: $2,900,000
Grantor: Ramada Assured Income Associates, L.P.
Grantee: Alexandria Virginia Hotel Ltd.
Partnership (an entity controlled
by the Ashford Financial Corporation)
Year Opened: 1975
Number of Rooms: 193
Price per Room: $15,029
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It is important to consider the terms and conditions pertaining to the subject
property's sale. According to information provided by the Ashford Financial
Corporation, the subject property was one of six Ramadas that were purchased as
a package from an investment partnership sponsored by Lehman Brothers. The price
set forth above represents an allocation of the total package price rather than
a negotiated value for this single asset. The total package price was
$20,250,000, and was paid in cash. At the time of the transaction, the hotels
were generating virtually no operating income as a group, and all were in
extremely poor condition. Reports indicate that the previous owners were
strongly motivated to sell as a result of the hotels' poor performance. Based on
our understanding of the terms of this transaction, we do not believe that this
sale was reflective of the market value of the individual hotel.
The relevance of the transaction involving the subject property is also
undermined by the significant change in market conditions that occurred between
the date of this sale and the date of value of this appraisal. Areawide
occupancy and average rate have improved in the intervening months, and this
favorable trend is expected to continue. As previously discussed, the market for
hotel investments has also improved significantly as a result of changes in
lender and investor attitudes. Finally, the property itself has undergone a
significant renovation, in which approximately $2,400,000 was spent to upgrade
the facilities and amenities. For these reasons, it is our opinion that the
October, 1994 sale of the subject property is not a reliable indicator of the
hotel's current value.
Conclusion
Although the sales comparison approach may be useful in providing a value range
and reflecting certain market characteristics, its applicability is limited by
the numerous possible points of difference between the subject property and
other hotels that have sold in recent years. These factors may include location,
access, size, services and facilities offered, market conditions, chain
affiliation, market orientation, management, rate structure, age, physical
condition, date of sale, the highest and best use of the land, and the
anticipated profitability of the operation. Circumstances surrounding a sale,
such as financing terms, tax considerations, income guarantees, sales of partial
interests, duress on the part of the buyer or seller, or a particular deal
structure can also cause a disparity between the sales price and pure market
value. Moreover, it is often difficult to determine the marketing periods that
were necessary to consummate the transactions. It is extremely difficult to
quantify the appropriate adjustment factors accurately because of their number
and complexity, as well as the difficulty in obtaining specific,
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detailed information. Any attempt to manipulate the necessary adjustments is
insupportable and purely speculative.
Because appraisers are expected to reflect the analytical processes and actions
of typical buyers and sellers rather than to create a highly subjective
valuation approach, the investment rationale of hotel owners is an essential
consideration. As specialists in the valuation of hotels, we find that typical
buyers purchase properties based on a thorough analysis of the anticipated
economic benefits of property ownership, rather than on historical sales data.
In light of these factors, it is our opinion that the sales comparison approach
is unsuitable for indicating a specific estimate of the subject property's
market value; however, this approach may indicate a range of values that can be
used to test the reasonableness of the value indicated by the income
capitalization approach. The overall range of prices indicated by the eight
comparable hotel sales is $18,178 to $102,941 per room; however, because a
majority of the prices fall in a much narrower range, we have eliminated the two
sales that form the high and low ends of the overall range (the sales of the
Courtyard by Marriott in Alexandria and the Comfort Inn in Alexandria).
Excluding these transactions and the prior sale of the subject property yields a
range of roundly $29,700 to $41,200 per room, or approximately $5,700,000 to
$8,000,000 for the 193-unit subject property. The income capitalization approach
indicates a value of $6,700,000, which falls within this range.
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12. Cost Approach
The cost approach is founded on the principle of substitution, which implies
that no prudent person will pay more for a property than the amount needed to
acquire a site and construct a building of equal desirability and utility
without undue delay. This approach estimates market value by first calculating
the current cost of replacing the improvements. Appropriate deductions are made
for depreciation resulting from physical deterioration, functional obsolescence,
and external (economic) obsolescence, and the land value is added to the
depreciated replacement cost to provide an estimate of market value. The cost
approach employs the following steps.
1. The current replacement or reproduction cost is estimated.
2. Land value is estimated using techniques such as allocation, extraction,
or ground rent capitalization.
3. Accrued depreciation, which can be divided into physical deterioration,
functional obsolescence, and external obsolescence, is estimated.
4. Total depreciation is deducted from the subject property's replacement
cost, and the land value is added to arrive at an estimate of value via
the cost approach.
When forming their purchase decisions regarding existing properties, market
participants tend to consider the cost of developing a new hotel with optimal
physical and functional utility. External conditions, such as a depressed market
for real estate, can cause a property to be worth less than its replacement cost
as new. The task of estimating the loss in value resulting from incurable
functional and external obsolescence is highly subjective.
The cost approach may provide a reliable estimate of value in the case of new
properties; however, as buildings and other improvements age and begin to
deteriorate, the loss in value resulting from physical obsolescence becomes
increasingly difficult to quantify accurately. Loss in value
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attributable to functional obsolescence can be even more difficult to determine.
The subject property was constructed in 1975, and thus is approximately 21 years
old as of the date of this appraisal. The property is in moderate to good
physical condition following a renovation in 1995, but some signs of physical
deterioration remain. The depressed hotel market conditions that prevailed in
the late 1980s and the early 1990s have also led to a degree of external
obsolescence. In our opinion, it is impossible to identify and quantify the
impact of these factors on the property's value with any accuracy, so we will
only estimate the hotel's replacement cost.
Replacement Cost
Replacement cost is the current construction cost of a building with the same
utility as the subject property, but built with modern materials and according
to current construction and design standards. For the purpose of estimating the
replacement cost of the subject property, we have used a hotel development cost
survey conducted by HVS International. This survey is published annually in a
newsletter entitled The Hotel Valuation Journal, and appeared in the May issue
of Lodging Hospitality. The survey presents the range of per-room costs
associated with various components of hotel development, including the
improvements, the furniture, fixtures, and equipment, pre-opening expenses, and
operating capital. Statistics are compiled for three broad categories of hotels:
luxury, standard, and economy. The results of this survey are presented in the
following table.
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Table 12-1 Hotel Development Cost Survey (Amounts per Room)
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<TABLE>
<CAPTION>
Improvements Furniture & Equipment Pre-Opening Operating Capital Total Percent Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1976
Luxury $32,000 - $55,000 $5,000 - $10,000 $1,000 - $2,000 $1,000 - $1,500 $39,000 - $68,500 --- - ---
Standard 20,000 - 32,000 3,000 - 6,000 750 - 1,000 750 - 1,000 24,500 - 40,000 --- ---
Economy 8,000 - 15,000 2,000 - 4,000 500 - 1,000 500 - 750 11,000 - 20,750 --- - ---
1979
Luxury 36,000 - 65,000 8,000 - 15,000 1,500 - 3,000 1,500 - 2,000 47,000 - 85,000 6.8 - 8.0
Standard 25,000 - 36,000 5,000 - 10,000 1,000 - 2,000 1,000 - 1,500 32,000 - 49,500 10.2 - 7.9
Economy 10,000 - 20,000 3,000 - 5,000 750 - 1,000 750 - 1,000 14,500 - 27,000 10.6 - 10.0
1981
Luxury 45,000 - 80,000 10,000 - 20,000 2,000 - 3,500 2,000 - 2,500 59,000 - 106,000 12.8 - 12.4
Standard 25,000 - 40,000 7,000 - 13,000 1,200 - 2,500 1,200 - 2,000 34,400 - 57,500 3.8 - 8.1
Economy 13,000 - 25,000 4,000 - 7,000 700 - 1,200 900 - 1,200 18,600 - 34,400 14.1 - 13.7
1983
Luxury 55,000 - 100,000 12,500 - 20,000 2,300 - 4,000 2,000 - 2,800 71,800 - 126,800 10.8 - 9.8
Standard 35,000 - 50,000 9,000 - 15,000 1,400 - 3,000 1,300 - 2,200 46,700 - 70,200 17.9 - 11.0
Economy 18,000 - 32,000 5,000 - 8,000 800 - 1,500 900 - 1,300 24,700 - 42,800 16.4 - 12.2
1985
Luxury 60,000 - 115,000 13,400 - 30,000 3,000 - 5,000 2,100 - 3,100 78,500 - 153,100 4.7 - 10.4
Standard 38,000 - 57,000 9,500 - 16,500 1,900 - 3,600 1,500 - 2,500 50,900 - 79,600 4.5 - 6.7
Economy 20,000 - 36,000 5,000 - 8,800 1,000 - 1,700 1,000 - 1,500 27,000 - 48,000 4.7 - 6.1
1986
Luxury 62,000 - 120,000 13,700 - 30,600 3,100 - 5,200 2,300 - 3,100 81,100 - 158,900 3.3 - 3.8
Standard 39,000 - 60,000 9,700 - 16,800 2,000 - 3,800 1,500 - 2,600 52,200 - 83,200 2.6 - 4.5
Economy 21,000 - 37,000 5,100 - 9,000 1,000 - 1,800 1,100 - 1,500 28,200 - 49,300 4.4 - 2.7
1987
Luxury 63,000 - 122,000 13,800 - 30,900 3,300 - 5,500 2,300 - 3,200 82,400 - 161,600 1.6 - 1.7
Standard 40,000 - 61,000 9,800 - 16,800 2,100 - 3,900 1,500 - 2,600 53,400 - 84,300 2.3 - 1.3
Economy 21,000 - 39,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 28,400 - 51,400 0.7 - 4.3
1988
Luxury 65,000 - 125,000 14,000 - 31,000 3,300 - 5,500 2,300 - 3,200 84,600 - 164,700 2.7 - 1.9
Standard 41,000 - 63,000 10,000 - 17,100 2,100 - 3,900 1,500 - 2,600 54,600 - 86,600 2.2 - 2.7
Economy 22,000 - 40,000 5,200 - 9,100 1,100 - 1,800 1,100 - 1,500 29,400 - 52,400 3.5 - 1.9
1989
Luxury 66,000 - 126,000 15,000 - 32,000 3,300 - 5,500 2,300 - 3,200 86,600 - 166,700 2.4 - 1.2
Standard 41,000 - 64,000 10,500 - 18,000 2,100 - 3,900 1,500 - 2,600 55,100 - 88,500 0.9 - 2.2
Economy 22,000 - 40,000 5,500 - 9,700 1,100 - 1,800 1,100 - 1,500 29,700 - 53,000 1.0 - 1.1
1990
Luxury 67,000 - 128,000 15,400 - 33,000 3,500 - 5,700 2,500 - 3,500 88,400 - 170,200 2.1 - 2.1
Standard 42,000 - 65,000 10,800 - 18,500 2,200 - 4,000 1,600 - 2,800 56,600 - 90,300 2.7 - 2.0
Economy 22,500 - 41,000 5,600 - 10,000 1,200 - 1,800 1,200 - 1,600 30,500 - 54,400 2.7 - 2.6
1991
Luxury 65,000 - 122,000 14,500 - 31,500 3,700 - 5,900 2,600 - 3,600 85,800 - 163,000 (2.9) - (4.2)
Standard 40,000 - 63,000 10,000 - 17,800 2,300 - 4,200 1,700 - 2,900 54,000 - 87,900 (4.6) - (2.7)
Economy 21,000 - 39,000 5,000 - 9,500 1,300 - 2,000 1,300 - 1,700 28,600 - 52,200 (6.2) - (4.0)
1992
Luxury 64,000 - 120,000 14,200 - 30,900 3,800 - 6,100 2,700 - 3,700 84,700 - 160,700 (1.3) - (1.4)
Standard 39,000 - 62,000 9,800 - 17,400 2,300 - 4,400 1,800 - 3,000 52,900 - 86,800 (2.0) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,300 1,400 - 2,100 1,300 - 1,800 28,600 - 51,200 0.0 - (1.9)
1993
Luxury 63,000 - 119,000 14,000 - 30,500 3,900 - 6,200 2,800 - 3,800 83,700 - 159,500 (1.2) - (0.7)
Standard 39,000 - 61,000 9,700 - 17,200 2,300 - 4,500 1,800 - 3,000 52,800 - 85,700 (0.2) - (1.3)
Economy 21,000 - 38,000 4,900 - 9,200 1,400 - 2,100 1,300 - 1,800 28,600 - 51,100 0.0 - (0.2)
1994
Luxury 64,000 - 121,000 14,300 - 31,100 3,900 - 6,200 2,800 - 3,800 85,000 - 162,100 1.6 - 1.6
Standard 40,000 - 63,000 10,000 - 17,600 2,400 - 4,600 1,800 - 3,000 54,200 - 88,200 2.7 - 2.9
Economy 22,000 - 40,000 5,100 - 9,500 1,500 - 2,200 1,300 - 1,800 29,900 - 53,500 4.5 - 4.7
1995
Luxury 65,000 - 124,000 14,800 - 32,300 4,100 - 6,400 2,900 - 4,000 86,800 - 166,700 2.1 - 2.8
Standard 41,000 - 65,000 10,400 - 18,300 2,500 - 4,800 1,900 - 3,100 55,800 - 91,200 3.0 - 3.4
Economy 23,000 - 42,000 5,400 - 9,900 1,600 - 2,300 1,300 - 1,800 31,300 - 56,000 4.7 - 4.7
</TABLE>
Average Annual Compounded Percent Change:
1976 - 1995: Luxury 4.3% - 4.8% 1986 - 1995: Luxury 0.8% - 0.5%
Standard 4.4% - 4.4% Standard 0.7% - 1.0%
Economy 5.7% - 5.4% Economy 1.2% - 1.4%
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As illustrated by the previous table, hotel development costs rose significantly
during the late 1970s and the early 1980s; however, the rate of increase slowed
substantially in 1987. In 1991, hotel development costs declined for the first
time since 1976. Further drops of as much as 2.0% were registered in 1992.
Between 1986 and 1990, average annual compounded increases ranged from 1.7% to
2.5%. Costs rose slowly (at average annual compounded rates ranging from 0.5% to
1.4%) between 1986 and 1995, largely as a result of the declines in 1991, 1992,
and 1993. In 1995, hotel development costs started to escalate more rapidly,
reaching 4.7% in the economy segment. As more hotels are developed, we expect
costs to continue to rise.
Because the replacement cost tends to set the upper limit of a particular
hotel's value, this figure is relevant to our analysis. We estimate the
replacement cost of the subject property as follows, based on the development
cost survey discussed earlier.
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Table 12-2 Subject Property's Replacement Cost
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Cost No. of
Hotel Cost per Room Rooms Total Cost
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Building $35,000 193 $6,755,000
FF&E 6,000 193 1,158,000
Pre-Opening 2,100 193 405,300
Operating Capital 1,500 193 289,500
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Total $44,600 $8,607,800
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Ground Lease Approach to Land Valuation
Land value may be estimated either by the sales comparison approach, using
comparable land sales, or by the ground lease approach, which is based on the
economic value generated by an improvement that represents the property's
highest and best use. Because it is unusual to find recent sales of comparable
vacant land that is slated for imminent hotel development, we have used the
ground lease approach to determine the subject property's land value.
Hotels are often constructed on leased land, and although lease terms differ
somewhat, the basis for the rental calculation is frequently tied to a
percentage of revenue. By applying a typical ground lease rental formula to the
subject property's stabilized revenues, the appraiser can determine the hotel's
economic rent, or what is also known as the income attributable to the
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land. Land value is then calculated by dividing the economic rent by an
appropriate capitalization rate.
The self-adjusting aspect of this approach is key to its reliability. Because
the rental formula is tied to a percentage of revenue that inherently reflects
both the locational attributes of the site (occupancy and rate) and the
allowable density of development, the resulting economic ground rent justly
represents the greatest net return to the land over a given period. Because the
Ramada Plaza Pentagon appears to represent the highest and best use of the
property, the ground lease approach is an appropriate method of determining land
value.
We have researched long-term hotel ground leases in search of rental formulas
that are based on a percentage of rooms revenue or on a combination of rooms,
food, and beverage revenue. This analysis indicates that economic ground rents
for hotels similar to the subject property typically range from 2.7% to 7.8% of
rooms revenue. Although this range is quite broad, most of the formulas yield
rental percentages of between 3% and 5% of rooms revenue.
After considering these comparable ground leases and the locational attributes
of the subject property, we believe the appropriate economic ground rental
percentage is 4.0% of stabilized rooms revenue. The subject property's
stabilized rooms revenue has been deflated to reflect 1997 dollars. The
following calculation shows the derivation of the subject property's economic
ground rent.
Stabilized Rooms Revenue (1997 dollars) $3,198,068
Rental Percentage 0.04
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Economic Ground Rent $127,923
Rent generated by a ground lease represents a fairly low-risk income flow.
Because the tenant improvements typically amount to more than eight times the
value of the land, the risk of default is low. When the ground lease terms are
tied to rooms revenue, the landlord is also protected from the adverse effects
of inflation. Based on these risk factors and the current cost of long-term
capital, we estimate the appropriate ground rental overall capitalization rate
at 10%. Applying this indicated capitalization rate to the subject property's
economic ground rent yields the following estimate of land value.
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Economic Ground Rent $127,923 $1,279,227
- ----------------------------- = ----------- =
Capitalization Rate 0.10
Estimated Land Value (Say) $1,280,000
A new hotel's land value typically ranges from 10% to 20% of the overall value.
The estimate of land value presented above is approximately 19% of the subject
property's total value as indicated by the income capitalization approach.
Replacement Cost
Combining the replacement cost of the property with the land value and adding a
developer's profit of 15% yields the subject property's total replacement cost.
================================================================================
Table 12-3 Total Replacement Cost
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Cost of the Improvements and FF&E $8,607,800
Land Value 1,280,000
Add: Developer's Profit 1,483,170
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Total Replacement Cost $11,370,970
(Say) $11,400,000
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If a property's replacement cost is significantly higher than the values
indicated by the income capitalization and sales comparison approaches, it may
indicate that an upward adjustment of these values is appropriate. This would
also reduce the probability of new hotel development, which is not likely to be
feasible under those conditions. This creates an effective barrier to entry for
new competition, thus reducing the risk associated with the subject property's
income-generating potential. An upward adjustment of the value indicated by the
income capitalization approach is also justified by this barrier to entry.
We find that knowledgeable hotel buyers generally base their purchase decisions
on economic factors, such as projected net income and return on investment.
Because the cost approach does not reflect these income-related considerations
and requires a number of highly subjective depreciation estimates, it is our
opinion that this technique is inapplicable in estimating the market value of
the Ramada Plaza Pentagon. However, we have estimated the subject property's
replacement cost as new, which may set the upper limit of the hotel's value.
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HVS International, Mineola, New York Reconciliation of Value Indications 144
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13. Reconciliation of Value Indications
The reconciliation, which is the last step in the appraisal process, involves
summarizing and correlating the data and procedures employed throughout the
analysis. The final conclusion of value is arrived at after reviewing the
estimates indicated by the income capitalization, sales comparison, and cost
approaches. The relative significance, applicability, and defensibility of each
indicated value is considered, and the greatest weight is given to that approach
deemed most appropriate for the property being appraised.
The purpose of this report is to estimate the market value of the fee simple
interest in the subject property. Our appraisal involves a careful analysis of
the property itself and the economic, demographic, political, physical, and
environmental factors that influence real estate values. Based on the data set
forth in this report, the following value indications were developed.
Approach Value Indication
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Income Capitalization $6,700,000
Sales Comparison $5,700,000 - $8,000,000
Cost (Replacement Cost) $11,400,000
Income Capitalization Approach
To estimate the subject property's value via the income capitalization approach,
we analyzed the local market for transient accommodations, examined the
competitive environment, projected occupancy and average rate levels, and
developed a forecast of income and expense that reflects anticipated income
trends and cost components through a stabilized year of operation. The subject
property's projected net income before debt service was then allocated to the
mortgage and equity components based on market rates of return and loan-to-value
ratios. Through a discounted cash flow and income capitalization procedure, the
value of each component was calculated; the total of the mortgage and equity
components equates to the value of the property.
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Our nationwide experience indicates that the procedures used in estimating
market value by the income capitalization approach are comparable to those
employed by the hotel investors who constitute the marketplace. For this reason,
we believe that the income capitalization approach produces the most supportable
value estimate, and it is given the greatest weight in our final estimate of the
subject property's market value.
Sales Comparison Approach
The sales comparison approach uses actual sales of similar properties to provide
an indication of the subject property's value. The strength of this approach is
that it measures value based on the investment decisions made by actual buyers
and sellers. Although we have investigated a number of sales in an attempt to
develop a range of value indications, several adjustments are necessary to
render the sales prices applicable to the subject property. These adjustments,
which are numerous and highly subjective, diminish the reliability of the sales
comparison approach. Furthermore, we find that typical hotel investors employ a
sales comparison procedure only to establish broad value parameters.
The hotel sales outlined earlier in this report indicate an adjusted value range
of $29,700 to $41,200 per available room. The income capitalization approach
indicates a per-room value of approximately $34,800. This information suggests
that a slight downward adjustment of the value indicated by the income
capitalization approach may be warranted.
Cost Approach
To estimate the subject property's value via the cost approach, we estimated the
current replacement cost of the property and added the land value. We give the
cost approach limited weight in arriving at a final value estimate, because
knowledgeable buyers of lodging facilities generally base their purchase
decisions on economic factors (such as projected net income and return on
investment) rather than on a property's depreciated replacement cost.
The replacement cost estimate developed via the cost approach can help to
corroborate the results of the income capitalization and sales comparison
approaches to value. If the replacement cost is substantially higher or lower
than the value indicated by the income capitalization approach, an upward or
downward adjustment of the income capitalization approach value may be
necessary. In the Alexandria/Arlington market, land costs are extremely high,
which poses a strong barrier to market entry; this is a primary reason why the
subject property's replacement cost is somewhat higher than
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HVS International, Mineola, New York Reconciliation of Value Indications 146
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the values indicated by the income capitalization and sales comparison
approaches.
Value Conclusion
Careful consideration has been given to the strengths and weaknesses of the
three approaches to value discussed above. In recognition of the purpose of this
appraisal, we have given primary weight to the value indicated by the income
capitalization approach and made some subjective adjustments based on the sales
comparison approach, the replacement cost estimate, and our extensive experience
in the hospitality industry. It is our opinion that the market value of the fee
simple interest in the Ramada Plaza Pentagon in Alexandria, Virginia, as of
January 1, 1997, is:
$6,600,000
SIX MILLION SIX HUNDRED THOUSAND DOLLARS
The estimate of market value includes the land, the improvements, and the
furniture, fixtures, and equipment. The appraisal assumes that the hotel is open
and operational.
This value estimate equates to roundly $34,200 per room, which is well supported
by market sales and approximately 2% lower than the value indicated by the
income capitalization approach. The estimate of value assumes either the
availability of third-party financing or the willingness and capability of the
seller to take back purchase-money financing so that a buyer can obtain the
level of debt set forth in the Income Capitalization Approach section of this
appraisal.
Marketing Period
Our estimate of market value assumes a marketing period of six to nine months.
Under normal economic conditions, hotels are transferred within this time frame.
Personal Property
In accordance with the appraisal standards set forth by the Office of the
Comptroller of the Currency, it is necessary for bank appraisals to identify and
value any personal property, fixtures, or intangible items that are included in
the appraisal and discuss their impact on the overall estimate of market value.
A hotel's income-generating ability depends on a suitable inventory of
furniture, fixtures, and equipment. Removal of these items can decrease the
property value by as much as the cost to replace the inventory plus the loss of
income incurred while the hotel cannot function.
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A hotel's personal property consists of a wide variety of components, including
bedroom furnishings, bathroom fixtures, restaurant and kitchen equipment, front
office and accounting computers, exterior signs, and similar items.
Based on an annual construction cost survey conducted by HVS International, we
estimate the total replacement cost of the subject property's furniture,
fixtures, and equipment at $6,000 per available room. Assuming an average useful
life of ten years and an effective age of four years, the value of the
furniture, fixtures, and equipment currently in place is approximately $3,600
per room, or a total of $694,800. Because furniture, fixtures, and equipment are
essential to a hotel's income-generating ability and are seldom removed from the
property or sold separately, the separation of the personal property component
from the real property is not particularly meaningful.
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HVS International, Mineola, New York Statement of Assumptions and 148
Limiting Conditions
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14. Statement of Assumptions and Limiting Conditions
1. This report is to be used in whole and not in part.
2. No responsibility is assumed for matters of a legal nature, nor do we
render any opinion as to title, which is assumed to be marketable and free
of any deed restrictions and easements. The property is valued as though
free and clear unless otherwise stated.
3. We assume that there are no hidden or unapparent conditions of the
sub-soil or structures, such as underground storage tanks, that would
render the property more or less valuable. No responsibility is assumed
for these conditions or for any engineering that may be required to
discover them.
4. We have not considered the presence of potentially hazardous materials
such as asbestos, urea formaldehyde foam insulation, PCBs, any form of
toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints.
The appraisers are not qualified to detect hazardous substances, and we
urge the client to retain an expert in this field if desired.
5. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have conducted no specific compliance survey to determine whether
the subject property is operating in accordance with the various detailed
requirements of the ADA. It is possible that the property does not conform
to the requirements of the act, and this could have an unfavorable effect
on value. Because we have no direct evidence regarding this issue, our
estimate of value does not consider possible non-compliance with the ADA.
6. We have made no survey of the property, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It
is assumed that the use of the land and improvements is
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HVS International, Mineola, New York Statement of Assumptions and 149
Limiting Conditions
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within the boundaries of the property described, and that there is no
encroachment or trespass unless noted.
7. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by HVS International are assumed to be
true and correct. We can assume no liability resulting from
misinformation.
8. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject property.
9. The property is assumed to be in full compliance with all applicable
federal, state, local, and private codes, laws, consents, licenses, and
regulations (including a liquor license where appropriate), and that all
licenses, permits, certificates, franchises, and so forth can be freely
renewed or transferred to a purchaser.
10. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
11. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
12. We are not required to testify or appear in court by reason of this
analysis without previous arrangements, and only when our standard per
diem fees and travel costs are paid prior to the appearance.
13. If the reader is making a fiduciary or individual investment decision and
has any questions concerning the material presented in this report, it is
recommended that the reader contact us.
14. We take no responsibility for any events or circumstances that take place
subsequent to either the date of value or the date of our field
inspection, whichever occurs first.
15. The quality of a lodging facility's on-site management has a direct effect
on a property's economic viability and value. The financial forecasts
presented in this analysis assume responsible ownership and competent
management. Any departure from this assumption may have a significant
impact on the projected operating results and the value estimate.
16. The estimated operating results presented in this report are based on an
evaluation of the overall economy, and neither take into account nor
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HVS International, Mineola, New York Statement of Assumptions and 150
Limiting Conditions
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make provision for the effect of any sharp rise or decline in local or
national economic conditions. To the extent that wages and other operating
expenses may advance during the economic life of the property, we expect
that the prices of rooms, food, beverages, and services will be adjusted
to at least offset those advances. We do not warrant that the estimates
will be attained, but they have been prepared on the basis of information
obtained during the course of this study and are intended to reflect the
expectations of a typical hotel buyer.
17. This analysis assumes continuation of all Internal Revenue Service tax
code provisions as stated or interpreted on either the date of value or
the date of our field inspection, whichever occurs first.
18. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of
simplicity, most numbers have been rounded to the nearest tenth of a
percent. Thus, these figures may be subject to small rounding errors.
19. It is agreed that our liability to the client is limited to the amount of
the fee paid as liquidated damages. Our responsibility is limited to the
client, and use of this report by third parties shall be solely at the
risk of the client and/or third parties. The use of this report is also
subject to the terms and conditions set forth in our engagement letter
with the client.
20. Appraising hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications,
the final estimate is subjective and may be influenced by our experience
and other factors not specifically set forth in this report.
21. Any distribution of the total value between the land and improvements or
between partial ownership interests applies only under the stated use.
Moreover, separate allocations between components are not valid if this
report is used in conjunction with any other analysis.
22. This study was prepared by Hospitality Valuation Services, a division of
Hotel Consulting Services, Inc. All opinions, recommendations, and
conclusions expressed during the course of this assignment are rendered by
the staff of Hotel Consulting Services, Inc. as employees, rather than as
individuals.
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HVS International, Mineola, New York Certification 151
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15. Certification
We, the undersigned appraisers, hereby certify:
1. that the statements and opinions presented in this report, subject to the
limiting conditions set forth, are correct to the best of our knowledge
and belief;
2. that Christopher J. Doherty and Anne R. Lloyd-Jones personally inspected
the property described in this report; Stephen Rushmore participated in
the analysis and reviewed the findings, but did not personally inspect the
property;
3. that we have no current or contemplated interests in the real estate that
is the subject of this report;
4. that we have no personal interest or bias with respect to the subject
matter of this report or the parties involved;
5. that this report sets forth all of the limiting conditions (imposed by the
terms of this assignment) affecting the analyses, opinions, and
conclusions presented herein;
6. that the fee paid for the preparation of this report is not contingent
upon our conclusions;
7. that this report has been prepared in accordance with, and is subject to,
the requirements of the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute;
8. that the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives;
9. that this report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (as adopted by the Appraisal
Foundation);
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HVS International, Mineola, New York Certification 152
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10. that no one other than the undersigned prepared the analyses, conclusions,
and opinions concerning real estate that are set forth in this appraisal
report;
11. that as of the date of this report, Stephen Rushmore has completed the
requirements of the continuing education program of the Appraisal
Institute;
12. that this appraisal is not based on a requested minimum value, a specific
value, or the approval of a loan.
/s/ Christopher J. Doherty
--------------------------------
Christopher J. Doherty
Consulting and Valuation Analyst
Hotel Consulting Services, Inc.
/s/ Anne R. Lloyd-Jones
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Anne R. Lloyd-Jones, CRE
Senior Vice President
Hotel Consulting Services, Inc.
/s/ Stephen Rushmore
--------------------------------
Stephen Rushmore, CRE, MAI, CHA
President
Hotel Consulting Services, Inc.
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HVS International Mineola, New York Photographs of the Subject Property
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[GRAPHIC OMITTED]
An exterior view of the Subject Property
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[GRAPHIC OMITTED]
View of the Subject Property's front desk and partial view of lobby
[GRAPHIC OMITTED]
View of a typical double\double guestroom at the Subject Property
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[GRAPHIC OMITTED]
View of one of the Subject Property's meeting rooms
[GRAPHIC OMITTED]
View of Subject Property's restaurant/bar
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[GRAPHIC OMITTED]
View of the Subject Property's Pool area
[GRAPHIC OMITTED]
View of the Subject Property's Parking Garage
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[GRAPHIC OMITTED]
View of a typical bathroom
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[GRAPHIC OMITTED]
View of Subject Property's business center
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[GRAPHIC OMITTED]
View of guestroom corridor
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HVS International Mineola, New York Photographs of the Competition
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[GRAPHIC OMITTED]
Hampton Inn
[GRAPHIC OMITTED]
Best Western Arlington Inn & Tower
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[GRAPHIC OMITTED]
Holiday Inn Eisenhower
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[GRAPHIC OMITTED]
Ramada Plaza Old Town
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[GRAPHIC OMITTED]
Courtyard by Marriott Crystal City
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[GRAPHIC OMITTED]
Days Inn Crystal City
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[GRAPHIC OMITTED]
Howard Johnson Hotel
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Ramada Inn
Alexandria, VA
Legal Description
BEGINNING AT A POINT IN THE WESTERN LINE OF KENMORE AVENUE, SAID POINT
BEING A COMMON CORNER OF PARCEL 3986-01-01 AND PARCEL 3986-01-02; THENCE IN THE
LINE OF SAID PARCELS THE TWO FOLLOWING COURSES AND DISTANCES:
1.) N 69(degrees)45'00" W A DISTANCE OF 160.28 FEET;
2.) S 53(degrees)02'44" E A DISTANCE OF 134.37 FEET TO A POINT IN THE
EASTERN LINE OF SEMINARY ROAD; THENCE IN THE SAID EASTERN LINE THE THREE
FOLLOWING COURSES AND DISTANCES:
1.) N 36(degrees)57'15" W A DISTANCE OF 111.86 FEET;
2.) N 31(degrees)38'09" W A DISTANCE OF 147.08 FEET;
3.) N 38(degrees)20'22" F A DISTANCE OF 6.09 FEET TO A POINT OF CURVATURE
IN THE SOUTHERN LINE OF N. VAN DORN STREET; THENCE IN THE SAID SOUTHERN LINE THE
FIVE FOLLOWING COURSES AND DISTANCE:
1.) ALONG THE ARC OF A CURVE TO THE LEFT WITH A RADIUS OF 767.00 FEET
WHOSE CHORD BEARING AND CHORD ARE N 70(degrees)46'36" E A DISTANCE OF 20.48 FEET
TO A POINT OF TANGENCY;
2.) N 71(degrees)32'30" E A DISTANCE OF 82.63 FEET TO A POINT OF
CURVATURE;
3.) 95.97 FEET ALONG THE ARC OF A CURVE TO THE LEFT WITH A RADIUS OF
633.00 FEET WHOSE CHORD BEARING AND CHORD ARE N 67(degrees)11'55" E A DISTANCE
OF 95.87 FEET;
4.) N 62(degrees)51'19" E A DISTANCE OF 199.17 FEET;
5.) 219.68 FEET ALONG THE ARC OF A CURVE TO THE RIGHT WITH A RADIUS OF
90.00 FEET WHOSE CHORD BEARING AND CHORD ARE S 47(degrees)13'10" E A DISTANCE OF
169.06 FEET TO A POINT OF COMPOUND CURVATURE IN THE WESTERN LINE OF KENMORE
AVENUE; THENCE IN THE SAID WESTERN LINE THE FOLLOWING TWO COURSES AND DISTANCES:
1.) 18.56 FEET ALONG THE ARC OF A CURVE TO THE LEFT WITH A RADIUS OF
433.00 FEET WHOSE CHORD BEARING AND CHORD ARE S 21(degrees)28'41" W A DISTANCE
OF 18.56 FEET;
2.) S 20(degrees)15'00" W A DISTANCE OF 237.58 FEET TO THE POINT OF
BEGINNING, CONTAINING 2.6251 ACRES, MORE OR LESS.
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HVS International, Mineola, New York Simultaneous Valuation Formula 1
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The Simultaneous Valuation Formula as Used in the Valuation of the Subject
Property
The algebraic equation, known as the Simultaneous Valuation Formula, that solves
for the total property value using a ten-year mortgage equity technique was
developed by Suzanne R. Mellen, MAI, Managing Director of the San Francisco
office of Hospitality Valuation Services. A complete discussion of the technique
is presented in her article entitled, "Simultaneous Valuation: A New
Technique."(1)
The process of solving for the value of the mortgage and equity components
begins by deducting the annual debt service from the forecasted income before
debt service, leaving the net income to equity for each projection year. The net
income as of the 11th year is capitalized into a reversionary value using the
terminal capitalization rate. The equity residual, which is the total
reversionary value less the mortgage balance at that point in time and less any
broker and legal costs associated with the sale, is discounted to the date of
value at the equity yield rate. The net income to equity for each of the
projection years is also discounted back to the date of value. The sum of these
discounted values equals the value of the equity component. Because the equity
component comprises a specific percentage of the total value, the value of the
mortgage and the total property can be computed easily. This process can be
expressed in two algebraic equations that set forth the mathematic relationships
between the known and unknown variables using the following symbols.
(1) Suzanne R. Mellen, MAI, "Simultaneous Valuation: A New Technique,"
Appraisal Journal, April, 1983.
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HVS International, Mineola, New York Simultaneous Valuation Formula 2
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NI = Net income available for debt service
V = Value
M = Loan-to-value ratio
f = Annual debt service constant
n = Number of years in the projection period
d(e) = Annual cash available to equity
d(r) = Residual equity value
b = Brokerage and legal cost percentage
P = Fraction of loan paid off during the projection period
f(p) = Annual constant required to amortize the entire loan during the
projection period
R(r) = Overall terminal capitalization rate applied to net income to
calculate total property reversion (sales price at the end of the
projection period)
1/S^n = Current worth of $1 factor (discount factor) at the equity yield
rate
Using these symbols, the following formulas can be derived to express some of
the components comprising this mortgage and equity valuation process.
Debt Service - A property's debt service is calculated by first determining the
mortgage amount which equals the total value (V) multiplied by the loan-to-value
ratio (M). Debt service is derived by multiplying the amount of the mortgage by
the annual debt service constant (f). The following formula represents debt
service.
f x M x V = Debt Service
Net Income to Equity (Equity Dividend) - The net income to equity (d(e)) is the
property's net income before debt service (NI) less debt service. The following
formula represents net income to equity.
NI - (f x M x V) = d(e)
Reversionary Value - The value of the hotel at the end of the tenth year is
calculated by dividing the 11th year's net income before debt service (NI^11) by
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HVS International, Mineola, New York Simultaneous Valuation Formula 3
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the terminal capitalization rate (R(r)). The following formula represents the
property's tenth-year reversionary value.
(NI^11/R(r)) = Reversionary Value
Brokerage and Legal Costs - When a hotel is sold, certain costs are associated
with the transaction. Normally, the broker is paid a commission and the attorney
collects legal fees. In the case of hotel transactions, brokerage and legal
costs typically range from 1% to 4% of the sales price. Because these expenses
reduce the proceeds to the seller, they are usually deducted from the
reversionary value in the mortgage equity valuation process. Brokerage and legal
costs (b) expressed as a percentage of reversionary value (NI^11/R(r)) is
calculated by application of the following formula.
b (NI^11/R(r)) = Brokerage and Legal Costs
Ending Mortgage Balance - The mortgage balance at the end of the tenth year must
be deducted from the total reversionary value (debt and equity) in order to
determine the equity residual. The formula used to determine the fraction of a
loan remaining (expressed as a percentage of the original loan balance) at any
point in time (P) takes the annual debt service constant of the loan over the
entire amortization period (f) less the mortgage interest rate (i) and divides
it by the annual constant required to amortize the entire loan during the
ten-year projection period (fp) less the mortgage interest rate. The following
formula represents the fraction of a loan paid off (P).
(f - i)/(f(p) - i) = P
If the fraction of a loan paid off (expressed as a percentage of the initial
loan balance) is P, then the remaining loan percentage is expressed as 1 - P.
The ending mortgage balance is the fraction of the remaining loan (1 - P)
multiplied by the initial loan amount (M x V). The following formula represents
the ending mortgage balance.
(1 - P) x M x V
Equity Residual Value - The value of the equity upon the sale at the end of the
projection period (dr) is the reversionary value less the brokerage and legal
costs and the ending mortgage balance. The following formula represents the
equity reversionary value.
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
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HVS International, Mineola, New York Simultaneous Valuation Formula 4
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Annual Cash Flow to Equity - The annual cash flow to equity consists of the
equity dividend for each projection year plus the equity residual at the end of
the tenth year. The following formula represents the annual cash flow to equity.
NI^1 - (f x M x V) = d(e)^1
NI^2 - (f x M x V) = d(e)^2
NI^10 - (f x M x V) = d(e)^10
(NI^11/R(r)) - (b (NI^11/R(r)) - ((1 - P) x M x V) = d(r)
Value of the Equity - If the initial amount of the mortgage is calculated by
multiplying the loan-to-value ratio (M) by the property value (V), then the
equity value is one minus the loan-to-value ratio multiplied by the property
value. The following formula represents the value of the equity.
(1 - M) V
Discounting the Cash Flow to Equity to the Present Value - The cash flow to
equity in each of the projection years is discounted to the present value at the
equity yield rate (1/S^n). The sum of all these cash flows is the value of the
equity (1 - M) V. The following formula represents the calculation of equity as
the sum of the discounted cash flows.
(d(e)^1 x 1/S^1) + (d(e)^2 x 1/S^2) + . . .
+ (d(e)^10 x 1/S^10) + (d(r) x 1/S^10) = (1 - M) V
Combine Equations: Annual Cash Flow to Equity and Discounting the Cash Flow to
Equity to the Present Value - The last step is to arrive at one overall equation
that shows that the annual cash flow to equity plus the yearly discounting to
the present value equals the value of the equity.
((NI^1 - (f x M x V)) 1/S^1) + ((NI^2 - (f x M x V)) 1/S^2) + . . .
((NI^10 - (f x M x V)) 1/S^10) +
(((NI^11/R(r)) - (b (NI^11/R(r))) - ((1 - P) x M x V)) 1/S^10) = (1 -M) V
Because the only unknown in this equation is the property's value (V), it can be
readily solved.
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HVS International, Mineola, New York Simultaneous Valuation Formula 5
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Ten-Year Projection of Income and Expense - Because the fixed and variable
forecast of income and expense is carried out only to the stabilized year, it is
necessary to continue the projection to the 11th year. In most instances, net
income before debt service beyond the stabilized year is projected at an assumed
inflation rate. By increasing a property's revenue and expenses at the same rate
of inflation, net income expressed as a percentage of total revenue will remain
constant, and the dollar amount will escalate at the annual inflation rate.
Hotel investors are currently using inflation rates of approximately 3.5%
annually. The previously presented ten-year forecast of income and expense
illustrates the subject property's net income, which is assumed to increase by
3.5% annually subsequent to the hotel's stabilized year of operation.
Solving for Value Using the Simultaneous Valuation Formula - In the case of the
subject property, the following known variables have been determined.
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Table 1: Summary of Known Variables
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Annual Net Income NI See Forecast
Loan-to-Value Ratio M 70.0%
Interest Rate i 9.5%
Debt Service Constant f 0.111856
Equity Yield Ye 22.0%
Brokerage and Legal Fees b 3.0%
Annual Constant Required to
Amortize the Loan in Ten Years fp 0.155277
Terminal Capitalization Rate Rr 11.5%
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The following table illustrates the present worth of a $1 factor at the 22.0%
equity yield rate.
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Table 2: Present Worth of $1 Factor at Equity Yield Rate
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Year Present Worth of $1 Factor at 22.0%
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1997 0.819610
1998 0.671761
1999 0.550582
2000 0.451263
2001 0.369860
2002 0.303141
2003 0.248458
2004 0.203638
2005 0.166904
2006 0.136796
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Using these known variables, the following intermediary calculations must be
made before applying the simultaneous valuation formula. The fraction of the
loan paid off during the projection period is calculated as follows.
P = ( 0.11856 - 0.095 ) / ( 0.155277 - 0.095 ) = 0.279638
The annual debt service is calculated as f x M x V.
( f x M x V ) 0.111856 x 0.70 x V = 0.078299 V
Inserting the known variables into the hotel valuation formula produces the
following:
( 688,000 - 0.078299 V ) x 0.819672 +
( 797,000 - 0.078299 V ) x 0.671862 +
( 824,000 - 0.078299 V ) x 0.550707 +
( 853,000 - 0.078299 V ) x 0.451399 +
( 884,000 - 0.078299 V ) x 0.369999 +
( 913,000 - 0.078299 V ) x 0.303278 +
( 946,000 - 0.078299 V ) x 0.248589 +
( 978,000 - 0.078299 V ) x 0.203761 +
( 1,014,000 - 0.078299 V ) x 0.167017 +
( 1,050,000 - 0.078299 V ) x 0.136899 +
((( 1,087,000 / 0.115 ) - ( 0.03 x ( 1,087,000 / 0.115 )) -
(( 1 - 0.279638 ) x 0.70 x V )) x 0.136899 ) = ( 1 - 0.70 ) V
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Like terms are combined as follows.
$4,544,928 - 0.376214 V = (1-0.70) V
$4,544,928 = 0.67621 V
V = $4,544,928 / 0.67621
V = $6,721,143
Value Indicated by the
Income Capitalization
Approach (Say) $6,700,000
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HVS International, Mineola, New York Qualifications of Christopher J. Doherty
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Christopher J. Doherty
Employment HVS INTERNATIONAL
August, 1995 to present Mineola, New York
(Hotel Valuations, Market Studies, Feasibility
Reports, and Investment Counseling)
1994 OAK BROOK HILLS HOTEL & RESORT
Oak Brook, Illinois
1993 COURTYARD BY MARRIOTT
Arlington Heights, Illinois
Education BS - School of Hotel Administration, Cornell
University (Financial Management Concentration)
Examples of Ashford Financial Corp.
Corporate and Bank of Tokyo - Mitsubishi
Institutional Capitol Hotel Group
Clients Served Capstar
Chartwell Leisure
Goldman Sachs
Hotels of Distinction
Lumbermen's Investment Corp.
Mardec, Ltd.
Mitsui Bank & Trust
NextHealth
Nomura Securities International
Rubenstein, Rudolph, Meyerson,
Blake & Strull, P.A.
Shaner Hotel Group
Sheraton Seattle Hotel & Towers
Simpson, Thatcher, and Bartlett
Societe Generale
Springfield Institute for Savings
Starwood Lodging
Sumitomo Bank, Ltd.
Winegardner and Hammons
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Examples of Hotels Arizona
Appraised or Evaluated - Miraval, Tucson
California
- La Costa Resort & Spa, Carlsbad
- Travelodge, San Diego
Connecticut
- Sheraton Stamford, Stamford
Illinois
- Arlington Park Hilton, Arlington Heights
- Ambassador West, Chicago
- Marriott Suites, Downers Grove
- Radisson, Schaumburg
Massachusetts
- Howard Johnson, West Springfield
Michigan
- Radisson, Lansing
Minnesota
- Sheraton Metrodome, Minneapolis
- Doubletree Grand at Mall of America,
Bloomington
- Sheraton Airport Inn, Bloomington
Missouri
- Embassy Suites, St. Louis
New Jersey
- Holiday Inn, Wayne
New York
- Long Island Marriott, Uniondale
Ohio
- Toledo Hilton, Toledo
Pennsylvania
- Hawthorn Suites, Greentree
- Holiday Inn, Exton
Texas
- Radisson on Town Lake, Austin
Utah
- Salt Lake City Airport Hilton, Salt Lake City
Virginia
- Super 8 at Broad Street, Richmond
- Super 8 at Chamberlayne, Richmond
- Ramada Inn, Alexandria
Washington
- Sheraton Seattle Hotel & Towers, Seattle
- Hilton Bellevue, Bellevue
Puerto Rico
- El Conquistador Resort and Country Club
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HVS International, Mineola, New York Qualifications of Anne R. Lloyd-Jones, CRE
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Anne R. Lloyd-Jones, CRE
Employment
1982 to present HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1981 FAIRMONT HOTEL
Dallas, Texas
1979 - 1980 SAGA FOOD SERVICE
SWARTHMORE COLLEGE
Swarthmore, Pennsylvania
1977 - 1980 DARANNE CATERERS
Swarthmore, Pennsylvania
Professional Affiliations American Society of Real Estate Counselors -
Member (CRE)
Appraisal Institute - Candidate for Membership
Cornell Society of Hotelmen
Education
MPS - School of Hotel Administration,
Cornell University
BA - Swarthmore College
Appraisal Institute
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 1BA - Capitalization Theory and Techniques,
Part A
Course 1BB - Capitalization Theory and Techniques,
Part B
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-3 - Standards of Professional Practice
Course 3-1 - Report Writing
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Examples of Corporate and Institutional Clients Served
Ashford Financial Corporation
Chase Manhattan Bank, N. A.
Citibank / Citicorp NA
Credit Lyonnais
Doubletree Hotels
Grand Heritage Hotels
Great Western Bank
Goldman Sachs
Holiday Inns, Inc.
Interstate Hotels
MassMutual
Marriott International / Host Marriott
Morgan Stanley
OCWEN Financial Services
Remington Hotels
Sheraton Hotels
Starwood Capital Group
Starwood Lodging Trust
Winegardner & Hammons
Wyndham Hotel Company
Hotel Chains and Management Companies Appraised or Evaluated
Doubletree Hotels
Compri Hotels
Interstate Hotels
Fairmont Hotels
Guest Quarters
Hilton Hotels Corporation
Omni International Hotels
Ramada Hotel Corp.
Servico Hotel Corp.
Winegardner & Hammons
Appearance as an Expert Witness
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Jefferson City, Missouri
Federal Bankruptcy Court, Columbia, South Carolina
Federal Bankruptcy Court, Houston, Texas
Federal Bankruptcy Court, New York, New York
Federal Bankruptcy Court, San Bernardino, California
Federal Bankruptcy Court, Los Angeles, California
Federal Bankruptcy Court, Charlotte, North Carolina
Federal Bankruptcy Court, Miami, Florida
Federal District Court, Central Division, Salt Lake City, Utah
Iowa District Court, Story County, Iowa
Texas District Court, Harris County, Texas
Federal Bankruptcy Court, Tampa, Florida
Utah District Court, Salt Lake County, Utah
Federal Bankruptcy Court, Newark, New Jersey
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Examples of Hotels Appraised or Evaluated
Arizona
- - Wyndham Garden Hotel, Chandler
- - Wyndham Garden Hotel - Airport, Phoenix
- - Wyndham Garden Hotel - Union Hills, Phoenix
- - Canyon Ranch Spa & Fitness Resort, Tucson
Alabama
- - Holiday Inn, Birmingham
- - Proposed Sheraton, Gulf Shores
- - Proposed Inn, Mobile
- - Holiday Inn, Sheffield
California
- - Industry Hills Sheraton Hotel, City of Industry
- - Piccadilly Inn, Fresno
- - Proposed Inn at Foss Creek, Healdsburg
- - Sunset Towers Hotel, Hollywood
- - Proposed La Quinta, Irvine
- - Wyndham Garden Hotel, La Jolla
- - Days Inn, La Palma
- - Proposed Marriott Courtyard, Palm Springs
- - Proposed Club Hilton Hotel, Pleasanton
- - Center Pointe Development, San Diego
- - Holiday Inn-Embarcadero, San Diego
- - Holiday Inn-Harbor View, San Diego
- - Seven Seas Lodge, San Diego
- - Proposed Fountaingrove Inn, Santa Rosa
- - Sheraton Round Barn Inn, Santa Rosa
- - Wyndham Garden Hotel, Sunnyvale
- - Westlake Plaza Hotel, Thousand Oaks
- - Proposed Marriott Courtyard, Torrance
Colorado
- - Proposed Hotel, Keystone
Connecticut
- - Holiday Inn, Milford
- - Holiday Inn, New Britain
District of Columbia
- - Grand Hotel, Washington
- - Wyndham Bristol Hotel, Washington
Florida
- - Kon Tiki Village, Kissimmee
- - Sheraton Lakeside, Kissimmee
- - Holiday Inn, 22nd Street, Miami Beach
- - Holiday Inn, 87th Street, Miami Beach
- - Holiday Inn, 180th Street, Miami Beach
- - Sheraton Resort & Marina, St. Petersburg
- - Hilton Hotel, Singer Island
- - Royce Hotel, West Palm Beach
Georgia
- - Marriott Hotel, Atlanta
- - Wyndham Garden Hotel, Atlanta
- - Holiday Inn, Brunswick
- - Holiday Inn, Jekyll Island
- - Mullberry Inn, Savannah
- - Royal Savannah Inn, Savannah
Hawaii
- - Hobron in Waikiki, Honolulu
Idaho
- - Holiday Inn, Boise
- - Red Lion Inn, Boise
- - Super 8, Boise
Illinois
- - Ramada Inn, Bloomington
- - Proposed Marriott Courtyard, Glenview
- - Wyndham Garden Hotel, Naperville
Indiana
- - Holiday Inn, Bloomington
- - Inn at the Four Winds, Bloomington
- - Ramada Inn, Bloomington
- - Hilton Hotel, Fort Wayne
- - Airport Hilton Inn, Indianapolis
- - Hilton at the Circle, Indianapolis
Iowa
- - Holiday Inn, Ames
- - Proposed Fairfield Inn, Des Moines
<PAGE>
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Examples of Hotels Appraised or Evaluated (continued)
Kentucky
- - Proposed Super 8, London
- - Proposed Super 8, Radcliff
Louisiana
- - Sheraton Inn, Kenner
- - Hotel Meridien, New Orleans
Maine
- - Proposed Hotel, Old Orchard Beach
Maryland
- - Brookshire Hotel, Baltimore
- - Lord Baltimore Hotel, Baltimore
- - Hyatt Regency, Bethesda
Massachusetts
- - Proposed Marriott Courtyard, Andover
- - Hyatt Regency, Cambridge
- - Proposed Hotel, Franklin
- - Sheraton Inn, Hyannis
- - Marriott Hotel, Worcester
Michigan
- - Bay Valley Inn, Bay City
- - Hilton Airport, Detroit
- - Westin Renaissance Center, Detroit
- - Hotel Pontchartrain, Detroit
- - Proposed Embassy Suites, Lansing
- - Hilton Inn, Northfield
- - Holiday Inn, Saginaw
Minnesota
- - Wyndham Garden Hotel, Bloomington
- - Marriott Hotel, Minnetonka
Missouri
- - Inn at Grand Glaize, Osage Beach
- - Bel Air Hilton, St. Louis
- - Holiday Inn Riverfront, St. Louis
Nebraska
- - Holiday Inn Airport, Lincoln
- - Holiday Inn Northeast, Lincoln
Nebraska (continued)
- - Marriott Hotel, Omaha
- - Ramada Inn, Omaha
- - Red Lion Inn, Omaha
Nevada
- - Proposed Super 8, Las Vegas
New Jersey
- - Ramada Inn, Edison
- - Marriott Hotel, Hanover
- - Headquarters Plaza, Morristown
- - Hyatt Regency, New Brunswick
- - Holiday Inn, North Brunswick
New York
- - Hilton Hotel, Albany
- - Proposed Embassy Suites, Amherst
- - Holiday Inn Arena, Binghamton
- - Holiday Inn SUNY, Binghamton
- - Proposed Hotel, Binghamton
- - Proposed Hilton, Brooklyn
- - Marriott Hotel, Dewitt
- - Metropole Hotel, Flushing
- - Midway Hotel, Flushing
- - Ramada Inn, Kingston
- - Royce Hotel, La Guardia
- - Holiday Inn, Latham
- - Proposed Crowne Plaza, Manhattan
- - Proposed Prince Street Hotel, Manhattan
- - Proposed Roslyn Inn, Roslyn
- - Proposed Le Richmonde, Rye Brook
- - Hilton Hotel, Syracuse
- - Hotel Syracuse, Syracuse
- - Proposed Hotel, Watertown
North Carolina
- - Proposed Inn, Chapel Hill
- - Proposed Indep. Center Marriott Hotel,
Charlotte
- - Royce Hotel, Charlotte
- - Howard Johnson's North, Charlotte
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Examples of Hotels Appraised or Evaluated (continued)
North Carolina (continued)
- - Holiday Inn West, Durham
- - Sheraton University Inn, Durham
- - Holiday Inn, Fayetteville
- - Holiday Inn Downtown, Raleigh
Ohio
- - Proposed Hyatt Hotel, Cleveland
- - Proposed Marriott Hotel, Cleveland
Oregon
- - Holiday Inn Airport, Portland
- - Holiday Inn South, Portland
Pennsylvania
- - Quality Inn, Allentown
- - Holiday Inn, Bensalem
- - Proposed Marriott Courtyard, Devon
- - Proposed Lafayette Inn, Easton
- - Ramada Inn, Erie
- - Holiday Inn, Harrisburg
- - Marriott Hotel, Harrisburg
- - Proposed Super 8, Harrisburg
- - Proposed Super 8, Lancaster
- - Holiday Inn West, Monroeville
- - Days Inn Philadelphia
- - Franklin Plaza Hotel, Philadelphia
- - Franklin Towne EconoLodge, Philadelphia
- - Guest Quarters Hotel, Philadelphia
- - Hilton Inn, Northeast, Philadelphia
- - Marriott Airport Hotel, Philadelphia
- - Holiday Inn Greentree, Pittsburgh
- - Holiday Inn Parkway East, Pittsburgh
- - Holiday Inn North, Pittsburgh
- - Holiday Inn Parkway West, Pittsburgh
- - Proposed Hotel, Pittsburgh
- - Royce Hotel, Pittsburgh
- - Westin William Penn Hotel, Pittsburgh
- - Hilton Hotel, Scranton
- - Proposed Marriott Courtyard, Valley Forge
- - Holiday Inn Meadowlands, Washington
- - Ramada Inn, York
- - Proposed Super 8, York
Rhode Island
- - Proposed Hotel, Providence
- - Omni Biltmore Hotel, Providence
South Carolina
- - Proposed Charleston Center Hotel, Charleston
- - Proposed Cooper River Inn, Charleston
- - Howard Johnson's, Spartanburg
- - Proposed Middleton Inn and
Conference Center, Charleston
- - Best Western, North Charleston
- - Proposed Marriott Courtyard, Columbia
- - Fairfield Inn, Florence
- - Holiday Inn, Florence
- - Fairfield Inn, Greenville
- - Proposed Marriott Courtyard, Greenville
- - Fairfield Inn, Hilton Head
- - Holiday Inn, Hilton Head
Tennessee
- - Hampton Inn, Brentwood
- - Proposed Marriott Courtyard, Brentwood
- - Howard Johnson's, Chattanooga
- - Sheraton Hotel, Chattanooga
- - Howard Johnson's, Knoxville
- - Proposed Capital Mall Convention Center Hotel,
Nashville
- - Clarion Maxwell House, Nashville
- - Holiday Inn Briley Parkway, Nashville
- - Proposed Marriott Courtyard, Nashville
- - Sheraton Music City, Nashville
- - Stouffer's Nashville Hotel, Nashville
- - Proposed Super 8, Nashville
- - Union Station Hotel, Nashville
- - Wyndham Garden Hotel, Nashville
- - Proposed Super 8, Union City
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Examples of Hotels Appraised or Evaluated (continued)
Texas
- - Proposed Marriott Courtyard, Addison
- - Proposed Marriott Courtyard, Arlington
- - La Mansion, Austin
- - Proposed Marriott Courtyard, Bedford
- - Airport Hilton, El Paso
- - Hotel Meridien, Houston
- - Sheraton Hotel, Houston
- - Proposed Marriott Courtyard, Las Colinas
- - Proposed Marriott Courtyard, North Dallas
- - La Mansion Del Norte, San Antonio
- - La Mansion Del Rio, San Antonio
- - Proposed Marriott Courtyard, San Antonio
- - Proposed Marriott Courtyard - Medical Center,
San Antonio
Utah
- - Deer Valley Resort, Park City
- - Hilton Inn, Salt Lake City
- - Holiday Inn, Salt Lake City
- - Sheraton Hotel, Salt Lake City
Virginia
- - Mountain Lake Hotel, Blacksburg
- - Howard Johnson's, Bristol
- - Boars Head Inn, Charlottesville
- - Proposed Fairfield Inn, Hampton
- - Proposed Embassy Suites, Herndon
- - Ramada Renaissance, Herndon
- - Proposed Marriott Courtyard, Manassas
- - Omni Hotel, Norfolk
Virginia (continued)
- - Proposed Marriott, Norfolk
- - Howard Johnson's, Richmond
- - Howard Johnson's, Roanoke
- - Howard Johnson's, Roanoke Rapids
- - Wyndham Hotel, Williamsburg
Washington
- - Wyndham Garden Hotel, Bothell
- - Redmond Hotel, Redmond
- - Wyndham Garden Hotel, SeaTac
West Virginia
Proposed Budget Motel, Princeton
Wisconsin
- - Proposed Granada Royale, Green Bay
- - Holiday Inn-Downtown, Green Bay
Canada
- - Inn on the Park, Toronto
Puerto Rico
- - Carib Inn, San Juan
Virgin Islands
- - Virgin Grand Beach Hotel, St. Thomas
Jamaica
- - Holiday Inn, Montego Bay
<PAGE>
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Rushmore, CRE, MAI, CHA
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Stephen Rushmore, CRE, MAI, CHA
Employment
1980 to present
HVS INTERNATIONAL
Mineola, New York
(Hotel/Motel Valuations, Market Studies,
Feasibility Reports, and Investment Counseling)
1977 - 1980
1971 - 1974
HELMSLEY-SPEAR HOSPITALITY SERVICES, INC.
New York, New York
(Real Estate)
1974 - 1977
JAMES E. GIBBONS ASSOCIATES
Garden City, New York
(Mortgage Banking, Appraisals, Hotel Operations)
Affiliated
Ownership Interests
HVS INTERNATIONAL (SAN FRANCISCO, CALIFORNIA)
West coast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (MIAMI, FLORIDA)
Southeast office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (BOULDER, COLORADO)
Midwest office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (VANCOUVER, CANADA)
Canadian office for hotel/motel appraisals and counseling
HVS INTERNATIONAL (LONDON, ENGLAND)
European office for hotel/motel appraisals and counseling
HVS - EXECUTIVE SEARCH
Hotel/motel executive search and human resource consulting
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
HVS - ECO SERVICES
Environmental consulting for hotels and motels;
administrator of the ECOTEL designation
HOSPITALITY EQUITY INVESTORS, INC.
Hotel and motel investment and management company
TRUMBULL MARRIOTT HOTEL
General partner of a 324-room hotel and conference center
PRINCETON HOTEL ASSOCIATES
General partner of a 128-unit Residence Inn in Princeton,
New Jersey
SEAVIEW GOLF RESORT ASSOCIATES
General partner of a 298-unit, 424-acre Marriott resort in
Absecon, New Jersey
SHELTON HOTEL ASSOCIATES
General partner of a 96-unit Residence Inn in Shelton,
Connecticut
DANBURY HOTEL ASSOCIATES
General partner of a 243-unit Hilton Hotel in Danbury,
Connecticut
PRUDENTIAL - HEI JOINT VENTURE
Joint venture partner with Prudential Insurance Company of
America on a 234-unit Embassy Suites in Atlanta, Georgia
WESTPORT NORFOLK ASSOCIATES
General partner of a 425-unit Omni Hotel in Norfolk,
Virginia
WESTPORT BWI, LLC
General partner of a 310-unit Marriott Hotel in Baltimore,
Maryland
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Rushmore, CRE, MAI, CHA
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Affiliated
Ownership Interests
(continued)
WESTPORT RARITAN, LLC
General partner of a 274-unit Crowne Plaza Hotel in
Raritan, New Jersey
WESTPORT NOVI, LLC
General partner of a 193-unit Hilton Hotel in Novi,
Michigan
WESTPORT LONG BEACH, LLC
General Partner of a 460-unit Sheraton Hotel in Long Beach,
California
WESTPORT PARK RIDGE, LLC
General Partner of a 265-unit hotel and conference center
in Valley Forge, Pennsylvania
WESTPORT CHARLESTON, LLC
General Partner of a 295-unit Hilton Hotel in Charleston,
South Carolina
HOSPITALITY VALUATION SOFTWARE, INC.
Founder of software company that develops and distributes
hotel financial analysis software
Hotels Managed
Sheraton Hotel, Smithtown, New York
Marriott Hotel, Baltimore Airport, Maryland
Hilton Hotel, Danbury, Connecticut
Residence Inn, Princeton, New Jersey
Embassy Suites, Atlanta Airport, Georgia
Omni Hotel, Norfolk, Virginia
Crowne Plaza, Raritan, New Jersey
Hilton Hotel, Novi, Michigan
Sheraton Hotel, Long Beach, California
Hilton Hotel, Charleston, South Carolina
Park Ridge Hotel and Conference Center, Valley Forge,
Pennsylvania
Hilton Hotel, Wilmington, Delaware
<PAGE>
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Rushmore, CRE, MAI, CHA
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Professional Affiliations
American Society of Real Estate Counselors - Member (CRE)
- Board of Governors
Appraisal Institute - Member (MAI) (SREA)
- Developer and Instructor, Hotel Investment and Valuation
Seminar
- Developer and Instructor, Hotel Computer Valuation
Seminar
American Hotel and Motel Association
- Certified Hotel Administrator (CHA)
- Industry Real Estate Financing Advisory Council (IREFAC)
International Society of Hospitality Consultants - Member
(ISHC)
New York University - Adjunct Assistant Professor of
Nutrition, Food and Hotel Management
Michigan State University - Honorary Faculty, Honorary
Alumnus
Certified General Appraiser - Arizona, Colorado,
Connecticut, Delaware, District of Columbia, Georgia,
Illinois, Massachusetts, Michigan, Minnesota, Nebraska, New
Jersey, New York, Oregon, Pennsylvania, South Carolina,
Tennessee, Utah, Virginia
Licensed Real Estate Broker - New York, Pennsylvania
Board of Advisers
- Real Estate Finance Journal
- Real Estate Workouts & Asset Management
American Arbitration Association - National Real Estate
Valuation Council
Cornell Society of Hotelmen
New York University Masters in Hospitality Management -
Advisory Board
New York University Hospitality Investment Conference -
Board of Advisors
Beta Gamma Sigma - National Honor Society in Business and
Management
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Rushmore, CRE, MAI, CHA
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Endowment
Hospitality Valuation Services Professor of Hotel Finance
and Real Estate
- School of Hotel Administration, Cornell University
(currently held by Professor James J. Eyster)
Education
BS - School of Hotel Administration, Cornell University
MBA - Graduate School of Business Administration (Finance),
University of Buffalo
Candidate for PhD - School of Education, Department of Food
Service Management, New York University
Partial List of Teaching and Lecture Assignments
Cornell University - Computer Valuation Techniques
Michigan State University - Hotel Management Contracts
University of North Carolina - Hotel Market Studies
University of Virginia - Assessing Hotels
American Arbitration Association - Real Estate Arbitration
American Hotel and Motel Association - Hotel Obsolescence
Appraisal Institute - Hotel Valuation (over 50 seminars)
International Association of Assessing Officers - Hotel
Valuation
Montreal Appraisal Society - Total Project Analysis
Society of Real Estate Appraisers - Lease Seminar Lodging
Hospitality - Lodging Summit
Published Books
and Seminars
Textbooks
The Valuation of Hotels and Motels,
Appraisal Institute, Chicago, Illinois, 1978
Hotels, Motels and Restaurants: Valuations and Market
Studies,
Appraisal Institute, Chicago, Illinois, 1983
How to Perform an Economic Feasibility Study of a Proposed
Hotel/Motel,
American Society of Real Estate Counselors, Chicago,
Illinois, 1986
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Rushmore, CRE, MAI, CHA
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Published Books and Seminars (continued)
Textbooks (continued)
Hotel Investments: A Guide for Owners and Lenders,
Warren, Gorham and Lamont, Inc., New York, New York, 1990
The Computerized Income Approach to Hotel Market Studies
and Valuations,
Appraisal Institute, Chicago, Illinois, 1990
Hotel Investments: A Guide for Owners and Lenders, 1992
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotel Investments: A Guide for Owners and Lenders, 1993
Supplement,
Warren, Gorham and Lamont, Inc., New York, New York, 1992
Hotels and Motels: A Guide to Market Analysis, Investment
Analysis, and Valuations,
Appraisal Institute, Chicago, Illinois, 1992
Student Manuals
The Valuation of Lease Interests,
Society of Real Estate Appraisers, Chicago, Illinois, 1976
Hotel-Motel Valuation Seminar,
Appraisal Institute, Chicago, Illinois, 1981, 1988, 1990
The Computerized Approach to Hotel Market Studies and
Valuations Seminar,
Appraisal Institute, Chicago, Illinois, 1991
Demonstration Appraisal
Demonstration Appraisal of a Proposed Hotel, Spring Valley,
New York, Hospitality Valuation Services, Mineola,
New York, 1983, 1990
Chapters
The Real Estate Handbook-Second Edition, Dow Jones-Irwin,
1989, "Hotels and Motels"
Arbitration of Real Estate Valuation Principles, American
Arbitration Association, 1987, "Arbitration in the
Hospitality Industry"
Ethics in Hospitality Management: A Book of Readings,
Educational Institute of the American Hotel and Motel
Association, 1992, "Ethics in Hotel Appraising"
The Lodging and Food Service Industry, Educational
Institute of the American Hotel and Motel Association,
1993, "Insider's Insights"
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles
The Appraisal Journal
"Using Total Project Analysis to Compete for Investment
Capital," October, 1975
"The Appraisal of Food Service Facilities," July, 1980
"Publish and Prosper," October, 1980
"Valuation of Hotels and Motels for Assessment Purposes,"
April, 1984
"Adjusting Comparable Sales for Hotel Assessment Appeals,"
July, 1986
"Hotel Business Value and Working Capital: A
Clarification," January, 1987
"Ethics in Hotel Appraising," July, 1993
The Appraiser
"Hotel-Motel Appraisal Misconceptions Set Straight,"
January, 1979
"No Conventional Financing Available for Hotels: Rushmore,"
December, 1979
"Estimating Hotel Land Values Using Comparable Ground
Leases," April, 1980
Bulletin of the
Cornell Society of
Hotelmen
"Employment Philosophy for a Consulting Practice," July,
1984
Business Travel News
"A Snapshot of a Classic Recovery," July, 1995
The Canadian Appraiser
"Hotel/Motel Market Sales Update," Summer, 1987
Capital Sources for Real Estate
"Stephen Rushmore Discusses the Future of the Lodging
Industry," December, 1994
Cayuga Advisor
"Secrets to Success in Consulting," October, 1992
Chapter News and Notes
"Quantifying a Hotel's Business Value," November, 1979
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Rushmore, CRE, MAI, CHA
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Published Articles
(continued)
Cornell Hotel &
Restaurant
Administration
Quarterly
"A Preliminary Market Study," November, 1974
"How Much is Your Place Worth Today? A Case Study in
Hotel - Motel Valuation," May, 1975
"What Can Be Done About Your Hotel's Real Estate Taxes?"
May, 1977
"The Appraisal of Lodging Facilities," August, 1978
"The Appraisal of Food Service Facilities," February,
1979
"The Appraisal of Lodging Facilities - Update," November,
1984
"Hotel Sales Prices Down More Than 12%," May, 1991
"Seven Current Hotel Valuation Techniques," August, 1992
"The Valuation of Distressed Hotels," October, 1992
"Hotel Lending in the 1990's: Amateurs Beware,"
December, 1994
"Investment Values of Lodging Property: Modeling the
Effects of Income Taxes and Alternative Lender Criteria,"
December, 1995
FCI Spec Sheet
"Employment Philosophy for a Consulting Practice,"
September, 1984
Florida Hotel & Motel Journal
"Rushmore Reports Rising Hotel Prices," February, 1995
Hotel and Motel Management
"Average Rate vs. Project Cost," May 1, 1974
"How to Increase the Marketability of Your Motel," April,
1981
"Tougher Lending, Lower Room Rate Hikes On Way?" June, 1981
"What is That Mortgage Loan Going to Cost You?" August,
1981
"How to Perform a Study of Your Property's Market,"
October, 1981
"How do High Interest Rates Affect Your Motel's Value?"
December, 1981
"How to Buy a Feasibility Study That Works for You,"
February, 1982
"Settling Lease Conflicts Quickly Through Arbitration,"
April, 1982
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Hotel and Motel Management (continued)
"Are Casino Hotels Really Worth $500,000 Per Room?" June,
1982
"Discount Rates and Internal Rate of Return," August,
1982
"Determining a Property's Extended Life Cycle,"
November, 1982
"Using Microcomputers for Forecasting," December, 1982
"Update on Hotel Development Costs," January, 1983
"Estimating a Site's Worth by Finding Its Profit Value,"
June, 1983
"Hotel Construction May Be Slowing Down a Little Bit,"
April, 1983
"The Investor's Risk Sways to Prevailing Economic Winds,"
August, 1983
"Is Your Property Tax at as Low a Level as it Should Be?"
October, 1983
"The Ultimate Guest Room: Could it Ever Exist Anywhere?"
December, 1983
Hotel-Motor Inn Journal
A Preventive Maintenance System for Motels," March, 1975
Hotel Valuation Journal
"Hotel Valuation Index Peaks During 1989," Fall, 1990
"Hotel Development Costs," Winter, 1991
"Hotel Valuation Index for 1990," Spring, 1991
"Bad Year for Hotel Sales Prices Confirmed," Spring, 1992
"Hotel Sales Prices on the Rise," Fall, 1994
"United States Hotel Values Climb," Spring/Summer, 1995
"It's Time for Franchise Reform," Fall, 1995
Institutions/
Volume Feeding
"Greater Risk/Greater Profit Potential: Hotel Management
Contract," May, 1973
Lodging Hospitality
"How to Finance Renovation Projects," January, 1974
"Controlling Your Real Estate Taxes," July, 1978
"Putting Together a Sound Financial Package," December,
1978
"Favorable Outlook for Lodging Values," December, 1983
"Are Your Property Taxes Too High? (Part I and II)," May
and June, 1984
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Hotel Development Costs," July, 1984
"The Right Management Contract for You," September, 1984
"Selecting the Firm to Prepare Your Feasibility
Study," October, 1984
"A Quick How-To In Hotel Valuation," November, 1984
"Updating Lodging Interest Rates," December, 1984
"Is Your Guest Experience Up to Par?" January, 1985
"How to Perform a Breakeven Analysis," May, 1985
"Evaluating Operating Performance," June, 1985
"Hotel Lenders Toughen Underwriting Requirements," July,
1985
"Don't Forget the Pre-Opening Agreement," August, 1985
"Management Companies Should Participate in Financing,"
October, 1985
"Current Techniques for Valuing Hotel Land," November, 1985
"Hotel Development Costs," December, 1985
"Sourcing Debt Into the 1990's," January, 1986
"Hotel Valuation Thumb Rule," February, 1986
"Value in Use Versus Value in Exchange," March, 1986
"Stretching Feasibility," April, 1986
"The Management Question," May, 1986
"How to Commission a Feasibility Study," June, 1986
"Macro Trends Affecting Property Values," July, 1986
"Hotel-Motel Market Sales Update," August, 1986
"Financing Alternatives: Zero Coupon Mortgages," September,
1986
"Forecasting Lodging Energy Costs," October, 1986
"Portfolio Financing a Better Way," November, 1986
"Profit by Looking at History," December, 1986
"Why New York Isn't Overbuilt," February, 1987
"How to Discourage Hotel Overbuilding: A Case Study,"
April, 1987
"Structuring an Incentive Management Fee," June, 1987
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Franchising Questions and Answers," July, 1987
"Comparing Hotel Development Costs," August, 1987
"Understanding Economic Life," September, 1987
"Prices Rise for Lodging Properties," October, 1987
"Management Companies Are Key to Success," November, 1987
"Evaluating a Management Contract Fee Structure,"
December, 1987
"Check Profits Before Selecting Hotel Operator," January,
1988
"It's a Good Time to Review Your Taxes," February, 1988
"How to Use a Management Company Rating System," March,
1988
"Make Sure Management Contracts Contain These Terms,"
April, 1988
"Hotel Access and Visibility," May, 1988
"Chain Sale Strategies," July, 1988
"Evaluating a Hotel Franchise," August, 1988
"Evaluating Franchise Fees," September, 1988
"Opportunities in Economy Lodging," October, 1988
"How to Obtain a Hotel Mortgage," November, 1988
"Arbitration in the Hospitality Industry," December, 1988
"Lodging Development Cost Update," January, 1989
"Amenities as Profit Builders," February, 1989
"Hotel Values Mirror the Times," March, 1989
"Forecasting Revenue and Expenses," April, 1989
"Real Estate Jargon Made Simple," May, 1989
"Pricing a Management Contract," June, 1989
"Trends in Valuation," July, 1989
"Rescuing the Distressed Hotel," August, 1989
"Shielding Against Incompetence," September, 1989
"Hotel Valuation Revisited," October, 1989
"New Breed of Hard Budgets," November, 1989
<PAGE>
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Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Figuring Cap Rates," December, 1989
"A Glance Backward," January, 1990
"Costs Creeping Up," February, 1990
"Valuing Distressed Properties," March, 1990
"Cap and Discount Rates," April, 1990
"An Open Letter," May, 1990
"Misconceptions About Appraisals," June, 1990
"Hotel Values Still Growing," July, 1990
"Hotel Renovation is Key to `90s," August, 1990
"Time Right for Hotel Leases," September, 1990
"Getting a Fix on Rates," October, 1990
"The Wrinkles of Class," November, 1990
"A Glance Backward," December, 1990
"The Price Dropoff," January, 1991
"The Cost Washout," February, 1991
"Survival of the Fittest," March, 1991
"Looking Out and Up," April, 1991
"The Bottom is in Sight," May, 1991
"The Pitfalls of Liquidation," June, 1991
"Extra! Extra! Hospitality News," July, 1991
"The Art of Hotel Renovation," August, 1991
"No Better Time for a Tax Review," September, 1991
"No Time for Passivity," October, 1991
"What a Franchise Really Costs," November, 1991
"In Case You Hadn't Heard," January, 1992
"Negotiation - The Name of the Game," February, 1992
"Now Could be the Time to Build," March, 1992
"The Well May Stay Dry," April, 1992
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality
(continued)
"Hotel Life Expectancy," May, 1992
"Hotel Values - What a Downer," June, 1992
"How to Make Money Now," July, 1992
"Hotel Chain Class Survey," August, 1992
"Budget Dining with Rushmore," September, 1992
"Bookings Up, Rates Will Follow," October, 1992
"Hospitality Master's Good Preparation," November,
1992
"What's New on the Job Front?" January, 1993
"Where Have All the Hotels Gone?" February, 1993
"Hotel Building Costs Continue to Fall," March, 1993
"Hotel Values Head Upward," April, 1993
"The Rise and Fall of Trophy Hotels," May, 1993
"Hotel Sales and Prices Rebound," June, 1993
"Third Parties Loosening Purse Strings," July, 1993
"Beyond Recycling: The Ecotel," August, 1993
"Time to Reduce Property Taxes," September, 1993
"Lodging: The Way I See It," October, 1993
"Choosing an Appraiser," November, 1993
"Who Needs an Asset Manager?" January, 1994
"Investing by the Numbers," February, 1994
"Fire Your Staff and Lease Them Back," March, 1994
"Published Rates Hint at Recovery," April, 1994
"Now is the Time to Start Building," May, 1994
"Hotel Values Heading Up," June, 1994
"Farewell, Friend," July, 1994
"Sales Prices Creeping Up," August, 1994
"Selecting Green Hotel Supplies," September, 1994
"Don't Write Off Full-Service Hotels," October,
1994
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Lodging Hospitality (continued)
"Lodging REIT's Are on the Rise," November, 1994
"Going Back to the Future," January, 1995
"How much do Managers Make?" March, 1995
"Lodging Transactions Soared in '94," April, 1995
"Hotel Development Costs on the Rise," May, 1995
"Hotel Values up Significantly," June, 1995
"What a Franchise Costs over the Long Term," July,
1995
"Road Food Part II," August, 1995
"It's Time for Franchise Reform," September, 1995
"Extended Stay May Not Extend Your Profits,"
October, 1995
"The Year as I See It," November, 1995
"Cap Rate 101," January, 1996
Michigan Lodging
"Hotel Development Costs," January, 1988
The Mortgage and Real Estate Executives Report
"Atlantic City Building Game Involves High Stakes,"
August, 1979
"How Interest Rates Affect Real Estate Values,"
June, 1982
"Update on Hotel Development Costs," May 1, 1983
Motel-Hotel Insider
"The $100,000 Plus Hotel Room Has Become a
Reality," November 19, 1979
"Update on Hotel Development Costs," April 4, 1983
NAIFA - The
Appraisal Review
"Hotel Valuation Techniques," Vol. 44, 1991
Real Estate Digest
"Why Should the Management Team be Important to
Hotel Lenders," Fall, 1988
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate
Finance Journal
"What is a Typical Fee for a Hotel Management
Contract?" Fall, 1988
"Hotel Franchise Fees," Winter 1989
"Why the Management Team Should be Important to
Hotel Lenders," Spring, 1989
"Hotel Values and Costs," Summer, 1989
"Structuring a Hotel Investment," Fall, 1989
"A Guide for Lenders Holding Distressed Hotel
Loans," Winter, 1990
"Estimating Current Interest Rates for Hotel
Financing," Spring, 1990
"Hotel Valuation Techniques," Summer, 1990
"Now is the Time to Review Your Hotel's Property
Taxes," Fall, 1990
"Property Tax Assessments for Hotels and Motels,"
Winter, 1991
"Putting Together Hotel Management Agreements -
Part I," Spring 1991
"Putting Together Hotel Management Agreements -
Part II," Summer, 1991
"The 1980s - The Decade of Change," Fall, 1991
"An Overview of the Hotel Industry: Past, Present,
and Future," Spring, 1994
Real Estate Forum
"Casino Hotels Raise Valuation Questions,"
November, 1981
Real Estate
Investment Ideas
"How Fuel and Energy Shortages Should Affect Investment
Decisions in the Hospitality Industry," March, 1974
"Upward Trend Continues for Sales Price of Hotel-Motel
Properties," May, 1988
"High Prices Paid for Hotel-Motel Properties," February,
1990
Real Estate Issues
"Employee Compensation for a Consulting Practice,"
Fall/Winter, 1985
"Hotel/Motel Market Sales Update," Spring/Summer,
1987
Real Estate Newsletter
"Computers in Hotel Appraising," May 15, 1989
Real Estate
Investment Ideas
"Hotel-Sales Update," Winter, 1986
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Real Estate Review
"Valuing Motels and Hotel in the Current Market,"
Fall, 1972
"Dealing With Distressed Hostelry Loans," Fall, 1975
"The Mortgage Underwriting Consultant Comes of
Age," Fall, 1977
"Real Estate Compensation," Winter, 1987
Real Estate Workouts
and Asset Management
"Stephen Rushmore on Directions in the Hospitality
Industry," September, 1992
Real Values
"Hotel Construction Cost Update," April, 1986
Restaurant and
Hotel Design
"How Much Should the Renovation Be?" March, 1986
"14 Notable Hotel Development Firms," December, 1987
Rushmore on Hotel Valuation
"Mortgage - Equity," Winter, 1979
"Atlantic City - From Bust to Boom," Winter, 1979
"Mortgage - Equity," Spring, 1979
"Developing Mortgage Data," Spring 1979
"Gasoline and Market Values, " Spring, 1979
"Mortgage - Equity," Fall, 1979
"Quantifying a Hotel's Business Value," Fall, 1979
"What Has Happened to Typical Hotel-Motel
Development Costs?," Fall, 1979
"Mortgage-Equity," Winter, 1980
"Extending Hotel Economic Life Through Renovation,"
Winter, 1980
"Estimating Hotel Land Values Using Comparable
Ground Leases," Winter, 1980
"Quantifying the Value of Personal Property to a
Going Hotel," Spring, 1980
"Recent Changes in New York City's Hotel Market,"
Spring, 1980
"Hotel-Motel Economic Lives," Fall, 1980
"Mortgage - Equity," Fall, 1980
"Mortgage - Equity," Winter, 1981
"Developing Mortgage Data," Winter, 1981
"Statistical Support for Food and Beverage
Projections," Winter, 1981
"Mortgage - Equity," Spring/Summer, 1981
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Rushmore on Hotel Valuation (continued)
"Quantifying a Hotel's Demand," Spring/Summer, 1981
"A Five-Year Overview of Typical Hotel-Motel
Development Costs," Spring/Summer, 1981
"Mortgage - Equity," Winter/Spring, 1982
"Update on Hotel Capitalization Rates,"
Winter/Spring, 1982
"Mortgage - Equity," Summer/Fall, 1982
"Are Casino Hotels Really Worth $500,000 Per Room?"
Summer/Fall, 1982
"The Hotel-Motel Life Cycle, Summer/Fall, 1982
"Mortgage - Equity," Winter/Spring, 1983
"Update on Hotel Development Costs," Winter/Spring, 1983
"The Valuation of Hotels and Motels for Assessment
Purposes," Winter, 1984
"Hotel Capitalization Rates," Summer, 1984
"Hotel Development Cost Survey," Summer, 1984
"Selecting a Hotel Management Company," Fall, 1984
"Hotel Capitalization Rates," Spring, 1985
"How to Perform a Breakeven Analysis," Spring, 1985
"Hotel Capitalization Rates," Winter, 1986
"Hotel Development Costs," Winter, 1986
"Hotel Valuation Survey," Winter, 1987
"Impact of New Tax Laws on Hotel Values," Winter, 1987
"Hotel-Motel Market Sales Update," Winter, 1987
"Structuring an Incentive Management Fee," Fall, 1987
"Understanding Your Hotel's Economic Life," Fall, 1987
"Hotel Development Costs," Fall, 1987
"Hotel, Motel Market Sales Update," Winter, 1988
"Amenity Creep," Winter, 1989
"Hotel Franchise Fees," Winter, 1989
"Hotel Valuation Index," Fall, 1989
"Latest Trends in Hotel Values," Fall, 1989
<PAGE>
HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Published Articles (continued)
Tri-State Real Estate Journal
"Across the Nation: Hotel Sale Prices Escalate on Average,"
December 23, 1994
U.S. Real Estate Week
"All-Suites Market Entering Second Phase," May 4, 1987
Valuation
"Hotel-Motel Market Sales Update," February, 1987
Quarterly Newsletter
Hotel Valuation Journal
Professional newsletter with a circulation of 10,000
Real Estate Column
Lodging Hospitality
Real estate editor for a major monthly hospitality
periodical
Hospitality Column
Real Estate Finance Journal
Contributing hospitality editor
Computer Software
Hospitality Valuation Software
Hotel financial software for room night analyses,
income and expense forecasts, and valuation
calculations - developed and distributed for the
Appraisal Institute
Hotel-Motel Data
Hospitality Market Data
Exchange
National clearinghouse for information pertaining
to hotel and motel transactions
Hotel Valuation Index
National index of hotel value trends for 24
individual market areas
Hospitality Seminar Series
Intensive short courses for hotel and restaurant
professionals
Hotel Franchise Fees Analysis Guide
Analysis of hotel franchise fees and costs
Hospitality Bibliography
Comprehensive literature index of hotel and
restaurant books and articles
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HVS International, Mineola, New York Qualifications of Stephen
Rushmore, CRE, MAI, CHA
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Awards
Robert H. Armstrong Award
For the most significant contribution to The Appraisal
Journal in 1975
Activities
Commercial pilot, instrument, multi-engine; sailing; skiing
Corporate and Institutional Clients Served
Aetna Life Insurance
AIG Real Estate Investment
Aldrich Eastman and Waltch
Allstate
American Airlines
America's Best Inns
Arthur Anderson & Company
Bankers Trust Company
Bank of America
Bank of Boston
Bank of Montreal
Bank of New York
Bank of Nova Scotia
Bank of Tokyo
Bank One-Columbus
Banque Indosuez
Barclay's Bank
Baybank Boston
The Beacon Companies
Bear, Stearns & Company, Inc.
Best Inns
Best Western International
Boykin Management Co.
Bradbury Suites
C. Itoh
Caesar's World
California Dept. of Transportation
Chase Lincoln First Bank, N.A.
Chase Manhattan Bank
Chemical Bank
Chrysler Capital Corporation
CIGNA
Citibank
Citicorp Real Estate
City of Boston
City of Detroit
City of Grand Rapids
City of Kalamazoo
City of Orlando
City of Philadelphia
City of Santa Monica
City of Toronto
Columbia Sussex Corporation
Continental Illinois National Bank
Copley Real Estate Advisors
Corporex Development
CRI, Inc.
Cushman and Wakefield
Days Inns
Edward J. DeBartolo Corp.
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Deer Valley Ski Corporation
Doubletree Hotels
Drury Inns
Econo Lodge
Economic Development Admin.
EIE Regent International
Embassy Suites
Equitable Life Assurance
Equitable Real Estate Investment
European American Bank
Fairmont Hotels
Federal Deposit Insurance Corp.
First Boston
First California Savings
First Interstate Bank
First National Bank of Chicago
Four Seasons Hotels
Goldman, Sachs
Greater Orlando Aviation Authority
Great Western Bank
Great Western Savings
Guest Quarters
Hampton Inns
Hilton Hotels, Corp.
Hilton International
Holiday Corporation
Holiday Inns
Home Savings of America
Howard Johnson's
Hudson Hotels Corporation
Hyatt Hotels
Industrial Bank of Japan
Interstate Hotels
The Irvine Company
ITT Commercial Finance Corp.
Japan Airlines
JDC (America) Corporation
John Q. Hammons
John Hancock Life Insurance
Johnson & Wales College
Kenneth Leventhal & Assoc.
Kidder Peabody & Company, Inc.
La Quinta
Larken, Inc.
Lexington Companies
Loews Hotels
Harry Macklowe Real Estate
Marine Midland Bank, N.A.
Marriott Corporation
MA Bay Transit Authority
Massachusetts Mutual Life
Mellon Bank
Meridien Hotels
Merrill Lynch
Merrill Lynch Capital Markets
Metropolitan Life Insurance
Microtel
Midlantic Bank
<PAGE>
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Rushmore, CRE, MAI, CHA
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Corporate and Institutional Clients Served (continued)
Mitsubishi
Morgan Guaranty Bank & Trust Co.
J.P. Morgan Investment Management
Morgan Stanley
Motel 6, Inc.
Mutual Benefit Co.
National Westminster Bank
New York Life Insurance
Nippon Credit Bank
Nomura Securities Int'l
North American Taisei Corporation
Northwestern Mutual Life
Omni Hotels
Parabas Bank
Prime Motor Inns
Property Capital Trust
Prudential Life Insurance
Radisson Hotels
Ramada Inns
Red Lion Inns
Regent International
Registry Hotels
Residence Inns
Resolution Trust Corporation
Rhode Island Hospital Trust
Ritz-Carlton Hotels
Rodeway Inns
Rose Associates
Salomon Brothers
San Antonio Hotel/Motel Assoc.
Sanwa Bank
Security Pacific Bank
Servico Management Corp.
Sheraton Hotels
Sonesta Hotels
Sonnenblick-Goldman
Steamboat Ski Corporation
Stouffer Hotels
Stratton Corporation
Sumitomo Bank
Summerfield Hotel Corporation
Super 8 Hotels
Swiss Bank Corporation
Taisei
Texas Commerce Bancshares, Inc.
Tishman Realty Corporation
Trans World Airlines
Travelers Insurance
TraveLodge
Trusthouse Forte
UBS Securities
Union Labor Life
United Bank of Switzerland
United Inns, Inc.
United States Steel
Universal Hotels
U.S. Air Force
U.S. Department of Justice
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Rushmore, CRE, MAI, CHA
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Corporate and
Institutional Clients
Served (continued)
U.S. Department of the Army
U.S. Department of the Interior
U.S. Economic Development Authority
U.S. Trust Company
Walt Disney Productions
Westin Hotels
Williams Hospitality Corporation
Winegardner & Hammons
Winthrop Financial Associates
Wyndham Hotels
Zeckendorf Company
Appearance as
an Expert Witness
Administrative Law Court - SEC, Washington, DC
Appellate Tax Board, Boston, Massachusetts
Arbitration, Wayne, New Jersey
Assessment Appeals Board, Los Angeles County, Los Angeles, California
Board of Equalization and Review, Washington, District of Columbia (2)
Board of Taxation, Atlantic City, New Jersey
Bureau de Revision Evaluation Fonciere du Quebec, Montreal, Canada
Circuit Court, Orange County, Orlando, Florida
Condemnation Review Board, Minneapolis, Minnesota
Corporation Committee, Rhode Island State Senate
Court of Common Pleas, Allegheny County, Pennsylvania
Court of Common Pleas, Franklin County, Ohio
Court of Common Pleas, Montgomery, Pennsylvania
Court of Common Pleas, Pittsburgh, Pennsylvania
Court of Common Pleas, Philadelphia, Pennsylvania
Court of Queen's Bench of Alberta, Canada
District Court, Arapahoe County, Colorado
District Court, Dallas County, Texas
District Court, Harris County, Texas
District Court, Tarrant County, Texas
District Court, Hennepin County, Minneapolis, Minnesota
District Court, Knoxville, Tennessee
Federal Bankruptcy Court, Oakland, California
Federal Bankruptcy Court, Los Angeles, California
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Federal Bankruptcy Court, San Diego, California
Federal Bankruptcy Court, Denver, Colorado
Federal Bankruptcy Court, District of Columbia
Federal Bankruptcy Court, Miami, Florida (2)
Federal Bankruptcy Court, Chicago, Illinois
Federal Bankruptcy Court, New Orleans, Louisiana
Federal Bankruptcy Court, Greenbelt, Maryland
Federal Bankruptcy Court, Baltimore, Maryland
Federal Bankruptcy Court, Rockville, Maryland
Federal Bankruptcy Court, Boston, Massachusetts
Federal Bankruptcy Court, Grand Rapids, Michigan
Federal Bankruptcy Court, Las Vegas, Nevada
Federal Bankruptcy Court, Newark, New Jersey (2)
Federal Bankruptcy Court, Manhattan, New York (2)
Federal Bankruptcy Court, Westbury, New York
Federal Bankruptcy Court, Philadelphia, Pennsylvania
Federal Bankruptcy Court, Reading, Pennsylvania
Federal Bankruptcy Court, Salt Lake City, Utah
Federal Bankruptcy Court, Madison, Wisconsin (2)
Federal District Court, Rochester, New York
Federal District Court, Philadelphia, Pennsylvania (2)
Judicial Arbitration and Mediation Services, Dallas, Texas
Michigan Tax Tribunal, Detroit, Michigan
New Jersey Tax Court, Newark, New Jersey (2)
Superior Court, District of Columbia
Superior Court, Clayton County, Georgia (2)
Superior Court of North Carolina
Superior Court, Nashua, New Hampshire
Supreme Court, New York State, Buffalo, New York
Supreme Court, New York State, Manhattan, New York
Supreme Court, New York State, Riverhead, New York
<PAGE>
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Rushmore, CRE, MAI, CHA
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Appearance as
an Expert Witness
(continued)
Tax Review Board, San Joaquin County, Stockton, California
Tax Review Board, Bangor, Maine
Tax Review Board, Schenectady, New York
Tax Review Board, Yorktown, New York
Tax Review Board, North Carolina
Tax Review Board, Philadelphia, Pennsylvania (2)
U.S. District Court, Wilmington, Delaware
U.S. District Court, Madison, Wisconsin
<PAGE>
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Partial List of Hotels/Motels, Appraised or Reviewed Internationally
North America
Canada
- Delta Hotel, Calgary
- Econo Lodge, Hull
- Hotel Lord Berri, Montreal
- Hotel Vogue, Montreal
- Hyatt Regency, Montreal
- Le Ragence Hyatt, Montreal
- Holiday Inn, Oshawa, Ontario
- Hotel Le Chantecler, Quebec
- Bond Place Hotel, Toronto
- Carlton Hotel, Toronto
- Chelsea Hotel, Toronto
- Delta Chelsea Hotel, Toronto
- Four Seasons on the Park, Toronto
- Inn on the Park, Toronto
- Novotel Missisauga, Toronto
- Ramada Inn, Toronto
- Sutton Hotel, Toronto
- Toronto Marriott East, Toronto
- Westbury Hotel, Toronto
- Burnaby Villa Inn, Vancouver
- Four Seasons Hotel, Vancouver
- Sheraton Land Mark, Vancouver
- Sheraton Plaza 500, Vancouver
- Four Seasons Yorkville Hotel, Yorkville
United States
Alabama
- MEI - Birmingham West, Bessemer
- Comfort Inn, Birmingham
- Courtyard by Marriott, Birmingham
- Courtyard by Marriott-Hoover, Birmingham
- Courtyard By Marriott/Homewood, Birmingham
- Crown Sterling Suites, Birmingham
- Fairfield Inn, Birmingham
- Holiday Inn, Birmingham
- Howard Johnson, Birmingham
- Knights Inn, Birmingham
- Ramada Inn, Birmingham
- Residence Inn by Marriott, Birmingham
- Still Waters Resort, Dadeville
- Ramada Inn, Gadsden
- Sheraton Hotel, Gulf Shores
- Courtyard by Marriott, Huntsville
- Knights Inn, Huntsville
- Marriott Hotel-Proposed, Huntsville
- La Quinta Inn, Huntsville University
- Days Inn, Mobile
- Hotel - Proposed, Mobile
- Inn-Proposed, Mobile
- Stouffer Riverview, Mobile
- Courtyard by Marriott, Montgomery
- Fairfield Inn, Montgomery
- Holiday Inn-Downtown, Montgomery
- Holiday Inn-East, Montgomery
- Howard Johnson, Montgomery
- La Quinta Inn, Montgomery
- Residence Inn, Montgomery
- Marriott's Grand Hotel, Point Clear
- Holiday Inn, Sheffield
- La Quinta, Tuscaloosa
- Masters Economy Inn, Tuscaloosa
- Proposed Extended Stay, West Mobile
Alaska
- Barratt Inn, Anchorage
- Clarion Hotel, Anchorage
- Holiday Inn, Anchorage
- Hotel Captain Hook, Anchorage
- International Airport Inn, Anchorage
- Sheraton Anchorage Hotel, Anchorage
Arizona
- Holiday Inn, Bullhead City
- Embassy Suites, Camelback
- Compri Hotel-Proposed, Chandler
- Quality Inn, Chandler
- Ramada Inn, Chandler
- AmeriSuite Hotel-Proposed, Flagstaff
- Holiday Inn, Flagstaff
- Motel 6, Flagstaff
- Rodeway Inn, Flagstaff
- Bright Angel Lodge, Grand Canyon
- El Tovar Hotel, Grand Canyon
- Grand Canyon National Park, Grand Canyon
- Kachina Lodge, Grand Canyon
- Maswik Lodge, Grand Canyon
- Moqui Lodge, Grand Canyon
- Phantom Ranch, Grand Canyon
- Thunderbird Lodge, Grand Canyon
- Yavapai Lodge, Grand Canyon
- Hampton Inn-Proposed, Holbrook
- Moqui Lodge, Kaibab National Forest
- Rodeway Inn, Kingman
- Nautical Inn Resort, Lake Havasu City
- Lexington Hotel Suites, Mesa
- Biosphere II Conference Center, Oracle
- Best Western-Per Diem, Phoenix
- Bobby McGee's, Phoenix
- Caravan Inn, Phoenix
- Compri Hotel-Proposed, Phoenix
- Courtyard by Marriott-Black Canyon, Phoenix
- Courtyard by Marriott-Mesa, Phoenix
- Crescent Phoenix Hotel, Phoenix
- Crown Sterling Suites, Phoenix
- Days Inn, Phoenix
- Doubletree Inn at Park Central, Phoenix
- Embassy Suites, Phoenix
- Embassy Suites-Biltmore, Phoenix
- Executive Park Hotel, Phoenix
- Fountain Suites Hotel, Phoenix
- Granada Royale-Camelhead, Phoenix
- Hilton Hotel, Phoenix
- Holiday Inn, Phoenix
- Hyatt Regency, Phoenix
- La Quinta Hotel, Phoenix
- Lexington Hotel Suites, Phoenix
- Newton's Sands, Phoenix
- Phoenician Golf & Tennis Resort, Phoenix
- Pointe Hilton at Tapatio Cliffs, Phoenix
- Quality Inn, Phoenix
- Ramada Inn-Airport, Phoenix
- Ramada Inn-East, Phoenix
- Ritz Carlton, Phoenix
- Sunburst Resort Hotel, Phoenix
- Hassayampa Inn, Prescott
- Clarion Inn at McCormick Ranch, Scottsdale
- Conference Center, Scottsdale
- Courtyard by Marriott-Mayo, Scottsdale
- Doubletree Inn at Scottsdale Mall, Scottsdale
- Fairfield Inn, Scottsdale
- Fashion Square Hotel, Scottsdale
- Loews Paradise Resort, Scottsdale
- Marriott Camelback Inn, Scottsdale
- Marriott Mountain Shadows, Scottsdale
- Mountain Shadows Resort, Scottsdale
- Orange Tree Resort, Scottsdale
- Ramada-Valley Ho, Scottsdale
- Red Lion's La Posada Resort, Scottsdale
- Registry Resort, Scottsdale
- Rodeway Inn, Scottsdale
- Scottsdale Princess, Scottsdale
- Sheraton Scottsdale Resort, Scottsdale
- The Phoenician, Scottsdale
- Valley Ho, Scottsdale
- John Gardiner's Enchantment, Sedona
- L'Auberege de Sedona, Sedona
- Los Abrigados, Sedona
- Orchards Inn, Sedona
- Hotel-Proposed, Sierra Vista
- Motel 6, Sierra Vista
- Temple Bar Resort, Temple Bar
- Coachman Inn - Proposed, Tolleson/Phoenix
- Tubac Resort, Tubac
- Canyon Ranch, Tucson
- Coachman Inn-Proposed, Tucson
- Courtyard by Marriott, Tucson
- Doubletree Inn, Tucson
- Embassy Suites, Tucson
- Granada Royale Hometel-E. Broadway, Tucson
- Hotel Park Tucson-Proposed, Tucson
- Lexington Suites Hotel, Tucson
- Loews Hotel, Tucson
- Resort Hotel-Proposed, Tucson
- Rodeway Inn, Tucson
- Sunbelt Commerce Center Hotel, Tucson
- La Quinta Inn, Tucson East
- Bobby McGee's, Tuscon
- Radisson Suite Hotel, Tuscon
- Ventana Canyon Golf and Racquet, Tuscon
- Ramada Inn, Union Hill
Arkansas
- Sheraton Inn, Fort Smith
- Hilton, Hot Springs
- Holiday Inn-Lake Hamilton, Hot Springs
- Courtyard by Marriott, Little Rock
- Holiday Inn, Little Rock
- Legacy Hotel, Little Rock
- Little Rock Hilton, Little Rock
- Masters Economy Inn, Little Rock
- Red Carpet Inn, Little Rock
- Super 8, Little Rock
- Masters Economy Inn, North Little Rock
- Masters Economy Inn, Protho-Junction
- Holiday Inn, Texarkana
California
- Hampton Inn, Agoura Hills
- Ramada Inn, Agoura Hills
- Residence Inn-Proposed, Agoura Hills
- Island Motel, Almeda
- Anaheim Hilton & Towers, Anaheim
- Anaheim Park Motor Inn, Anaheim
- Anaheim Plaza Hotel, Anaheim
- Best Western Pavillions, Anaheim
- Carousel Inn, Anaheim
- Conestoga Hotel, Anaheim
- Courtyard by Marriott, Anaheim
- Crown Sterling Suites, Anaheim
- Disneyland Hotel, Anaheim
- Golden Forest Motel, Anaheim
- Hampton Inn, Anaheim
- Hilton, Anaheim
- Holiday Inn Anaheim Center, Anaheim
- Hotel-Proposed, Anaheim
- Marriott Hotel, Anaheim
- Pan Pacific Hotel, Anaheim
- Pitcairn Motel, Anaheim
- Raffles Inn, Anaheim
- Ramada Maingate/Disneyland Hotel, Anaheim
- Roger Morris Inn, Anaheim
- Stovall's Inn, Anaheim
- The Station Inn, Anaheim
- Travelodge Inn at the Park, Anaheim
- AmeriSuite, Anaheim Hills
- Comfort Inn, Anahiem
- Mansouri Hotel, Antioch
- Red Lion, Apple Valley
- Hampton Inn, Arcadia
- Residence Inn, Arcadia
- Hilton Lodge, Arrowhead Lake
- Auburn Inn, Auburn
- Sleep Inn, Auburn
- Allstar Inn, Bakersfield
- Clarion Hotel, Bakersfield
- Courtyard by Marriott, Bakersfield
- Economy Inn, Bakersfield
- Ramada Inn, Bakersfield
- Red Lion Hotel, Bakersfield
- Residence Inn, Bakersfield
- Rodeway Inn, Bakersfield
- Hilton Hotel, Baldwin Park
- San Gabriel Valley Hotel, Baldwin Park
- The Hilton Hotel, Baldwin Park
- Allstar Inn, Barstow
- Economy Inn, Barstow
- Marriott Berkeley Marina, Berkeley
- Shattuck Hotel, Berkeley
- Beverly Hills Hotel, Beverly Hills
- Beverly Rodeo Hotel, Beverly Hills
- Beverly Wilshire Hotel, Beverly Hills
- Hilton Hotel-Cresthil, Beverly Hills
- L'Ermitage, Beverly Hills
- Peninsula Hotel, Beverly Hills
- Best Western, Big Bear Lake
- Big Bear Hotel, Big Bear Lake
- Big Bear Lake Resort, Big Bear Lake
- Big Bear Towering Pines, Big Bear Lake
- Motel 6, Big Bear Lake
- Post Ranch, Big Sur
- Ventana Inn, Big Sur
- Rodeway Inn, Blythe
- Courtyard by Marriott, Brea
- Holiday Inn, Brentwood
- Courtyard by Marriott, Buena Park
- Fairfield Inn, Buena Park
- Hampton Inn, Buena Park
- Holiday Inn, Buena Park
- Crowne Sterling Suites, Burlingame
- Hyatt Regency, Burlingame
- Mariott Hotel - SFO, Burlingame
- Marriott, Burlingame
- Marriott-San Francisco Airport, Burlingame
- Radisson Hotel-Proposed, Burlingame
- Sheraton Hotel, Burlingame
- Courtyard by Marriott, Camarillo
- Best Western Fireside Inn, Cambria
- Cambria Pines Lodge, Cambria
- Residence Inn, Campbell
- Hotel-Proposed, Capitola
- Resort Hotel, Spa & Conference Ctr., Capitola
- Allstar Inn, Carlsbad
- Carlsbad Inn, Carlsbad
- Inn of America, Carlsbad
- La Costa Hotel and Spa, Carlsbad
- Olympic Resort Hotel, Carlsbad
- Tickle Pink Inn, Carmel
- Allstar Inn, Carpinteria
- Desert Princess Country Club, Cathedral City
- Royce Suites Hotel, Cathedral City
- Digger Bay, Central Valley
- Marriott Hotel-Proposed, Century City
- Westin Century Plaza Hotel, Century City
- Neighborhood Inn-Proposed, Chatsworth
- Red Lion Hotel, Chico
- Otay Valley Inn, Chula Vista
- Travelodge-Otay Valley, Chula Vista
- Ramada Inn, City of Commerce
- Sheraton Hotel, City of Industry
- Allstar Inn, Coalinga
- Harris Ranch Restaurant/Inn, Coalinga
- Howard Johnson, Colton
- Best Western Willow Tree Inn, Compton
- Concord Hotel, Concord
- Hilton Hotel, Concord
- The Trees Inn, Concord
- Motel 6, Corona
- Hotel del Coronado, Coronado
- Loews Coronado Bay Resort, Coronado
- Madera Village Inn, Corte Madera
- Ha' Penny Inn, Costa Mesa
- La Quinta Hotel, Costa Mesa
- Marriott Suites, Costa Mesa
- Red Lion Hotel, Costa Mesa
- Residence Inn, Costa Mesa
- Pacifica Hotel, Culver City
- Ramada Inn, Culver City
- Courtyard by Marriott, Cupertino
- Doubletree Hotel, Cupertino
- Doubletree Hotel, Dana Point
- Spa-Proposed, Danville
- El Rancho, Davis
- Furnace Creek Resort, Death Valley
- Stovepipe Wells Village, Death Valley
- Hilton, Del Mar
- Days Inn, Diamond Bar
- Compri Hotel, El Segundo
- Proposed Summerfield, El Segundo
- Days Inn, Emeryville
- Holiday Inn-Bay Bridge, Emeryville
- Lyons Restaurant, Emeryville
- Budget Motel, Encinitis
- Marriott Tenaya Lodge-Proposed, Fishcamp
- Holiday Inn, Fort Myers Beach
- All Suites Hotel/Athletic Club, Foster City
- Clubtel-Proposed, Foster City
- Courtyard by Marriott, Foster City
- Holiday Inn, Foster City
- Courtyard by Marriott, Fremont
- Fremont Hotel, Fremont
- Motel 6, Fremont
- Residence Inn, Fremont
- Allstar Inn, Fresno
- AmeriSuite, Fresno
- Chateau Inn, Fresno
- Courtyard by Marriott, Fresno
- Economy Inn, Fresno
- Hacienda, Fresno
- Holiday Inn, Fresno
- Holiday Inn-Fresno Airport, Fresno
- Howard Johnson Motel, Fresno
- Piccadilly Inn, Fresno
- Travelers Inn, Fresno
- Travelers Lodge, Fresno
- Griswold's Hotel, Fullerton
- Holiday Inn, Fullerton
- Marriott Hotel, Fullerton
- Hotel-Proposed, Garden Grove
- Hyatt Regency Alicante, Garden Grove
- Princess Hotel, Garden Grove
- Motel 6, Gilroy
- Hyatt Regency-Proposed, Goleta
- Allstar Inn, Hacienda Heights
- Courtyard by Marriott, Hacienda Heights
- Half Moon Bay Lodge, Half Moon Bay
- Courtyard by Marriott, Harbor Boulevard
- Grosvenor, Harborside-Pt. Loma
- Inn at Foss Creek, Healdsburg
- Chateau Marmont, Hollywood
- Hollywood Palm Hotel, Hollywood
- Sunset Towers Hotel, Hollywood
- Waterfront Hilton Hotel, Huntington Beach
- Compri Hotel, Hutton Centre
- Grand Champions Resort, Indian Wells
- Stouffer Esmerelda Resort, Indian Wells
- Courtyard By Marriott, Irvine
- Courtyard by Marriott - Proposed, Irvine
- Embassy Suites, Irvine
- Hilton Hotel, Irvine
- Holiday Inn, Irvine
- Hyatt Hotel, Irvine
- La Quinta-Proposed, Irvine
- Marriott Hotel, Irvine
- Marriott-Proposed, Irvine
- Registry Hotel, Irvine
- Residence Inn-Proposed, Irvine
- Amador Inn, Jackson
- Embassy Suites, La Jolla
- Hotel-Proposed, La Jolla
- La Jolla Property, La Jolla
- La Jolla Village Inn, La Jolla
- Marriott Hotel, La Jolla
- Residence Inn, La Jolla
- Days Inn-Proposed, La Palma
- PGA West Resort - Proposed, La Quinta
- Lafayette Park Hotel, Lafayette
- Laguna Shores, Laguna Beach
- Holiday Inn, Laguna Hills
- Ryokan Hotel-Proposed, Laguna Hills
- Villa Valencia, Laguna Hills
- Ritz Carlton, Laguna Niguel
- Lake Mohave Resort, Lake Mohave
- Resort at Squaw Creek, Lake Tahoe
- Courtyard by Marriott, Larkspur Landing
- Hilton, Las Cruces
- Surf and Sand Hotel, Leguna Beach
- Holiday Inn, Lido Beach
- Motel-Proposed, Little Lake
- Residence Inn, Livermore
- Residence Inn-Proposed, Livermore
- Breakers Hotel, Long Beach
- Holiday Inn, Long Beach
- Holiday Inn Airport, Long Beach
- Marriott Hotel-Long Beach Airport, Long Beach
- Marriott Hotel-Proposed, Long Beach
- Ramada Renaissance Hotel, Long Beach
- Residence Inn, Long Beach
- Sheraton Long Beach & Office Tower, Long Beach
- Airport Park Hotel, Los Angeles
- Bel Age, Los Angeles
- Biltmore Hotel, Los Angeles
- Century Inn, Los Angeles
- Checkers Hotel, Los Angeles
- Courtyard by Marriott-Irvine Main, Los Angeles
- Courtyard by Marriott-LAX Airport, Los Angeles
- Crown Sterling Suites, Los Angeles
- Days Inn, Los Angeles
- Econo Lodge-Proposed, Los Angeles
- Embassy Suites, Los Angeles
- Embassy Suites-LAX-Proposed, Los Angeles
- Four Seasons, Los Angeles
- Hampton Inn-LAX, Los Angeles
- Herrick and Campbell, Los Angeles
- Hilton & Towers-LAX, Los Angeles
- Hilton Hotel, Los Angeles
- Holiday Inn Crowne Plaza-LAX, Los Angeles
- Le Montrose Hotel, Los Angeles
- Ma Maison Sofitel, Los Angeles
- Macklowe Hotel, Los Angeles
- Marriott Century City, Los Angeles
- MCA Hotel-Proposed, Los Angeles
- New Otani Hotel, Los Angeles
- Playa Vista Development, Los Angeles
- Stouffer Concourse Hotel, Los Angeles
- Westin Bonaventure, Los Angeles
- Westwood Marquis Hotel, Los Angeles
- Los Gatos Lodge, Los Gatos
- Macienda Inn, Los Gatos
- Toll House Inn, Los Gatos
- Residence Inn, Manhattan Beach
- All Suite Hotel, Marina Del Rey
- Marina Beach Hotel, Marina del Rey
- Marina del Rey Hotel and Marina, Marina del Rey
- Marina Suites Hotel, Marina Del Rey
- Marriott Marina Del Rey, Marina Del Rey
- Residence Inn, Meriden
- Quality Suites Hotel - Proposed, Millbrae
- Beverly Heritage Hotel, Milpitas
- Crown Sterling Suites, Milpitas
- Holiday Inn, Milpitas
- Courtyard by Marriott, Mira Mesa
- Grosvenor, Mission Bay
- Motel Orleans, Modesto
- Red Lion Hotel, Modesto
- Red Lion-Proposed, Modesto
- Carmel Mission Inn, Monterey
- Doubletree Inn, Monterey
- Former Monterey Hilton Hotel, Monterey
- Monterey Plaza, Monterey
- Plaza Hotel, Monterey
- Sheraton Hotel, Monterey
- Pebble Beach Company, Monterey County
- Inn at Morro Bay, Morro Bay
- Residence Inn, Mountain View
- Inn at Napa Valley, Napa
- Best Western Inn, Napa Valley
- Clarion Hotel-Napa Valley, Napa Valley
- Silverado, Napa Valley
- Ha'Penny Motel, National City
- Allstar Inn, Needles
- Hilton-Newark/Fremont, Newark
- Four Seasons Hotel, Newport Beach
- Hotel Meridien, Newport Beach
- Hyatt Newporter, Newport Beach
- Newporter Resort, Newport Beach
- Sheraton, Newport Beach
- Days Inn-Proposed, North Hollywood
- Northstar, North Lake Tahoe
- Ramada Inn, Norwalk
- Impact Study - Proposed Hotel, Oakdale
- Hilton Inn, Oakland
- Holiday Inn, Oakland
- Holiday Inn-Oakland Airport, Oakland
- Parc Oakland Hotel, Oakland
- Resort - Proposed, Olympic Valley
- Resort at Squaw Creek-Proposed, Olympic Valley
- Clarion Hotel, Ontario
- Compri Hotel, Ontario
- Fairfield Inn, Ontario
- Holiday Inn, Ontario
- Lexington Hotel Suites, Ontario
- Red Lion Hotel, Ontario
- Doubletree Hotel, Orange
- Woodfin Suites, Orange
- Embassy Suites, Palm Desert
- Marriott Desert Springs, Palm Desert
- Canyon Resort, Palm Springs
- Compri Hotel-Proposed, Palm Springs
- Courtyard by Marriott, Palm Springs
- Desert Princess, Palm Springs
- Grand Champions Resort, Palm Springs
- International Hotel and Resort, Palm Springs
- Ocotillo Lodge, Palm Springs
- Palm Canyon, Palm Springs
- PGA West Resort-Proposed, Palm Springs
- Spa Hotel at Mineral Springs, Palm Springs
- Westin Hotel, Palm Springs
- Grosvenor, Palmdale
- Super 8, Palmdale
- Cowper Square, Palo Alto
- Garden Court, Palo Alto
- Holiday Inn, Palo Alto
- Stanford Park, Palo Alto
- Marriott, Paradise Valley
- All Suite Hotel-Proposed, Pasadena
- Doubletree Hotel, Pasadena
- Holiday Inn, Pasadena
- Cascade Ranch Lodge, Pescadero
- Elk Lodge, Petaluma
- Hotel Petaluma, Petaluma
- Hilton-Proposed, Pismo Beach
- Hilton-Sea Point, Pismo Beach
- Holiday Inn, Pismo Beach
- Hotel-Proposed, Pismo Beach
- Pismo II, Pismo Beach
- Fairfield Inn, Placentia
- Residence Inn, Placentia
- Howard Hughes Center, Playa Vista
- Pleasant Hill Inn, Pleasant Hill
- Residence Inn, Pleasant Hill
- Club Hilton Hotel-Proposed, Pleasanton
- Compri Hotel, Pleasanton
- Courtyard by Marriott, Pleasanton
- Hilton, Pleasanton
- Holiday Inn, Pleasanton
- Pleasanton Creek, Pleasanton
- Shilo Inn - Hilltop, Pomona
- Compri Hotel, Rancho Bernardo
- Radisson Suites, Rancho Bernardo
- Comfort Inn Motel, Rancho Cordova
- Courtyard by Marriott, Rancho Cordova
- Economy Inn, Rancho Cordova
- El Rancho, Rancho Cordova
- Quality Suites-Proposed, Rancho Cordova
- Sheraton Sunrise, Rancho Cordova
- Marriott Rancho Las Palmas, Rancho Mirage
- Mission Hills Hotel, Rancho Mirage
- Resort Hotel-Proposed, Rancho Mirage
- Westin Mission Hills Resort, Rancho Mirage
- Bridge Bay Resort, Redding
- Grand Manor Inn, Redding
- La Quinta Inn, Redding
- Motel 6, Redding
- Motel Orleans, Redding
- Red Lion Inn, Redding
- Shasta Inn, Redding
- Portofino Hotel & Yacht Club, Redondo Beach
- Sheraton, Redondo Beach
- Sofitel Redwood Shores, Redwood
- Days Inn, Richmond
- Best Western Carraige Inn, Ridgecrest
- Days Inn, Riverside
- Mission Inn-Proposed, Riverside
- Omni Mission Inn, Riverside
- Sheraton Hotel, Riverside
- Red Lion Inn, Rohnert Park
- Crown Sterling Suites, S.San Fransicso
- Allstar Inn, Sacramento
- Arco Arena II-Proposed, Sacramento
- Arco Park, Sacramento
- Catering Center - Proposed, Sacramento
- Clarion Hotel, Sacramento
- Compri Hotel-Proposed, Sacramento
- Courtyard by Marriott, Sacramento
- Courtyard by Marriott-S. Natomas, Sacramento
- Hilton Hotel, Sacramento
- Holiday Inn-Capital Plaza, Sacramento
- Hotel-Proposed, Sacramento
- Hyatt Arbitrat, Sacramento
- Hyatt Regency, Sacramento
- La Quinta Hotel, Sacramento
- Motel Orleans, Sacramento
- Radisson Hotel, Sacramento
- Red Lion Inn, Sacramento
- Residence Inn, Sacramento
- Sacramento Inn, Sacramento
- Sierra Inn, Sacramento
- Sterling Hotel, Sacramento
- Travelers Inn, Sacramento
- Woodlake Inn, Sacramento
- Harvest Inn, Saint Helena
- Courtyard by Marriott, San Bruno
- San Carlos Motel Development, San Carlos
- Atlas Hotels/Mission Valley Inn, San Diego
- Best Western Seven Seas Motor Lodge, San Diego
- Budget Motel of America, San Diego
- Catamaran Resort Hotel, San Diego
- Center Pointe Development, San Diego
- Comfort Inn, San Diego
- Courtyard by Marriott-Mira Mesa, San Diego
- Doubletree Hotel, San Diego
- Embassy Suites, San Diego
- Executive Lodge, San Diego
- Hanalei Hotel, San Diego
- Harbor Island Hotel-Proposed, San Diego
- Harborside Inn-Point Loma, San Diego
- Harbortown Marina Resort, San Diego
- Holiday Inn Montgomery Airport, San Diego
- Holiday Inn-Embarcadero, San Diego
- Holiday Inn-Harbor View, San Diego
- Horton Grand Saddlery, San Diego
- Horton Park Plaza Hotel, San Diego
- Howard Johnson Hotel, San Diego
- Inter-Continental Hotel & Marina, San Diego
- Kings Inn, San Diego
- La Jolla Village Inn, San Diego
- La Quinta Hotel, San Diego
- Marriott Hotel-Mission Valley, San Diego
- Marriott Twin Towers and Marina, San Diego
- Mission Valley Inn, San Diego
- Omni Hotel, San Diego
- Radisson Hotel, San Diego
- Ramada Inn, San Diego
- Ramada Limited Suites, San Diego
- Ramada Old Town, San Diego
- Ramada Rancho Penasquitos, San Diego
- Red Lion Inn, San Diego
- Regency Plaza Hotel, San Diego
- San Diego Marriott, San Diego
- Seven Seas Lodge, San Diego
- Sheraton Grand, San Diego
- Sheraton Harbor Island East, San Diego
- Super 8-Point Loma, San Diego
- Symphony Towers, San Diego
- Town and Country Hotel, San Diego
- Travelodge Hotel Plaza, San Diego
- U.S. Grant Hotel, San Diego
- Westin-Proposed, San Diego
- Abagail Inn, San Francisco
- Bellevue Hotel, San Francisco
- Cable Motor Inn, San Francisco
- California Cafe, San Francisco
- Campton Place, San Francisco
- Cartwright Hotel, San Francisco
- Chancellor Hotel, San Francisco
- Clarion Inn-San Francisco Airport, San Francisco
- Comfort Inn, San Francisco
- Courtyard by Marriott-Airport, San Francisco
- Embarcadero Inn, San Francisco
- Fairmont Hotel, San Francisco
- Grand Hyatt, San Francisco
- Grosvenor Clift Hotel, San Francisco
- Harbor Court Hotel, San Francisco
- Hilton Hotel, San Francisco
- Holiday Inn - Union Square, San Francisco
- Holiday Inn Crowne Plaza, San Francisco
- Holiday Inn-Civic Center, San Francisco
- Holiday Inn-Fisherman's Wharf, San Francisco
- Holiday Inn-Golden Gateway, San Francisco
- Holiday Inn-South, San Francisco
- Holiday Lodge, San Francisco
- Hotel Diva, San Francisco
- Hotel Meridien, San Francisco
- Hotel Union Square, San Francisco
- Hotel-Proposed, San Francisco
- Hyatt Fisherman's Wharf, San Francisco
- Hyatt Regency Embarcadero, San Francisco
- Inn at Fisherman's Wharf, San Francisco
- Inn at the Opera, San Francisco
- Inn-Proposed, San Francisco
- Juliana Hotel, San Francisco
- King George Hotel, San Francisco
- La Quinta Inn, San Francisco
- La Quinta-Airport, San Francisco
- Lambourne Hotel, San Francisco
- Laurel Motor Inn, San Francisco
- Majestic Hotel, San Francisco
- Manx Hotel, San Francisco
- Mark Twain, San Francisco
- Marriott, San Francisco
- Marriott San Francisco-Proposed, San Francisco
- Marriott-Airport, San Francisco
- Orchard Hotel, San Francisco
- Pan Pacific Hotel, San Francisco
- Parc 55 Hotel, San Francisco
- Park Hyatt Hotel, San Francisco
- Portman Hotel, San Francisco
- Prescott Hotel, San Francisco
- Queen Anne Hotel, San Francisco
- Ramada Hotel, San Francisco
- Regis Hotel, San Francisco
- Ritz-Carlton Hotel, San Francisco
- San Franciscan, San Francisco
- San Francisco Hotel, San Francisco
- Savoy Hotel, San Francisco
- Sheraton Palace Hotel, San Francisco
- Sheraton-Fisherman's Wharf, San Francisco
- Sir Francis Drake Hotel, San Francisco
- Stanford Court, San Francisco
- Stouffer Stanford Court Hotel, San Francisco
- Super 8-Fisherman's Wharf, San Francisco
- Westin St. Francis, San Francisco
- Crowne Sterling Suites, San Francisco - South
- Olympic Club Golf Course, San Francisco/San Mateo
- Budget Inn, San Jose
- Courtyard by Marriott, San Jose
- Cozy 8 Arena Hotel, San Jose
- Fairmont Hotel, San Jose
- Holiday Inn, San Jose
- Ramada Renaissance, San Jose
- Red Lion Inn, San Jose
- Islander Motel, San Leandro
- Apple Farm Inn, San Luis Obispo
- Embassy Suites, San Luis Obispo
- Holiday Inn, San Luis Obispo
- Los Nomados Resort, San Luis Obispo
- Twin Oaks Golf Course, San Marcos
- Dunfey San Mateo Hotel, San Mateo
- Compri Hotel-Proposed, San Pedro
- Embassy Suites Hotel, San Rafael
- Marriott Hotel-Proposed, San Ramon
- Residence Inn, San Ramon
- AAA Inn, Santa Ana
- California Palms Hotel, Santa Ana
- Comfort Inn, Santa Ana
- Compri Hotel, Santa Ana
- Embassy Suites Santa Ana, Santa Ana
- Executive Lodge, Santa Ana
- Howard Johnson, Santa Ana
- Quality Inn, Santa Ana
- Ramada Inn-Orange County, Santa Ana
- El Encanto Hotel, Santa Barbara
- Fess Parker's Red Lion Resort, Santa Barbara
- Four Seasons Hotel, Santa Barbara
- Montecito Inn, Santa Barbara
- San Ysidro Ranch, Santa Barbara
- Santa Barbara Inn, Santa Barbara
- Biltmore Hotel & Suites, Santa Clara
- Days Inn, Santa Clara
- Doubletree Hotel, Santa Clara
- Embassy Suites, Santa Clara
- Inn At Saratoga, Santa Clara
- Marriott Hotel, Santa Clara
- Quality Suites Hotel, Santa Clara
- Dream Inn, Santa Cruz
- Hilton, Santa Maria
- Motel 6, Santa Maria
- Econo Lodge-Proposed, Santa Monica
- Holiday Inn, Santa Monica
- Holiday Inn at the Pier, Santa Monica
- Park Hyatt Hotel, Santa Monica
- Santa Monica Beach Hotel, Santa Monica
- Santa Monica/Slatkin, Santa Monica
- Allstar Inn, Santa Rosa
- Doubletree Hotel, Santa Rosa
- Fountaingrove Inn, Santa Rosa
- Holiday Inn, Santa Rosa
- Round Barn Inn-Proposed, Santa Rosa
- Sheraton Round Barn, Santa Rosa
- Days Inn, Seaside
- Embassy Suites, Seaside
- Seaside 8 Motel, Seaside
- Valley Radisson, Sherman Oaks
- Red Lion, Sonoma
- Sonoma Mission Inn, Sonoma
- Holiday Inn - Proposed, Sonora
- Timberwolf Lodge, South Lake Tahoe
- Holiday Inn, South San Francisco
- Hotel-Proposed, South San Francisco
- Meadowood Resort, St. Helena
- Hilton Hotel, Stockton
- Holiday Inn, Stockton
- La Quinta Hotel, Stockton
- Motel Orleans, Stockton
- Paradise Point Manna, Stockton
- Sheraton-Proposed, Stockton
- Hilton, Sunnyvale
- Holiday Inn, Sunnyvale
- Neighborhood Suites, Sunnyvale
- Ramada Inn, Sunnyvale
- Sunnyvale Hilton, Sunnyvale
- Temecula Creek Inn, Temecula Creek
- Westlake Plaza Hotel, Thousand Oaks
- Courtyard by Marriott, Torrance
- Holiday Inn, Torrance
- Marriott Hotel, Torrance
- Residence Inn, Torrance
- Holiday Inn, Union City
- MCA Hotel-Proposed, Universal City
- Comfort Inn, Vallejo
- Holiday Inn, Van Nuys
- La Quinta Hotel, Ventura
- Ocean Resorts, Ventura
- Sheraton, Ventura
- Greentree Inn, Victorville
- Doubletree Inn, Walnut Creek
- Parkside Hotel, Walnut Creek
- Ramada Renaissance Hotel, Walnut Creek
- Royce Hotel-Proposed, Walnut Creek
- Walnut Creek Project, Walnut Creek
- Hampton Inn, West Covina
- Le Bel Age, West Hollywood
- Le Dufy, West Hollywood
- Le Mondrian Hotel, West Hollywood
- Hilton, Whittler
- Hotel & Conference Center-Proposed, Woodland
- Marriott Hotel-Woodland Hills, Woodland Hills
- Skylonda Retreat, Woodside
- Compri Hotel-Proposed, Yorba Linda
- Marriott-Tenaya Lodge, Yosemite
- Motel Orleans, Yuba City
Colorado
- Days Inn, Arapahoe
- Continental Inn, Aspen
- Ritz-Carlton Hotel-Proposed, Aspen
- Hampton Inn, Aurora
- Holiday Inn, Aurora
- Radisson Hotel, Aurora
- Radisson Southeast, Aurora
- Raffles Hotel, Aurora
- Comfort Inn, Avon
- Boulder Hotel-Downtown, Boulder
- Clarion Hotel, Boulder
- Courtyard by Marriott, Boulder
- Doubletree Hotel-Proposed, Boulder
- Hilton Harvest House, Boulder
- Holiday Inn, Boulder
- Interlocken Conference Resort-Prop., Boulder
- Proposed Golf Course, Boulder
- Residence Inn, Boulder
- Hilton, Breckenridge
- Ski Lodge-Proposed, Breckenridge
- Interlocken Conference Center, Broomfield
- Interlocken Conference Center-Prop., Broomfield
- Embassy Suites, Colorado Springs
- Hilton, Colorado Springs
- Howard Johnson, Colorado Springs
- Le Baron Hotel, Colorado Springs
- Marriott, Colorado Springs
- Quality Inn, Colorado Springs
- Red Lion Inn, Colorado Springs
- Sheraton Inn, Colorado Springs
- Grand Butte Hotel, Crested Butte
- Best Western Regency, Denver
- Brown Palace, Denver
- Clarion Hotel-Denver Airport, Denver
- Courtyard by Marriott-Airport, Denver
- Courtyard by Marriott-Southeast, Denver
- Days Inn, Denver
- Denver Airport Hilton Inn, Denver
- Doubletree Hotel, Denver
- Embassy Suites, Denver
- Embassy Suites-Airport, Denver
- Hilton-Technical Center, Denver
- Holiday Inn-Downtown, Denver
- Holiday Inn-West, Denver
- Jackson's Hole Sport, Denver
- Marriott-Southeast, Denver
- Marriott-West, Denver
- Radisson Hotel, Denver
- Red Lion Hotel, Denver
- Regency Inn, Denver
- La Quinta Inn, Denver - Airport
- La Quinta, Denver - South
- Red Lion Inn, Durango
- Hilton-Denver, Englewood
- Residence Inn, Englewood
- Scanticon Conference Center, Englewood
- Marriott Hotel-Proposed, Fort Collins
- Holiday Inn, Golden
- Marriott-Denver West, Golden
- Ramada Inn, Grand Junction
- Sheraton-Proposed, Keystone
- Compri Hotel, Lakewood
- Hampton Inn, Lakewood
- Sheraton Inn, Steamboat Springs
- Proposed Hotel, Telluride
- Days Inn, Vail
- Doubletree Hotel, Vail
- Lodge at Vail, Vail
- Marriott's Mark Resort, Vail
- Westin Vail Resort, Vail
- Ramada Hotel, Westminster
- Winter Park Resort, Winter Park
Connecticut
- Chester Inn-Chester, Chester
- Inn-Proposed, Chester
- Super 8-Proposed, Cromwell
- Danbury Hilton & Towers, Danbury
- Residence Inn, Danbury
- Holiday Inn, Darien
- Howard Johnson Lodge, Darien
- Ramada Inn, Darien
- Holiday Inn, East Hartford
- Howard Johnson Lodge, East Lyme
- Days Inn-Proposed, Enfield
- Greenwich Habor Inn, Greenwich
- Howard Johnson Lodge, Greenwich
- Showboat Inn, Greenwich
- Hotel-Proposed, Groton
- Hilton Hotel, Hartford
- Holiday Inn-Proposed, Hartford
- Motel 6, Hartford
- Ramada Inn, Hartford
- Sheraton Tobacco Valley Inn, Hartford
- Summit Hotel, Hartford
- Super 8 Motel, Hartford
- Susse Chalet, Hartford
- Residence Inn By Marriott, Meriden
- Holiday Inn, Milford
- Susse Chalet, Milford
- Howard Johnson Lodge, Mystic
- Mystic Ramada Inn, Mystic
- Holiday Inn, New Britain
- Ramada Inn, New Britain
- Colony Inn, New Haven
- Holiday Inn, New Haven
- Howard Johnson, New Haven
- Quality Inn, New Haven
- Residence Inn, New Haven
- Radisson Hotel, New London
- Best Western-Proposed, New Milford
- Courtyard by Marriott, Norwalk
- Holiday Inn, Norwalk
- Howard Johnson, Norwalk
- Ramada Inn, Norwalk
- Susse Chalet, Rocky Hill
- Ramada Hotel-Proposed, Shelton
- Residence Inn - Shelton, Shelton
- Heritage Village, Southbury
- Southbury Hotel, Southbury
- Susse Chalet, Southington
- Days Inn, Stamford
- Executive Hotel, Stamford
- Harley Hotel, Stamford
- Holiday Inn-Crowne Plaza, Stamford
- Inn at Mill River, Stamford
- Le Pavillon Hotel, Stamford
- Marriott, Stamford
- Radisson Tara Hotel, Stamford
- Sheraton, Stamford
- Best Western-Proposed, Stratford
- Stratford Motor Lodge, Stratford
- Marriott Hotel, Trumbull
- Courtyard by Marriott, Wallingford
- Susse Chalet, Wallingford
- Howard Johnson Plaza Hotel, Waterbury
- Super 8-Proposed, Waterbury
- Residence Inn-Proposed, Waterford
- Holiday Inn, Westbury
- The Island Inn, Westbury
- Courtyard by Marriott, Windsor
- Sheraton Tobacco Valley Inn, Windsor
- Holiday Inn-Proposed, Windsor Locks
Delaware
- Wilmington Hilton, Claymont
- Rusty Rudder, Dewey Beach
- Residence Inn-Proposed, Newark
- Hilton Hotel, Wilmington
- Hotel-Proposed, Wilmington
- Marriott Suites, Wilmington
- Residence Inn-Proposed, Wilmington
District of Columbia
- All Suite Hotel - Proposed, Washington
- Bellevue Hotel, Washington
- Canterbury Hotel, Washington
- Capital Hilton, Washington
- Capitol Hill Hotel, Washington
- Castleton Hotel, Washington
- Comfort Inn, Washington
- Convention Center Inn, Washington
- Dupont Plaza, Washington
- Embassy Row Hotel, Washington
- Fairfax Hotel, Washington
- Fairmont Hotel, Washington
- Four Seasons Hotel, Washington
- General Scott Inn, Washington
- Georgetown Hotel, Washington
- Grand Hotel, Washington
- Grand Hyatt, Washington
- Hampshire House, Washington
- Harambee House, Washington
- Hay Adams Hotel, Washington
- Holiday Inn Crowne Plaza, Washington
- Holiday Inn-Capitol, Washington
- Holiday Inn-Georgetown, Washington
- Holiday Inn-Governor House, Washington
- Hotel Washington, Washington
- Howard Johnson, Washington
- Hyatt Regency-Capitol, Washington
- Hyatt-Convention Center, Washington
- International Inn, Washington
- Intrigue Hotel, Washington
- Jefferson Hotel, Washington
- Lombardy Tower Apartment Hotel, Washington
- Madison Hotel, Washington
- Manger Annapolis Hotel, Washington
- Manger Hamilton Hotel, Washington
- Manger Hay Adams Hotel, Washington
- Marriott-Key Bridge, Washington
- Mayflower Hotel, Washington
- Omni Georgetown Hotel, Washington
- Omni Shoreham Hotel, Washington
- Park Terrace Hotel, Washington
- Phoenix Park Hotel, Washington
- Plaza Hotel, Washington
- Potomac Hotel Group, Washington
- Quality Inn-Capitol Hill, Washington
- Quality Inn-Downtown, Washington
- Ramada Inn-Central, Washington
- Ramada Renaissance Hotel, Washington
- Ritz-Carlton, Washington
- River Inn, Washington
- Riverside Towers, Washington
- Sheraton City Centre, Washington
- Sheraton Grand Hotel, Washington
- Shoreham Hotel, Washington
- St. James, Washington
- State Plaza, Washington
- Statler Hilton Hotel, Washington
- Washington Hilton, Washington
- Washington Plaza, Washington
- Watergate Hotel, Washington
- Wyndham Bristol Hotel, Washington
Florida
- Holiday Inn, Altamonte Springs
- La Quinta, Altamonte Springs
- Turnberry Isle Resort, Aventura
- Boca Raton Hotel and Club, Boca Raton
- Boca West, Boca Raton
- Deerfield Beach Hilton, Boca Raton
- Embassy Suites, Boca Raton
- Park Place Suite Hotel, Boca Raton
- Petite Suites, Boca Raton
- Residence Inn, Boca Raton
- Days Inn, Brandenton
- South Seas Resort, Captive Island
- Days Inn, Clearwater
- Days Inn-Proposed, Clearwater
- Holiday Inn - Central/Clearwater, Clearwater
- La Quinta Inn, Clearwater
- Sheraton Sand Key Hotel, Clearwater
- Holiday Inn - Gulfview South, Clearwater Beach
- Holiday Inn - Surfside North, Clearwater Beach
- Howard Johnson, Clermont
- Econolodge, Cocoa Beach
- Hilton Hotel, Cocoa Beach
- Holiday Inn, Cocoa Beach
- Howard Johnson, Cocoa Beach
- Perkins Restaurant, Cocoa Beach
- Coconut Grove Hotel, Coconut Grove
- Mayfair House, Coconut Grove
- Proposed Hampton Inn, Coconut Grove
- Biltmore Hotel, Coral Gables
- Holiday Inn, Coral Gables
- Holiday Inn (Court), Coral Gables
- Plantation Hotel, Crystal River
- Sheraton Inn, Cypress Gardens
- Budget Inn, Davenport
- Daytona Beach Surfside Regency, Daytona Beach
- Howard Johnson, Daytona Beach
- La Quinta Inn, Daytona Beach
- Pirates Cove, Daytona Beach
- Sheraton Inn, Daytona Beach
- Crown Sterling Suites, Deerfield Beach
- Days Inn, Deerfield Beach
- Hilton Hotel, Deerfield Beach
- Horizon Club, Deerfield Beach
- Sheraton Inn, Deland
- Hilton Hotel, Disney World
- Holiday Inn, Edgewater
- Knights Inn, Florida City
- AmeriSuites Hotel-Proposed, Fort Lauderdale
- Bahia Mar Hotel, Fort Lauderdale
- Comfort Suites, Fort Lauderdale
- Compri Hotel-Proposed, Fort Lauderdale
- Costa Del Sol, Fort Lauderdale
- Crown Sterling Suites, Fort Lauderdale
- Days Inn, Fort Lauderdale
- Embassy Suites Hotel, Fort Lauderdale
- Executive House, Fort Lauderdale
- Hilton Hotel, Fort Lauderdale
- Hilton Inverrary, Fort Lauderdale
- Holiday Inn - Galleria, Fort Lauderdale
- Holiday Inn - North Beach, Fort Lauderdale
- Holiday Inn-Proposed, Fort Lauderdale
- Marriott Harbor Beach Hotel, Fort Lauderdale
- Marriott Hotel & Marina, Fort Lauderdale
- Marriott Hotel-Cypress Road, Fort Lauderdale
- Pier 66 Hotel and Marina, Fort Lauderdale
- Port Everglades Hotel, Fort Lauderdale
- Stouffer Hotel, Fort Lauderdale
- Days Inn, Fort Meyers
- Courtyard by Marriott, Fort Myers
- Holiday Inn, Fort Myers
- La Quinta Hotel, Fort Myers
- Sheraton Harbor Place-Proposed, Fort Myers
- Sheraton Motor Inn, Fort Myers
- Proposed Hotel, Fort Myers Beach
- American Way, Fort Pierce
- Days Inn, Fort Walton Beach
- Holiday Inn - Airport, Fort.Lauderdale
- Days Inn-University Center, Gainesville
- Fairfield Inn, Gainesville
- Howard Johnson Lodge-I-75, Gainesville
- La Quinta Hotel, Gainesville
- University Centre Hotel, Gainesville
- Holiday Inn, Hialeah
- Motel, Hillsboro Beach
- Days Inn, Hollywood
- Diplomat Hotel, Hollywood
- Holiday Inn, Hollywood
- Quality Suites - Oceanside, Indiatlantic
- Hilton Inn, Inverrary
- Best Inn, Jacksonville
- Bradbury Suites-Proposed, Jacksonville
- Compri Hotel-Proposed, Jacksonville
- Courtyard By Marriott, Jacksonville
- Days Inn, Jacksonville
- Doubletree Club Hotel, Jacksonville
- Hampton Inn, Jacksonville
- Hotel-Proposed, Jacksonville
- Jacksonville Hotel, Jacksonville
- Residence Inn, Jacksonville
- Sheraton Hotel, Jacksonville
- Wyndham Lakes Hotel, Jacksonville
- Sheraton Beach Hotel, Jensen Beach
- Howard Johnson, Juno Beach
- Hilton Hotel, Jupiter
- Key Biscayne, Key Biscayne
- Howard Johnson Lodge, Key Largo
- Casa Marina Marriott, Key West
- Fairfield Inn, Key West
- Hampton Inn-Roosevelt Rd., Key West
- Holiday Inn, Key West
- Hyatt Hotel, Key West
- La Concha Holiday Inn, Key West
- Pier House Inn and Beach Club, Key West
- Reach Hotel, Key West
- Santa Maria Hotel, Key West
- Timeshare Resort, Key West
- Best Western Vacation Lodge, Kissimmee
- Days Inn, Kissimmee
- Days Inn West, Kissimmee
- Days Lodge, Kissimmee
- Howard Johnson Plaza Hotel, Kissimmee
- Howard Johnson's, Kissimmee
- KOA Campground, Kissimmee
- Old Town Retail Complex, Kissimmee
- Quality Suites, Kissimmee
- Quality Suites-Maingate, Kissimmee
- Save Inn, Kissimmee
- Sheraton Lakeside, Kissimmee
- Suite Hotel-Proposed, Kissimmee
- Wynfield Inn, Kissimmee
- Days Inn, Lake Buena Vista
- Embassy Suites-Proposed, Lake Buena Vista
- Hilton Hotel-Disney World, Lake Buena Vista
- Marriott Orlando World Center, Lake Buena Vista
- Days Inn, Lake City
- Flagship Inn, Lake County
- Travelodge Motel, Lake County
- Lake Park Inn, Lake Park
- Holiday Inn, Lake Placid
- Hampton Inn-Proposed, Lakeland
- Hotel-Proposed, Lakeland
- Howard Johnson, Lakeland
- Resort Hotel-Proposed, Lakeland
- Resort-Imperial Lake-Prpsd., Lakeland
- Proposed Hotel, Lee County
- Sonesta Sanibel Harbour, Lee County
- Holiday Inn, Lido Beach
- Holiday Inn, Longboat Kay
- Holiday Inn - Madiera Beach, Madiera
- Howard Johnson, Marathon
- Radisson Suite Resort, Marco Island
- Holiday Inn, Marianna
- Oceanfront Hotel, Melbourne
- Quality Suites, Melbourne
- Bahia Mar Hotel & Yachting Club, Miami
- Biscayne Bay Marriott, Miami
- Courtyard by Marriott, Miami
- Crown Sterling Suites, Miami
- Doral Ocean Beach Resort, Miami
- Fairfield Inn, Miami
- Hilton Hotel-Proposed, Miami
- Holiday Inn Civic Center, Miami
- Holiday Inn-Airport (Le Juene Rd.), Miami
- Holiday Inn-Calder, Miami
- Howard Johnson Hotel-Broad Causeway, Miami
- Howard Johnson Hotel-Port of Miami, Miami
- Howard Johnson Lodge-Golden Glades, Miami
- Howard Johnson Lodge-Int'l Airport, Miami
- Hyatt Regency Hotel, Miami
- Inter-Continental Hotel, Miami
- Jockey Club, Miami
- Marriott Hotel-Downtown, Miami
- Miami Airport Ramada, Miami
- Proposed AmeriSuites, Miami
- Propsed Hampton Inn, Miami
- Residence Inn-Proposed, Miami
- Sheraton River House, Miami
- Sofitel Miami, Miami
- Alexander Hotel, Miami Beach
- Art Deco Hotel, Miami Beach
- Cresent Timeshare, Miami Beach
- Delano Hotel, Miami Beach
- Doral Beach Hotel, Miami Beach
- Eden Roc Hotel, Miami Beach
- Fontainebleu Hotel, Miami Beach
- Holiday Inn, Miami Beach
- Holiday Inn-Central, Miami Beach
- Holiday Inn-North, Miami Beach
- Holiday Inn-Oceanside, Miami Beach
- Holiday Inn-South, Miami Beach
- Hotel-Proposed, Miami Beach
- Nautilus Club Hotel, Miami Beach
- Palm Resort on the Ocean, Miami Beach
- Pan American Radisson, Miami Beach
- Proposed Hotel, Miami Beach
- Shelborne Beach Hotel, Miami Beach
- Sheraton Beach, Miami Beach
- Solymar Hotel-Proposed, Miami Beach
- Quality Inn, Naples
- Quality Inn-Gulfcoast, Naples
- Registry Hotel at Pelican Bay, Naples
- Registry Resort-Proposed, Naples
- Super 8 Motel-Proposed, Naples
- World Tennis Resort, Naples
- Hyatt Newporter Hotel, Newport Beach
- Hilton Hotel, North Redington Beach
- Masters Economy Inn, North Seffner
- Amfac Hotel, Orlando
- Army lodging-Proposed, Orlando
- Comfort Suites Hotel, Orlando
- Compri Hotel-Airport-Proposed, Orlando
- Compri Hotel-Proposed, Orlando
- Courtyard - Orlando Airport, Orlando
- Days Inn, Orlando
- Days Inn and Lodge-Florida Mall, Orlando
- Days Inn Civic Center, Orlando
- Days Inn East of Universal Studios, Orlando
- Days Inn-E/O Magic Kingdom, Orlando
- Days Inn-Proposed, Orlando
- Days Inn-Sandlake Road, Orlando
- Days Suites-E/O Magic Kingdom, Orlando
- Dolphin Hotel-Proposed, Orlando
- Dutch Inn, Orlando
- Embassy Suites, Orlando
- Fairfield Inn, Orlando
- Fairfield Inn-Airport, Orlando
- Grand Cypress Resort, Orlando
- Hampton Inn - Proposed, Orlando
- Heritage Inn, Orlando
- Holiday Inn Central Park, Orlando
- Holiday Inn Crowne Plaza, Orlando
- Holiday Inn-Airport, Orlando
- Holiday Inn-International Drive, Orlando
- Holiday Inn-Lee Road, Orlando
- Holiday Inn-Maingate West, Orlando
- Holiday Inn-Orange Blossom Trail, Orlando
- Howard Johnson - Walt Disney World, Orlando
- Howard Johnson-Kirkman, Orlando
- Howard Johnson-Lake Holden, Orlando
- Howard Johnson-Maingate, Orlando
- Hyatt Grand Cypress, Orlando
- Hyatt Regency Grand Cypress, Orlando
- Hyatt-W. Irlo Bronson Mem. Hwy., Orlando
- International Inn, Orlando
- Kon Tiki Village, Orlando
- La Quinta Hotel-Airport, Orlando
- La Quinta Inn, Orlando
- Omni Orlando, Orlando
- Orlando Airport Hotel-Proposed, Orlando
- Orlando Hamiton, Orlando
- Orlando Plaza Hotel, Orlando
- Orlando Twin Towers Hotel, Orlando
- Park Suite Hotel-Proposed, Orlando
- Peabody Hotel, Orlando
- Princess Hotel and Spa, Orlando
- Proposed Wellesley Inn, Orlando
- Quality Inn, Orlando
- Radisson Hotel-Aquatic Center, Orlando
- Regency Inn, Orlando
- Residence Inn By Marriott, Orlando
- Rodeway Inn, Orlando
- Save Inn, Orlando
- Sheraton Jetport Inn, Orlando
- Sheraton Lakeside, Orlando
- Sheraton Twin Towers, Orlando
- Sonesta Village Resort, Orlando
- Stouffer Orlando Resort, Orlando
- Swan Hotel-Proposed, Orlando
- Thriftway Motel, Orlando
- Wynfield Inn, Orlando
- American Way, Osceola
- Sheraton Gateway Motel, Osceola
- Brazilian Court Hotel, Palm Beach
- Heart of Palm Beach Hotel, Palm Beach
- Hilton Inn, Palm Beach
- Palm Court, Palm Beach
- Holiday Inn, Palm Beach Garden
- Days Inn, Panama City
- Marriott's Bay Point, Panama City
- Super 8, Panama City
- Days Inn, Pensacola
- Hilton Hotel, Pensacola
- La Quinta Hotel, Pensacola
- Residence Inn, Pensacola
- Super 8, Pensacola
- Proposed Hampton Inn, Pensacola Beach
- Comfort Inn, Perdido Key
- La Quinta, Pinellas County
- Courtyard by Marriott, Plantation
- Holiday Inn Plantation, Plantation
- Sheraton Suites, Plantation
- Days Inn, Pompano Beach
- Palm-Aire Spa Resort, Pompano Beach
- Lodge & Bath Club, Ponte Verde
- Howard Johnson, Punta Gorda
- Days Inn, Riviera Beach
- Safety Harbor Spa, Safety Harbor
- Holiday Inn, Saint Augustine
- Howard Johnson, Saint Augustine
- Courtyard by Marriott, Saint Petersburg
- Don Ceahsar Beach Resort, Saint Petersburg
- Hilton Hotel, Saint Petersburg
- Howard Johnson, Saint Petersburg
- Ramada Inn, Saint Petersburg
- Residence Inn, Saint Petersburg
- Saint Petersburg Motel, Saint Petersburg
- Sheraton Hotel and Marina, Saint Petersburg
- Vinoy Park Hotel, Saint Petersburg
- Countryside Inn, Sanford
- Days Inn, Sanford
- Holiday Inn, Sanford
- Azure Tides Resort-Proposed, Sarasota
- Days Inn, Sarasota
- Holiday Inn-Lido Beach, Sarasota
- Proposed Hotel, Sarasota
- Holiday Inn, Sebring
- Embassy Suites, Singer Island
- Hilton, Singer Island
- Econo Lodge, Starke
- Radisson Pan American Hotel, Sunny Isles
- Best Inn, Tallahassee
- Courtyard by Marriott, Tallahassee
- Days Inn-Tallahassee, Tallahassee
- American Way, Tampa
- Courtyard by Marriott, Tampa
- Days Inn, Tampa
- Embassy Suites-Airport, Tampa
- Hampton Inn-Airport, Tampa
- Hilton-Airport, Tampa
- Holiday Inn, Tampa
- Holiday Inn Sahal Park, Tampa
- Holiday Inn-Airport, Tampa
- Manger Motor Inn, Tampa
- Marriott Hotel, Tampa
- Omni Tampa Hotel at Westshore, Tampa
- Ramada Inn, Tampa
- Rodeway Inn, Tampa
- Saddlebrook Resort, Tampa
- Sheraton Grand West, Tampa
- Master Economy Inn, Tampa-East(Selfner)
- Master Economy Inn, Tampa-North(Zephyrhills)
- Days Inn, Vero Beach
- Holiday Inn-Countryside, Vero Beach
- Holiday Inn-Oceanside, Vero Beach
- Saddlebrook Resort, Wesley Chapel
- Courtyard by Marriott, West Melbourne
- Airport Centre, West Palm Beach
- Courtyard by Marriott, West Palm Beach
- Days Inn, West Palm Beach
- Field Palm Hotel, West Palm Beach
- Hilton-Airport, West Palm Beach
- Howard Johnson Lodge, West Palm Beach
- Hyatt Hotel of the Palm Beaches, West Palm Beach
- Royce Hotel, West Palm Beach
- Masters Economy Inn, Zephyrhills
Georgia
- Atlanta Radisson Hotel, Atlanta
- Atlanta Terrace Motel, Atlanta
- Comfort Inn, Atlanta
- Compri Hotel, Atlanta
- Courtyard By Marriott-Airport North, Atlanta
- Courtyard by Marriott-Airport South, Atlanta
- Courtyard by Marriott-Cumberland, Atlanta
- Courtyard by Marriott-Executive Pk., Atlanta
- Courtyard by Marriott-Gwinnett, Atlanta
- Courtyard by Marriott-Jimmy Carter, Atlanta
- Courtyard by Marriott-PeachtrDunwdy, Atlanta
- Courtyard by Marriott-Perimeter, Atlanta
- Courtyard by Marriott-Rosewell, Atlanta
- Courtyard by Marriott-Windy Hill, Atlanta
- Cresthil Inn-Proposed, Atlanta
- Days Inn, Atlanta
- Days Inn - Northlake, Atlanta
- Doubletree Hotel, Atlanta
- Embassy Suites-Atlanta Perimeter, Atlanta
- Embassy Suites-Buckhead, Atlanta
- Embassy Suites-Galleria, Atlanta
- F.W.W. Hotel, Atlanta
- Fairfield Inn-Airport, Atlanta
- Fairfield Inn-Gwinnett, Atlanta
- Fairfield Inn-North Lake, Atlanta
- Fairfield Inn-Northwest, Atlanta
- Fairfield Inn-Peachtree, Atlanta
- Fairfield Inn-South Lake, Atlanta
- Hampton Inn-Airport, Atlanta
- Hilton Inn, Atlanta
- Holiday Inn Crowne Plaza, Atlanta
- Holiday Inn-I-20 East, Atlanta
- Holiday Inn-I-85 Monroe Drive, Atlanta
- Holiday Inn-Perimeter Dunwooody, Atlanta
- Hotel-Downtown-Proposed, Atlanta
- Hotel-Proposed, Atlanta
- Howard Johnson Hotel-Hartsfield, Atlanta
- Howard Johnson-Airport, Atlanta
- Howard Johnson-Northeast, Atlanta
- Howard Johnson-Northwest, Atlanta
- Howard Johnson-South, Atlanta
- Hyatt Atlanta-Airport, Atlanta
- La Quinta - Stone Mountain, Atlanta
- La Quinta Hotel, Atlanta
- La Quinta Hotel-West, Atlanta
- Marriott Atlanta Airport, Atlanta
- Marriott Hotel, Atlanta
- Marriott Hotel-Downtown, Atlanta
- Marriott Marquis, Atlanta
- Marriott Suites Hotel-Proposed, Atlanta
- Marriott-Perimeter, Atlanta
- Master Economy Inn, Atlanta
- Motel 6, Atlanta
- Neighborhood Inn, Atlanta
- Omni International Hotel, Atlanta
- Perimeter North Inn, Atlanta
- Proposed AmeriSuites, Atlanta
- Quality Inn-Central, Atlanta
- Radisson Inn, Atlanta
- Ramada Inn-Perimeter, Atlanta
- Residence Inn by Marriott-Dunwoody, Atlanta
- Residence Inn-Airport, Atlanta
- Residence Inn-Buckhead, Atlanta
- Residence Inn-Northwest, Atlanta
- Sheraton Century Center, Atlanta
- Sheraton-Airport, Atlanta
- Sporting Club at the Concourse, Atlanta
- Stouffer Hotel-Proposed, Atlanta
- Swissotel, Atlanta
- Terrace Motel, Atlanta
- Waverly Hotel, Atlanta
- Westin Lenox Hotel, Atlanta
- Westin Peachtree Plaza, Atlanta
- Wyndham Garden Hotel, Atlanta
- Hyatt Hotel, Atlanta Airport
- Hampton Inn, Atlanta-Buckhead
- Courtyard by Marriott, Augusta
- Landmark Hotel, Augusta
- Masters Economy Inn - Gordon Hwy., Augusta
- Masters Economy Inn - Warner Robins, Augusta
- Masters Economy Inn - Washington Rd, Augusta
- Holiday Inn, Brunswick
- Super 8, Brunswick
- Days Inn, Calhoun
- Super 8, Cartersville
- Days Inn, Chamblee
- Comfort Inn-Proposed, College Park
- Holiday Inn Crowne Plaza, College Park
- Courtyard by Marriott, Columbus
- La Quinta Inn, Columbus
- Super 8, Columbus
- Best Inn, Dalton
- Days Inn, Dalton
- Holiday Inn-Proposed, Decatur
- Sheraton Hotel, Decatur
- Best Western-Perimeter-North, Doraville
- Days Inn - Gwinnett, Duluth
- Howard Johnson, Forsyth
- Holiday Inn-Proposed, Gwinnett County
- Holiday Inn, Jekyll Island
- Jekyll Island Inn-Proposed, Jekyll Island
- Hilton Hotel, Macon
- Master Economy Inn, Macon
- Best Inn, Marietta
- Courtyard by Marriott-Delk Road, Marietta
- Lafayette Hotel, Marietta
- Hampton Inn, Marrietta (Atlanta)
- Master Economy Inn, McDonough
- Courtyard by Marriott-Perimeter, Norcross
- Motel 6, Norcross
- Hilton Hotel, Peachtree Corners
- Super 8, Rome
- Best Western, Savannah
- Courtyard by Marriott, Savannah
- Days Inn, Savannah
- Days Inn-Bay Street, Savannah
- Days Inn-Mall Blvd., Savannah
- Fairfield Inn, Savannah
- Hotel-Proposed, Savannah
- Mulberry Inn, Savannah
- Radisson Hotel-Proposed, Savannah
- Royal Savannah, Savannah
- Sheraton Savannah Resort & C.C., Savannah
- Town and Country Motel, Savannah
- Days Inn, Savannah Beach
- Howard Johnson, Smyrna
- Master Economy Inn, Tilton
- Courtyard by Marriott-Northlake, Tucker
- Master Economy Inn, Warner Robins
- Super 8, Warner Robins
Hawaii
- Hyatt Regency Waikoloa, Hawaii
- Mauna Kea Hotel, Hawaii
- Kahala Hilton, Honolulu
- Plaza Hotel, Honolulu
- Waikiki Beachcomber, Honolulu
- Waikiki Hobron, Honolulu
- Coco Palms Resort, Kauai
- Kauai Surf Hotel, Kauai
- Westin Kauai-Kauai Lagoons Resort, Kauai
- Westin Kauai-Proposed, Kauai
- Kona Village, Kona
- Royal Sea Cliff Resort, Kona
- Westin Kauai at Kauai Lagoon, Lihue
- Hyatt Regency, Maui
- Marriott Resort, Maui
- Maui Lu Hotel, Maui
- Maui Surf Hotel, Maui
- Westin Maui, Maui
- Hawaiian Regent Hotel-Waikiki Beach, Oahu
- Hotel-Proposed-Schofield Barracks, Oahu
- Hyatt Regency Waikiki, Oahu
- Kiahuna Plantation, Poipu Beach, Kauai
- Transient Lodging Facilities, Schofield Barracks
- Hilton Hawaiian Village, Waikiki
- Grand Hyatt Wailea, Wailea
Idaho
- Compri Hotel, Boise
- Holiday Inn, Boise
- Holiday Inn-Airport, Boise
- Red Lion Inn, Boise
- Super 8, Boise
- Motel 6, Coeur d'Alene
- Super 8, Coeur d'Alene
- Proposed Motel, Coure d'Alene
- Super 8, Lewiston
- Cotton Tree Inn, Pocatello
- Super 8, Sand Point
- Busterback Ranch, Sawtooth Valley
Illinois
- Arlington Park Hilton, Arlington Heights
- Church Creek, Arlington Heights
- Courtyard by Marriott, Arlington Heights
- La Quinta Hotel, Arlington Heights
- Hampton Inn-Proposed, Bedford Park
- Best Inn, Bloomington
- Fairfield Inn-Normal, Bloomington
- Holiday Inn, Bloomington
- Indian Lakes Resort, Bloomington
- Ramada Inn, Bloomington
- Super 8, Bloomington
- Cresthil-Proposed, Buffalo Grove
- Holiday Inn, Champaign
- La Quinta Inn, Champaign
- Radisson Suites - Champaign, Champaign
- Suite Hotel-Proposed, Champaign
- Super 8, Champaign
- Ambassador West Hotel, Chicago
- Americana Congress, Chicago
- Conrad Hilton Hotel, Chicago
- Courtyard by Marriott-Glenview, Chicago
- Courtyard by Marriott-Highland, Chicago
- Courtyard by Marriott-Lincoln, Chicago
- Courtyard by Marriott-O'Hare, Chicago
- Courtyard by Marriott-Waukegan, Chicago
- Courtyard by Marriott-Woodale, Chicago
- Days Inn, Chicago
- Executive House, Chicago
- Fairfield Inn-Lansing, Chicago
- Fairfield Inn-Willowbrook, Chicago
- Fairmont Hotel, Chicago
- Guest Quarters Hotel, Chicago
- Hilton and Towers, Chicago
- Hilton-O'Hare, Chicago
- Holiday Inn-Merchandise Mart, Chicago
- Howard Johnson-O'Hare Int'l Airport, Chicago
- Hyatt Regency, Chicago
- Hyatt Suites Hotel, Chicago
- Inter-Continental Hotel-Proposed, Chicago
- La Quinta Inn - Hoffman Est., Chicago
- Le Meridien, Chicago
- Lenox House, Chicago
- Lincoln Hotel, Chicago
- Mark Twain Hotel, Chicago
- Marriott-O'Hare, Chicago
- Mayfair Regent, Chicago
- McClurg Holiday Inn, Chicago
- McCormick Inn Hotel, Chicago
- Morton Hotel, Chicago
- Omni Ambassador East, Chicago
- Omni Morton Hotel, Chicago
- Palmer House Hotel, Chicago
- Ramada Inn - Lakeshore, Chicago
- Ramada O'Hare, Chicago
- Residence Inn-Deerfield, Chicago
- Residence Inn-Lombard, Chicago
- Sheraton Hotel-Downtown, Chicago
- Sheraton Hotel-Proposed, Chicago
- Sheraton O'Hare, Chicago
- Sheraton Plaza Hotel, Chicago
- Summerfield Suites Hotel, Chicago
- Swissotel, Chicago
- Tremont Hotel, Chicago
- Westin Hotel, Chicago
- Whitehall Hotel, Chicago
- Hilton Hotel, Collinsville
- Holiday Inn, Collinsville
- Super 8, Columbus
- Super 8, Crystal Lake
- Super 8, Decatur
- Courtyard by Marriott, Deerfield
- Embassy Suites, Deerfield
- Marriott Suites Hotel, Deerfield
- Holiday Inn-Chicago, Des Plaines
- Hotel-Proposed, Des Plaines
- Compri Hotel-Proposed, Downers Grove
- Radisson Suite Hotel, Downers Grove
- Best Inn, Effingham
- Ramada Inn, Elgin
- Hampton Inn, Elk Grove Village
- Marriott Suites, Elk Grove Village
- Holiday Inn, Elmhurst
- Orrington Hotel, Evanston
- Drury Inn, Fairview Heights
- Conference Center & Resort-Proposed, Fox Lake
- Holiday Inn, Freeport
- Hotel-Proposed, Gurnee
- La Quinta Hotel, Hoffman Estates
- Carson Inn, Itasca
- Hamilton Wyndham, Itasca
- Nordic Hills, Itasca
- Holiday Inn, Joliet
- Proposed Harrah's Riverboat, Joliet
- Days Inn, Kankakee
- Holiday Inn, LaSalle
- Marriott Hotel, Lincolnshire
- Hilton Inn, Lisle
- Holiday Inn Crowne Plaza, Lisle
- Embassy Suites, Lombard
- Holiday Inn, Macomb
- Best Inn, Marion
- Best Inn, Mount Vernon
- Holiday Inn, Mount Vernon
- Ramada Inn, Mount Vernon
- Courtyard by Marriott, Naperville
- Ramada Inn, Naperville
- Sheraton Naperville, Naperville
- O'Hareport Hotel, Northlake
- Courtyard by Marriott, Oakbrook Terrace
- Super 8, Okawville
- Fairfield Inn, Peoria
- Days Inn, Peru
- Super 8, Peru
- Courtyard by Marriott, Rockford
- Fairfield Inn, Rockford
- Hampton Inn, Rockford
- Embassy Suites, Rosemont
- Quality Inn/Clarion, Rosemont
- Sheraton Int'l At O'Hare, Rosemont
- Holiday Inn, Salem
- Compri Hotel, Schaumburg
- Embassy Suites, Schaumburg
- Marriott Schaumburg, Schaumburg
- Holiday Inn, South Beloit
- Ramada Renaissance Hotel, Springfield
- Sheraton Inn, Springfield
- Super 8-East, Springfield
- Super 8-South, Springfield
- Jumer's Castle, Urbana
- Best Inn, Waukegan
- Super 8, Waukegan
Indiana
- Clarion Fourwinds Inn, Bloomington
- Holiday Inn, Bloomington
- Inn at the Four Winds, Bloomington
- Ramada Inn, Bloomington
- Harbor Point Resort, Brookville Lake
- Super 8, Columbus
- Best Inn, Fort Wayne
- Hilton, Fort Wayne
- Downtown Hotel, Gary
- Sheraton, Gary
- Holiday Inn, Goshen
- Howard Johnson, Hammond
- Quality Inn, Hammond
- Courtyard by Marriott-Airport, Indianapolis
- Courtyard by Marriott-Carmel, Indianapolis
- Courtyard by Marriott-Castleton, Indianapolis
- Embassy Suites-Claypool Center, Indianapolis
- Fairfield Inn-Castleton, Indianapolis
- Fairfield Inn-College Park, Indianapolis
- Hampton Inn-Proposed, Indianapolis
- Hilton Hotel-Airport, Indianapolis
- Hilton Inn-Downtown, Indianapolis
- Holiday Inn-South, Indianapolis
- Holiday Inn-Southeast, Indianapolis
- Knights Inn, Indianapolis
- Midway Motor Lodge, Indianapolis
- Mohawk Inn, Indianapolis
- Motel 6, Indianapolis
- Proposed Fairfield Inn, Indianapolis
- Proposed Residence Inn, Indianapolis
- Radisson, Indianapolis
- Ramada-Airport, Indianapolis
- Wyndham Garden Hotel, Indianapolis
- La Quinta Inn, Indianapolis Airport
- Hilton Inn, Jeffersonville
- Holiday Inn, La Porte
- Days Inn, Lafayette
- Holiday Inn, Lafayette
- Cotton Mill Inn-Proposed, Madison
- Hampton Inn, Merrillville
- Holiday Inn Express, Merrillville
- La Quinta Inn, Merrillville
- Hotel Roberts, Muncie
- Radisson Hotel, Muncie
- Brown County Inn, Nashville
- Holiday Inn, Portage
- Knights Inn, Richmond
- Holiday Inn, South Bend
- Howard Johnson, South Bend
- Signature Inn, Terre Haute
- Super 8, Terre Haute
- Courtyard Conversion, Valparaiso
- Holiday Inn, Vincennes
Iowa
- Holiday Inn-Gateway Center, Ames
- Holiday Inn, Cedar Falls
- Collins Plaza, Cedar Rapids
- Holiday Inn, Cedar Rapids
- Roosevelt Hotel, Cedar Rapids
- Super 8, Davenport
- Courtyard by Marriott, Des Moines
- Fairfield Inn, Des Moines
- Holiday Inn, Des Moines
- Holiday Inn - West, Des Moines
- Holiday Inn-Downtown, Des Moines
- Holiday Inn-North, Des Moines
- Ramada Inn, Des Moines
- Super 8-North, Des Moines
- Super 8-West, Des Moines
- Holiday Inn, Iowa City
Kansas
- Embassy Suites, Kansas City
- Fairfield Inn-Overland Park, Kansas City
- Holiday Inn-Mission Overland Park, Kansas City
- Fairfield Inn, Kansas City West
- Holiday Inn, Lawrence
- University Inn, Lawrence
- Holiday Inn, Manhattan
- Courtyard by Marriott, Overland Park
- Hampton Inn-Proposed, Overland Park
- Marriott Hotel, Overland Park
- Park Inn International, Topeka
- Super 8, Topeka
- Canterbury Inn, Wichita
- Former Sheraton Hotel, Wichita
- Hilton-East, Wichita
- Marriott Hotel, Wichita
- Comfort Inn, Winfield
Kentucky
- Conference Center-Proposed, Boone County
- Howard Johnson, Bowling Green
- Brown County Inn, Brown County
- Holiday Inn, Corbin
- Hotel-Proposed, Covington
- Thomas More Centre, Crestville Hill
- Comfort Inn, Elizabethtown
- Signature Inn, Elkhart
- Holiday Inn, Florence
- Signature Inn, Florence
- Drawbridge Inn, Fort Mitchell
- Days Inn, Georgetown
- Days Inn, Henderson
- Holiday Inn, Henderson
- Bluegrass Motor Inn, Lexington
- Courtyard by Marriott, Lexington
- Holiday Inn, Lexington
- Holiday Inn-East, Lexington
- Holiday Inn-North, Lexington
- Hyatt Hotel, Lexington
- Knights Inn, Lexington
- Super 8-Proposed, London
- Brown Hotel, Louisville
- Courtyard by Marriott-East, Louisville
- Holiday Inn, Louisville
- Holiday Inn South, Louisville
- Holiday Inn-Central, Louisville
- Holiday Inn-Northeast, Louisville
- Ramada Inn, Louisville
- Ramada Inn-East, Louisville
- Signature Inn, Louisville
- Days Inn, Madisonville
- Executive Inn, Owensboro
- Super 8-Proposed, Radcliff
- Holiday Inn, Richmond
Louisiana
- Howard Johnson, Alexandria
- Capital House, Baton Rouge
- Convention Center Hotel-Proposed, Baton Rouge
- Courtyard by Marriott, Baton Rouge
- Crown Sterling Suites, Baton Rouge
- Embassy Suites, Baton Rouge
- Hilton Hotel, Baton Rouge
- Holiday Inn-East, Baton Rouge
- Holiday Inn-South, Baton Rouge
- Holiday Inn-West, Baton Rouge
- La Quinta Inn, Baton Rouge
- Prince Murat Hotel, Baton Rouge
- Proposed Homewood Suites, Baton Rouge
- Quality Inn, Bossier City
- Ramada Inn, Hammond
- Ramada Inn, Houma
- Holiday Inn - New Orleans, Kenner
- Sheraton, Kenner
- Hilton Hotel, Lafayette
- La Quinta Hotel, Lafayette
- Gateway Hotel, Metairie
- Howard Johnson-Airport, Metairie
- Canal Street Hotels L.P., New Orleans
- Clarion Hotel, New Orleans
- Days Inn, New Orleans
- Fairmont Roosevelt Hotel, New Orleans
- Hampton Inn-Proposed, New Orleans
- Holiday Inn Crowne Plaza, New Orleans
- Hostellerie de la Poste, New Orleans
- Hotel Meridien, New Orleans
- Hyatt Regency, New Orleans
- Iberville Hotel, New Orleans
- Inter-Continental Hotel, New Orleans
- La Quinta Inn, New Orleans
- Landmark Bourbon, New Orleans
- Le Meridien New Orleans, New Orleans
- Maison Dupuy, New Orleans
- Marriott Hotel, New Orleans
- Omni Royal Orleans, New Orleans
- Ramada Inn, New Orleans
- Saint Louis Hotel, New Orleans
- St. Ann/Marie Antoinette, New Orleans
- Warwick, New Orleans
- Westin Hotel, New Orleans
- Residence Inn, Shreveport
- Super 8, Shreveport
Maine
- Hilton Inn, Bangor
- Ramada Inn, Bangor
- Residence Inn by Marriott-Proposed, Bangor
- Inn By The Sea, Cape Elizabeth
- Hotel-Proposed, Orchard Beach
- Hotel-Proposed, Portland
- Portland Regency, Portland
- Ramada Inn, Portland
- Sheraton Tara Portland, Portland
- Susse Chalet, Portland
- Susse Chalet, Portland (In-town)
- Keddy's Motor Inn of Maine, Presque Isle
- Hampton Inn, South Portland
- Sheraton Inn, South Portland
Maryland
- Budget Hotel-Proposed, Aberdeen
- Chesapeake House, Aberdeen
- Holiday Inn, Aberdeen
- Motel-Proposed, Aberdeen
- Annapolis Hotel, Annapolis
- Courtyard by Marriott-Riva Road, Annapolis
- Governor Calvert House, Annapolis
- Historic Inns of Annapolis, Annapolis
- Hotel-Proposed, Annapolis
- Howard Johnson, Annapolis
- Marriott Hotel, Annapolis
- Maryland Inn, Annapolis
- Quality Royale Hotel, Annapolis
- Ramada Hotel, Annapolis
- Robert Johnson House, Annapolis
- Brookshire Hotel, Baltimore
- Courtyard by Marriott-BWI Airport, Baltimore
- Days Inn, Baltimore
- Harbor Court Hotel, Baltimore
- Harrison's at Pier 5, Baltimore
- Hilton Hotel, Baltimore
- Holiday Inn-Belmont Blvd., Baltimore
- Holiday Inn-Cromwell Bridge, Baltimore
- Holiday Inn-Glen Burnie, Baltimore
- Holiday Inn-Inner Harbor, Baltimore
- Holiday Inn-Int'l Airport, Baltimore
- Holiday Inn-Moravia Road, Baltimore
- Holiday Inn-Pikesville, Baltimore
- Holiday Inn-South Glen Burnie, Baltimore
- Hotel-Proposed, Baltimore
- Howard Johnson-Proposed, Baltimore
- Johns Hopkins Hotel-Proposed, Baltimore
- Lord Baltimore Hotel, Baltimore
- Omni International Hotel, Baltimore
- Ramada Inn-I-695 West, Baltimore
- Susse Chalet, Baltimore
- Susse Chalet Inn-BWI Airport, Baltimore
- Susse Chalet Inn-Golden Ring, Baltimore
- Bethesda Metro Center, Bethesda
- Guest Quarters, Bethesda
- Hyatt Regency Hotel, Bethesda
- Linden Hill Hotel, Bethesda
- Omni Linden Hotel, Bethesda
- Residence Inn, Bethesda
- Bethseda Metro Center, Bethseda
- Guest Quarters, Bethseda
- Residence Inn - Proposed, Bethseda
- Comfort Suites-Proposed, Bowie
- Days Inn, Capital Heights
- Residence Inn, Cockneysville
- Abbey, College Park
- Best Western Maryland, College Park
- Holiday Inn, College Park
- Sheraton Inn, Dorsey
- Days Inn, Easton
- Mariner Inn, Easton
- Holiday Inn, Frederick
- Compri Hotel, Gaithersburg
- Marriott Hotel, Gaithersburg
- Century XXI Resort, Germantown
- Comfort Inn, Germantown
- Hampton Inn, Glen Burnie
- Residence Inn-Proposed, Greenbelt
- Courtyard by Marriott, Hunt Valley
- Hunt Valley Embassy Suites, Hunt Valley
- Hunt Valley Marriott, Hunt Valley
- Susse Chalet Inn, Jessup
- Courtyard by Marriott, Landover
- Quality Inn-Proposed, Landover
- Days Inn, Lanham
- Best Western Maryland, Laurel
- Days Inn, Laurel
- Holiday Inn, Laurel
- Susse Chalet, Linthicum
- Howard Johnson Plaza Hotel, New Carrollton
- Carousel Hotel, Ocean City
- Days Inn, Ocean City
- Susse Chalet, Oxon Hill
- Hotel-Proposed, Prince Georges County
- Budget Hotel-Proposed, Rockville
- Comfort Inn, Rockville
- Courtyard by Marriott, Rockville
- Days Inn-Congressional Park, Rockville
- Holiday Inn Crowne Plaza, Rockville
- Quality Inn-Proposed, Rockville
- Ramada Inn, Rockville
- Salisbury Hotel, Salisbury
- Sheraton Hotel, Salisbury
- Courtyard by Marriott, Silver Spring
- Quality Inn-Proposed, Silver Spring
- Comfort Inn-Proposed, Solomons Island
- Holiday Inn, Towson
- Quality Inn-Proposed, Westminster
Massachusetts
- Susse Chalet, Amsbury
- Courtyard by Marriott, Andover
- Marriott Hotel, Andover
- Stouffer Bedford Glen Hotel, Bedford
- Anthony's Pier Four, Boston
- Battery Wharf Hotel-Proposed, Boston
- Boston Harbor Hotel, Boston
- Boston World Trade Center, Boston
- Bostonian Hotel, Boston
- Colonnade Hotel, Boston
- Commonwealth Center Hotel, Boston
- Compri Hotel-Proposed, Boston
- Copley Plaza Hotel, Boston
- Courtyard by Marriott-Foxborough, Boston
- Econo Lodge-Proposed, Boston
- Harborside Conf. Center-Proposed, Boston
- Hilton-Back Bay, Boston
- Hilton-Logan, Boston
- Holiday Inn-Government Center, Boston
- Hotel - Proposed, Boston
- Hyatt Fan Pier-Proposed, Boston
- Hyatt Harborside-Proposed, Boston
- Lafayette Hotel, Boston
- Lenox Hotel, Boston
- Marriott Copley Place, Boston
- Meridien Hotel, Boston
- Omni Parker House, Boston
- Residence Inn, Boston
- Ritz-Carlton, Boston
- Statler Hilton Hotel, Boston
- Tremont House Hotel, Boston
- World Trade Center Hotel - Proposed, Boston
- Marriott Hotel, Boston/Newton
- Sheraton Tara Hotel, Braintree
- Ocean Edge Inn & Conference Center, Brewster
- Holiday Inn, Brookline
- Days Inn, Burlington
- Charles Hotel, Cambridge
- Hyatt Hotel, Cambridge
- Royal Sonesta Hotel, Cambridge
- The Charles Hotel, Cambridge
- Chatham Bars Inn, Chatham
- Chelmsford Radisson Hotel, Chelmsford
- Best Western Motor Lodge, Chicopee
- Cummington Farm Resort-Proposed, Cummington
- Appleton Inn, Danvers
- Howard Johnson Hotel, Danvers
- Radisson Ferncroft Hotel, Danvers
- Residence Inn - Proposed, Danvers
- Dedham Comfort Inn, Dedham
- Holiday Inn, Dedham
- Wequassett Inn, East Harwich
- Harbor View Hotel, Edgartown
- Kelley House, Edgartown
- Airport Inn, Fall River
- Sea Crest Hotel, Falmouth
- Sheraton Inn, Falmouth
- Radisson Hotel, Ferncroft
- Sheraton Tara Hotel, Framingham
- Hotel-Proposed, Franklin
- Hotel-Proposed, Haverhill
- Susse Chalet, Holyoke
- Dunfey Hyannis Hotel, Hyannis
- Heritage House Hotel, Hyannis
- Holiday Inn, Hyannis
- Sheraton Regal Inn, Hyannis
- Tara Hyannis, Hyannis
- Canyon Ranch-Berkshires, Lenox
- Cranwell Hotel and Conference Ctr., Lenox
- Spa/Resort-Proposed, Lenox
- Holiday Inn, Leominster
- Lexington Sheraton, Lexington
- Residence Inn-Proposed, Littleton
- Appleton Inn, Lowell
- Hilton Hotel, Lowell
- Town House Motor Inn, Lowell
- Holiday Inn, Marlboro
- Susse Chalet, Middleboro
- Sheraton Milford Hotel, Milford
- Holiday Inn, Natick
- Skipper's Inn, New Bedford
- Days Inn, Newton
- Howard Johnson, Newton
- Marriott Hotel, Newton
- Sheraton - Wayfarer, Newton
- Sheraton Tara, Newton
- Susse Chalet, Newton
- North Adams Inn, North Adams
- Hilton Inn, Northampton
- Hotel Northampton, Northampton
- Factory Mutual Hotel, Norwood
- University Inn, Oxford
- Holiday Inn, Peabody
- Berkshire Commons Hotel, Pittsfield
- Hotel-Proposed, Plymouth
- Hawthorne Hotel, Salem
- Days Inn, Saugus
- Susse Chalet, Seekonk
- Howard Johnson, Somerset
- Somerset Omni, Somerset
- Federal House Inn, South Lee
- Holiday Inn, Springfield
- Howard Johnson, Springfield
- Monarch Place, Springfield
- Treadway Inn, Springfield
- Publick House, Sturbridge
- Sheraton, Sturbridge
- Regency Inn of Taunton, Taunton
- Holiday Inn, Tewksbury
- Susse Chalet, Tewksbury
- Susse Chalet, Waltham
- Vista Waltham House, Waltham
- Hampton Inn, West Springfield
- Westford Regency Hotel, Westford
- The Westminster Village Inn, Westminster
- The Orchards, Williamstown
- Treadway Inn, Williamstown
- Days Inn, Woburn
- Howard Johnson, Woburn
- Radisson Hotel, Woburn
- Ramada Inn, Woburn
- Susse Chalet, Woburn
- Marriott Hotel, Worcester
- Alladin Motor Inn, Yarmouth
- Flagship Motor Inn, Yarmouth
- Gull Wing Suites Hotel, Yarmouth
Michigan
- Motel-Proposed, Adrian
- Ramada Inn, Allen Park
- Holiday Inn-Alpena, Alpena
- Compri Hotel-Proposed, Ann Arbor
- Hampton Inn-North, Ann Arbor
- Hampton Inn-South, Ann Arbor
- Hilton Hotel, Ann Arbor
- Holiday Inn-East, Ann Arbor
- Holiday Inn-West, Ann Arbor
- Residence Inn, Ann Arbor
- Sheraton Hotel, Ann Arbor
- AmeriSuites Hotel-Proposed, Auburn Hills
- Holiday Inn, Auburn Hills
- Knights Inn, Battle Creek
- Super 8, Battle Creek
- Bay Valley Inn, Bay City
- Howard Johnson, Belleville
- Fairfield Inn-Airport, Charlotte
- Courtyard by Marriott, Dearborn
- Courtyard by Marriott-Airport, Detroit
- Courtyard by Marriott-Auburn Hills, Detroit
- Courtyard by Marriott-Livonia, Detroit
- Days Inn, Detroit
- Downtown Hotel-Proposed, Detroit
- Fairfield Inn-Airport, Detroit
- Fairfield Inn-Auburn Hills, Detroit
- Fairfield Inn-Warren, Detroit
- Fairfield Inn-West, Detroit
- Golden Harp, Detroit
- Hampton Inn, Detroit
- Hilton-Airport, Detroit
- Hilton-North Field, Detroit
- Holiday Inn, Detroit
- Holiday Inn-Metro Airport, Detroit
- Hotel Pontchartrain, Detroit
- Omni Detroit, Detroit
- Westin Hotel Renaissance Center, Detroit
- Holiday Inn, East Lansing
- Holiday Inn-Proposed, East Lansing
- Knights Inn, Flint
- Amway Hotel, Grand Rapids
- Holiday Inn, Grand Rapids
- Grand Traverse Resort, Grand Traverse Village
- Holiday Inn, Howell
- Jackson Hotel, Jackson
- Fairfield Inn, Kalamazoo
- Hilton-Kalamazoo Center, Kalamazoo
- Holiday Inn, Kalamazoo
- Radison Plaza Hotel, Kalamazoo
- Residence Inn, Kalamazoo
- Super 8, Kalamazoo
- Embassy Suites-Proposed, Lansing
- Holiday Inn, Lansing
- Motel 6, Lansing
- Quality Suites Hotel, Lansing
- Compri Hotel-Proposed, Livonia
- Embassy Suites, Livonia
- Embassy Suites-Proposed, Livonia
- Holiday Inn, Livonia
- Marriott Hotel, Livonia
- Fairfield Inn, Madison Heights
- Residence Inn, Madison Heights
- Holiday Inn, Marquette
- Knights Inn, Monroe
- Comfort Inn-Proposed, Mount Clemens
- Holiday Inn, Muskegan
- Super 8, Muskegon
- Hilton Hotel, Novi
- Holiday Inn-Petoskey, Petoskey
- Mayflower Hotel, Plymouth
- Inn at the Bridge, Port Huron
- Radisson Hotel, Romulus
- Holiday Inn-East, Saginaw
- Super 8, Saginaw
- Courtyard by Marriott, Southfield
- Embassy Suites, Southfield
- Hilton Hotel, Southfield
- Marriott Hotel, Southfield
- Ramada Inn, Southfield
- Residence Inn, Southfield
- The Garden Inn, Southfield
- Comfort Suites-Proposed, Sterling Heights
- Holiday Inn, Sturgis
- Grand Traverse Resort, Traverse City
- Hampton Inn, Traverse City
- Park Place Hotel, Traverse City
- Courtyard by Marriott, Troy
- Holiday Inn, Troy
- Marriott, Troy
- Residence Inn, Troy
- Courtyard by Marriott, Warren
- Days Inn, Warren
- Holiday Inn, Warren
- Motel 6, Warren
- Residence Inn, Warren
- Van Dyke Hotel & Conference Center, Warren
- Bob Evans Restaurant, Wyoming
- Super 8, Wyoming
- Radisson Resort-Conference Center, Ypsilanti
Minnesota
- Embassy Suites, Bloomington
- Hilton Airport Hotel, Bloomington
- Hilton Hotel, Bloomington
- Howard Johnson Lodge, Bloomington
- Marriott Hotel, Bloomington
- Ramada Inn, Bloomington
- Days Inn - Minneapolis, Brooklyn Center
- Residence Inn, Eagan
- Compri Hotel-Proposed, Minneapolis
- Courtyard by Marriott-Eden Prairie, Minneapolis
- Courtyard by Marriott-Mendota, Minneapolis
- Days Inn, Minneapolis
- Dyckman Hotel, Minneapolis
- Hilton Inn, Minneapolis
- Holiday Inn-Downtown, Minneapolis
- Hotel-Proposed, Minneapolis
- Luxeford Hotel, Minneapolis
- Marquette, Minneapolis
- Marriott City Center Hotel, Minneapolis
- Marriott-Minnetonka, Minneapolis
- Motel 6, Minneapolis
- Omni-Northstar, Minneapolis
- Radisson Hotel, Minneapolis
- Ramada Inn, Minneapolis
- Sheraton Minneapolis, Minneapolis
- Sofitel, Minneapolis
- Motel-Proposed, Montevideo
- Days Inn, Plymouth
- Hotel-Proposed, Rochester
- Howard Johnson, Rochester
- Motel 6, Rochester
- Radisson Hotel, Rochester
- Days Inn, Roseville
- Holiday Inn, Saint Paul
- Holiday Inn-Town Square, Saint Paul
- Hotel-Proposed, Saint Paul
- Inn and Expo Center, Saint Paul
- World Trade Hotel, Saint Paul
- Wayzata Conference Center, Wayzata
Mississippi
- Howard Johnson, Biloxi
- Holiday Inn, Greenwood
- Motel 6, Hattlesburg
- Hampton Inn, Jackson
- Howard Johnson, Jackson
- Ramada Inn-Proposed, Jackson
- Residence Inn, Jackson
- Cabot Lodge, Ridgeland
- Holiday Inn, Vicksburg
Missouri
- Ramada Inn, Columbia
- Howard Johnson-North St. Louis, Hazelwood
- Super 8, Independence
- La Quinta Inn, Jackson - North
- Capital Plaza, Jefferson City
- Ramada Inn, Jefferson City
- Days Inn, Joplin
- Super 8, Joplin
- Allis Plaza, Kansas City
- Americana Hotel, Kansas City
- AmeriSuites Hotel-Proposed, Kansas City
- Doubletree Hotel, Kansas City
- Embassy Suites, Kansas City
- Fairfield Inn-West, Kansas City
- Hilton - Proposed, Kansas City
- Hilton Inn, Kansas City
- Historic Suites Hotel, Kansas City
- Holiday Inn, Kansas City
- Holiday Inn Crowne Plaza, Kansas City
- Holiday Inn-Proposed, Kansas City
- Proposed Sheraton Hotel, Kansas City
- Radisson Suite Hotel, Kansas City
- Resort Hotel - Proposed, Kansas City
- Marriott-Tan-Tar-A, Lake of the Ozarks
- Super 8, Liberty
- Super 8, North Kansas City
- Inn at Grand Glaize, Osage Beach
- Super 8, Saint Joseph
- Clarion, Saint Louis
- Courtyard by Marriott-Creve Coeur, Saint Louis
- Courtyard by Marriott-Downtown, Saint Louis
- Courtyard by Marriott-Westport, Saint Louis
- Days Inn, Saint Louis
- Doubletree Hotel, Saint Louis
- Drury Inn, Saint Louis
- Embassy Suites, Saint Louis
- Fairfield Inn-Hazel, Saint Louis
- Henry VIII Hotel, Saint Louis
- Hilton Hotel-Bel Air, Saint Louis
- Holiday Inn Sports Complex, Saint Louis
- Holiday Inn-Airport North, Saint Louis
- Holiday Inn-Downtown, Saint Louis
- Holiday Inn-Riverfont, Saint Louis
- Howard Johnson-South, Saint Louis
- Mayfair Hotel, Saint Louis
- Omni-St. Louis Station, Saint Louis
- Ramada Inn-Westport, Saint Louis
- Residence Inn-Chesterfield, Saint Louis
- Residence Inn-Richmond Heights, Saint Louis
- Ritz-Carlton Hotel, Saint Louis
- Sheraton-Airport, Saint Louis
- St. Louis Airport Hilton, Saint Louis
- St. Louis Airport Radisson Hotel, Saint Louis
- St. Louisian Hotel, Saint Louis
- Stouffer Concourse Hotel, Saint Louis
- Super 8, Saint Louis
- Marriott Hotel, Saint Louis County
- Holiday Inn, Springfield
- Sheraton Inn, Springfield
- Super 8, Springfield
- Executive Inn & Office Building, St. Louis
- Holiday Inn, St. Louis
- Howard Johnson Hotel, St. Louis
- Hotel-Proposed, Unity Village
- Holiday Inn, Wendtzville
Montana
- Sheraton Hotel, Billings
- Super 8, Billings
- Super 8, Great Falls
- Super 8, Helena
- Super 8, Kalispell
- Holiday Inn, Missoula
- Red Lion Inn, Missoula
Nebraska
- Holiday Inn, Kearney
- Best Western Airport Inn, Lincoln
- Holiday Inn-Airport, Lincoln
- Holiday Inn-Northeast, Lincoln
- Howard Johnson, North Platte
- Marriott Hotel, Omaha
- Ramada Inn, Omaha
- Red Lion Inn, Omaha
Nevada
- Lake Mead Resort, Boulder City
- Ormsby House Hotel and Casino, Carson City
- Super 8, Carson City
- Doubletree Hotel and Resort, Cathedral City
- Best Western Motel - Proposed, Jackpot
- Airport Inn, Las Vegas
- Aladdin Hotel and Casino, Las Vegas
- Alexis Park Resort Hotel, Las Vegas
- Casino Hotel-Proposed, Las Vegas
- Courtyard by Marriott, Las Vegas
- El Rancho Hotel and Casino, Las Vegas
- Hotel and Casino-Proposed, Las Vegas
- Jockey Club Hotel and Casino, Las Vegas
- La Quinta Hotel, Las Vegas
- Paradise Resort, Las Vegas
- Residence Inn, Las Vegas
- Silverbird Casino, Las Vegas
- Super 8-Proposed, Las Vegas
- The Mirage, Las Vegas
- Tropicana Travelodge, Las Vegas
- Westward Ho Casino, Las Vegas
- Echo Bay Resort, Overton
- Holiday Inn, Reno
- La Quinta Hotel, Reno
- Quality Inn and Casino, Reno
- Red Lion Hotel-Proposed, Reno
New Hampshire
- Sheraton Wayfarer, Bedford
- Hampton Inn, Bow
- Mount Washington Resort, Bretton Woods
- Balsams Hotel, Dixville Notch
- Sheraton Inn-Lamie's Tavern, Hampton
- Woodbound Inn, Jaffrey
- Brickyard Mountain Inn, Laconia
- Loon Mountain Hotel, Lincoln
- Appleton Inns, Manchester
- Holiday Inn Center, Manchester
- Sheraton Wayfarer, Manchester
- Susse Chalet, Manchester
- Clarion Somerset Hotel, Nashua
- Hotel-Proposed, Nashua
- Tara Sheraton Nashua, Nashua
- Wentworth by the Sea, Newcastle
- Susse Chalet, Portsmouth
- Wentworth-by-the-Sea, Portsmouth
- Salem Inn, Salem
- Susse Chalet, Salem
- Landmarc Lodge-East, Waterville Valley
- Landmarc Lodge-West, Waterville Valley
- Silver Squirrel Inn, Waterville Valley
- Snowy Owl Inn, Waterville Valley
- Chalet Susse International, Inc., Wilton
New Jersey
- Marriott Seaview Golf Resort, Abescon
- Howard Johnson Hotel, Absecon
- Seaview Country Club, Absecon
- Berkeley Carteret Hotel, Asbury Park
- Caesar's Hotel and Casino, Atlantic City
- Casino Hotel-Proposed, Atlantic City
- Deauville Hotel, Atlantic City
- Diplomat Hotel, Atlantic City
- Hampton Inn, Atlantic City
- Harrah's Marina Hotel Casino, Atlantic City
- Lafayette Hotel, Atlantic City
- Resorts Int'l Hotel and Casino, Atlantic City
- Royal Inn, Atlantic City
- Sands Hotel and Casino, Atlantic City
- Traymore Hotel Site, Atlantic City
- Tropicana Hotel and Casino, Atlantic City
- World International Hotel, Atlantic City
- Bernards Inn, Bernardsville
- Hotel-Proposed, Bridgewater
- Proposed Hotel, Camden
- Cherry Hill Hyatt, Cherry Hill
- Cherry Hill Inn, Cherry Hill
- Ramada Inn, Clifton
- Comfort Suites, E. Rutherford
- Ramada Renaissance, East Brunswick
- Sheraton Inn, East Brunswick
- Sheraton - Per Diem, East Rutherford
- Holiday Inn-Raritan Center, Edison
- Hotel-Proposed, Edison
- Ramada Inn, Edison
- Best Western Hotel, Egg Harbor Township
- Newark Airport Vista Hotel, Elizabeth
- Ramada Inn-Proposed, Elizabeth
- Sheraton Inn, Elizabeth
- Marriott Suite Hotel-Proposed, Elmwood Park
- Howard Johnson, Englewood
- Conference Center, Farleigh Dickinson
- Motel-Proposed, Flemington
- Hamilton Park Conference Center, Florham Park
- Courtesy Motel, Fort Lee
- Ramada Inn-Proposed, Franklin Township
- Playboy Resort, Great Gorge
- Marriott Hotel, Hanover
- Sheraton Hotel, Hasbrouck Heights
- Holiday Inn, Jamesburg
- Restaurant at Port Liberte, Jersey City
- Harrogate Senior Living Facility, Lakewood
- Courtyard by Marriott, Lincroft
- Hotel-Proposed, Long Branch
- Comfort Inn, Mahwah
- Courtyard by Marriott, Mahwah
- Residence Inn-Proposed, Mahwah
- Economy Lodge - Proposed, Meadowlands
- Holiday Inn, Meadowlands
- Hotel-Proposed, Meadowlands
- Meadowlands Hilton, Meadowlands
- Sheraton Hotel, Meadowlands
- Forsgate Conference Center, Monroe Township
- Conference Center, Morristown
- Governor Morris Inn, Morristown
- Headquarters Plaza Hotel, Morristown
- Pleasantville Farms Conference Cent, Morristown
- Howard Johnson Lodge, Mount Holly
- Courtyard by Marriott, Mount Laurel
- Hilton, Mount Laurel
- Days Hotel, New Brunswick
- Hyatt Hotel, New Brunswick
- Rennaisance Hotel, New Brunswick
- Residence Inn - Princeton, New Jersey
- Airport Hotel-Proposed, Newark
- Courtyard by Marriott-Airport, Newark
- Holiday Inn, Newark
- Holiday Inn-Airport North, Newark
- Hotel-Proposed, Newark
- Howard Johnson Hotel, Newark
- Days Inn, North Bergen
- Holiday Inn, North Brunswick
- Port-O-Call, Ocean City
- Sting Ray Motel, Ocean City
- Hotel-Proposed, Ocean Grove
- Spray View Hotel, Ocean Grove
- Macy Hotel-Proposed, Paramus
- Red Carpet Inn, Paramus
- Residence Inn-Proposed, Paramus
- Marriott Hotel-Proposed, Park Ridge
- Embassy Suites, Parsippany
- Hilton, Parsippany
- Residence Inn-Proposed, Parsippany
- Howard Johnson, Phillipsburg
- Hotel-Proposed, Piscataway
- Residence Inn-Proposed, Piscataway
- Compri Hotel-Proposed, Princeton
- Hyatt Regency, Princeton
- Marriott Hotel, Princeton
- Omni Nassau Inn, Princeton
- Treadway Inn, Princeton
- Howard Johnson, Ridgefield Park
- Hotel-Proposed, Rockleigh
- Hotel-Proposed, Roxbury Township
- Ramada Inn, Runnemede
- Howard Johnson, Saddle Brook
- Marriott Hotel, Saddle Brook
- Days Inn, Secaucus
- Howard Johnson, Secaucus
- Ramada Inn, Secaucus
- Hilton At Short Hills, Short Hills
- Pier 4 Motel, Somers Point
- Garden State Convention Center, Somerset
- Holiday Inn, Somerset
- Marriott Hotel, Somerset
- Neighborhood Suites-Proposed, Somerset
- Sommerset Plaza Hotel, Somerset
- Summerfield Suites Hotel, Sommerset
- Hewitt Wellington Hotel, Spring Lake
- Hotel-Proposed, Spring Lake
- Loews Glenpointe Hotel, Teaneck
- Appleton Inn, Tinton Falls
- Envoy Inn, Tinton Falls
- Hilton Inn, Tinton Falls
- Residence Inn, Tinton Falls
- Sunrise Suite Hotel, Tinton Falls
- Hotel-Proposed, Toms River
- Hotel-Proposed, Turnersville
- Hotel-Proposed, Wayne
- Howard Johnson-Proposed, Wayne
- Holiday Inn, Wildwood Crest
- Motel, Wrightstown
New Mexico
- Compri Hotel-Proposed, Albuquerque
- Courtyard by Marriott-Airport, Albuquerque
- Fairfield Inn-Proposed, Albuquerque
- Hampton Inn, Albuquerque
- Hilton Hotel, Albuquerque
- Holiday Inn, Albuquerque
- Marriott Hotel, Albuquerque
- Radisson Suite Hotel-Proposed, Albuquerque
- Residence Inn, Albuquerque
- Rodeway Inn, Albuquerque
- Winrock Motor Inn, Albuquerque
- La Quinta Inn, Albuquerque - Airport
- Corkin's Lodge, Chama
- La Quinta Inn, Farmington
- Hilton, Las Cruces
- Las Cruces Hilton, Las Cruces
- Super 8, Las Cruces
- Ski Rio Ski Resort, Miracle Mountain
- Super 8, Raton
- Young's Ranch, Red River
- Eldorado Hotel, Santa Fe
- Homewood Suites Hotel, Santa Fe
- Hotel-Proposed, Santa Fe
- Inn at Loretto, Santa Fe
- Inn on the Alameda, Santa Fe
- La Fonda Hotel, Santa Fe
- La Quinta Hotel, Santa Fe
- Residence Inn, Santa Fe
- Santa Fe Motel, Santa Fe
- Sheraton de Santa Fe, Santa Fe
New York
- Americana Inn, Albany
- Desmond Hotel, Albany
- Hilton Hotel, Albany
- Marriott Hotel, Albany
- Sheraton Inn, Albany
- Susse Chalet, Albany
- VIP Motor Lodge (Howard Johnson), Albany
- Embassy Suites-Proposed, Amherst
- Holiday Inn, Amherst
- Annandale Inn-Proposed, Annandale
- Wampus Inn-Proposed, Armonk
- Treadway Inn, Batavia
- Hampton Inn, Binghamton
- Holiday Inn-Arena, Binghamton
- Holiday Inn-SUNY, Binghamton
- Hotel-Proposed, Binghamton
- Howard Johnson, Binghamton
- Residence Inn, Binghamton
- Sheraton Inn, Binghamton
- Eden Motel, Bronx
- Days Inn-Proposed, Brookhaven
- Residence Inn, Brookhaven
- Brooklyn Hotel-Proposed, Brooklyn
- Hilton Hotel, Brooklyn
- Airport Hotel-Proposed, Buffalo
- Buffalo Hotel, Buffalo
- Days Hotel-Proposed, Buffalo
- Hilton Hotel, Buffalo
- Holiday Inn - Midtown, Buffalo
- Hyatt Hotel, Buffalo
- Hyatt Regency Hotel & Retail Area, Buffalo
- Radisson Hotel, Buffalo
- Ramada Inn-Airport, Buffalo
- Ramada Renaissance Hotel, Buffalo
- Residence Inn-Proposed, Buffalo
- Sheraton Hotel, Buffalo
- Sheraton Inn Buffalo East, Buffalo
- Sheraton Inn-Airport, Buffalo
- Sheraton Inn, Canadaiqua
- Airway Motel, Cheektowaga
- Holiday Inn - Airport, Cheektowaga
- Holiday Inn - Gateway, Cheektowaga
- Quality Inn, Cheektowaga
- Sheraton Buffalo, Cheektowga
- Steeplechase Park-Proposed, Coney Island
- Hilton Inn, Corning
- Resort/Conference Center-Proposed, Cornwall
- Holiday Inn, Cortland
- Roycroft Inn, East Aurora
- Hotel-Proposed, East Elmhurst
- Susse Chalet, East Greenbush
- Nevele Hotel, Ellenville
- Int'l Conf./Learning Center-Propose, Ellis Island
- Days Inn, Elmsford
- Howard Johnson, Elmsford
- Neighborhood Suites Hotel-Proposed, Fishkill
- Residence Inn, Fishkill
- Metropole Hotel, Flushing
- Midway Hotel, Flushing
- Sheraton - Proposed, Flushing Center
- Hotel-Proposed, Garden City
- Wyndham Condominium, Garden City
- Harrison Conference Center, Glen Clove
- Great Neck Hotel, Great Neck
- Comfort Inn, Greece
- Holiday Inn-Proposed, Greece
- Tamarack Lodge, Greenfield Park
- Claudio's Restaurant, Greenport
- Colonie Hill, Hauppauge
- Holiday Inn, Hauppauge
- Marriott Wind Watch Hotel & Golf, Hauppauge
- Marriott Windwatch, Hauppauge
- Ramada Inn, Hauppauge
- Residence Inn, Hauppauge
- Homewood Suites-Proposed, Henrietta
- Howard Johnson, Huntington
- Huntington Townhouse, Huntington
- Hampton Inn, Islandia
- Marriott Wind Watch, Islandia
- Hotel-Proposed, Islip
- Howard Johnson Hotel, Ithaca
- Ramada Inn, Ithaca
- Sheraton Inn, Ithaca
- JFK Hilton, Jamaica
- Howard Johnson, Kingston
- Ramada Inn, Kingston
- Omni Sagamore, Lake George
- Ramada Inn, Lake George
- Former Lake Placid Club Hotel, Lake Placid
- Hilton Hotel, Lake Placid
- Mirror Lake Inn, Lake Placid
- Holiday Inn, Latham
- Howard Johnson, Latham
- Howard Johnson, Liberty
- The New Brown's Resort, Loch Sheldrake
- Convention Center - Proposed, Long Island
- Eastern Nassau/W. Suffolk Hotel, Long Island
- Hyatt Hotel-Proposed, Long Island
- Motel-Proposed, Lynbrook
- Crowne Plaza Hotel, Manhattan
- Hotel Mark, Manhattan
- Proposed Economy Hotel, Manhattan
- Sugar Maples Resort, Maplecrest
- Hotel-Proposed, Middletown
- Howard Johnson, Middletown
- Montauk Yacht Club and Inn, Montauk
- Kutsher's Resort, Monticello
- Motel-Proposed, Nanuet
- Wallkill Valley Inn Project, New Paltz
- Hotel-Proposed, New Rochelle
- Le Richmond Hotel, New Rochelle
- Ramada Plaza Inn and Offices, New Rochelle
- Sheraton Inn, New Rochelle
- Aberdeen Hotel, New York
- American Youth Hostel, New York
- Americana Hotel, New York
- Ashley Hotel, New York
- Astor House-Proposed, New York
- Barbizon Plaza Hotel, New York
- Barclay Hotel, New York
- Battery Park City Hotel-Proposed, New York
- Berkshire Place, New York
- Best Western Woodward Hotel, New York
- Biltmore Hotel, New York
- Broadway Crowne Plaza, New York
- Carlton House Hotel, New York
- Century Paramount Hotel, New York
- Chatwal Inn, New York
- Chatwal Inn on 45th Street, New York
- Chatwal Inn on Park Avenue, New York
- Chinatown Hotel-Proposed, New York
- Courtyard by Marriott-Proposed, New York
- Custom's House, New York
- Days Inn, New York
- Days Inn-West 57th Street, New York
- Doral Inn, New York
- Dover Hotel, New York
- Downtown Athletic Club, New York
- Downtown Conference Center, New York
- Drake Hotel, New York
- Econo Lodge-Proposed, New York
- El Rio Grande, New York
- Embassy Suites-Times Square-Propose, New York
- Empire Hotel, New York
- Essex House, New York
- Executive Hotel, New York
- Giordano Hotel, New York
- Gorham Hotel, New York
- Grand Bay at Equitable Center, New York
- Grand Hyatt Hotel, New York
- Greenwich Street Hotel, New York
- Halloran House, New York
- Hampton House, New York
- Harley Hotel, New York
- Helmsley Hotel, New York
- Hilton Hotel, New York
- Hilton Hotel-Statler, New York
- Holiday Inn, New York
- Holiday Inn Crowne Plaza-Broadway, New York
- Holiday Inn Crowne Plaza-Manhattan, New York
- Holland Hotel, New York
- Hotel Intercontinental, New York
- Hotel Pierre, New York
- Hotel-1926 Broadway-Proposed, New York
- Hotel-East 57th Street-Proposed, New York
- Hotel-Proposed, New York
- Hotel-Tenth Avenue-Proposed, New York
- Howard Hotel, New York
- Howard Johnson, New York
- Journey's Court Hotel-Proposed, New York
- Journey's End, New York
- Kalikow Hotel-Proposed, New York
- Kennedy Inn, New York
- Lancaster Hotel, New York
- Le Meridien Liberty New York, New York
- Lowell Hotel, New York
- Luxury Hotel-Proposed, New York
- Macklowe Hotel, New York
- Madison Towers Hotel, New York
- Manger Windsor Hotel, New York
- Mark Hotel, New York
- Marriott East Side, New York
- Marriott Financial Center, New York
- Marriott Hotel-Proposed, New York
- Marriott Marquis, New York
- Martinique Hotel, New York
- Mayfair Regent, New York
- Milford Plaza Hotel, New York
- Millennium Hotel, New York
- Navarro Hotel, New York
- Nova Park-Gotham, New York
- Novotel, New York
- Omni Berkshire Place, New York
- Omni Park Central, New York
- Parc Fifty One Hotel, New York
- Parker Meridien Hotel, New York
- Peninsula Hotel, New York
- Penta Hotel, New York
- Piccadilly Hotel, New York
- Plaza Hotel, New York
- President Hotel, New York
- Prince George Hotel, New York
- Prince Street Hotel-Proposed, New York
- Proposed Hotel and Apartments, New York
- Proposed Luxury Hotel-Proposed, New York
- Quality Inn, New York
- Quality Suites, New York
- Ramada Inn, New York
- Regent Hotel-Proposed, New York
- Regent of New York-Proposed, New York
- Ritz-Carlton, New York
- Roger Smith Winthrop Hotel, New York
- Roosevelt Hotel, New York
- Russian Tea Room, New York
- Sheraton Hotel, New York
- Sheraton Motor Inn, New York
- Sheraton Park Avenue, New York
- Soho Hotel-Proposed, New York
- St. Moritz Hotel, New York
- St. Regis, New York
- Stanhope, New York
- Sutton Place Hotel, New York
- Taft Hotel, New York
- Tenth Avenue Hotels-Proposed, New York
- The Pierre Hotel, New York
- The Plaza Athenee, New York
- Times Square Hotel-Proposed, New York
- Timeshare-Proposed, New York
- Travel Inn, New York
- Tudor Hotel, New York
- UN Plaza Suite Hotel-Proposed, New York
- Vista International, New York
- Waldorf=Astoria Hotel, New York
- Warwick Hotel, New York
- Westbury Hotel, New York
- Westin Plaza Hotel, New York
- Woodward Hotel-Proposed, New York
- York Club, New York
- Howard Johnson Motel & Restaurant, Newburgh
- Ramada Inn, Newburgh
- Hilton Hotel, Niagara Falls
- Howard Johnson, Norwich
- Hotel-Proposed, Orangetown
- Hudson Valley Conference Center, Ossining
- Sheraton Inn, Ossining
- Hotel-Proposed, Oswego
- Best Western, Painted Post
- Lodge on the Green, Painted Post
- Residence Inn - Proposed, Parsippany
- Senior Living - Proposed, Pearl River
- Drum Hill Hotel, Peekskill
- Holiday Inn, Plainview
- Howard Johnson, Plainview
- Pickwick Motor Inn, Plainview
- Residence Inn, Plainview
- Holiday Inn, Plattsburgh
- Motel-Proposed, Port Jefferson
- Comfort Inn-Proposed, Poughkeepsie
- Courtyard by Marriott, Poughkeepsie
- Radison Hotel, Poughkeepsie
- Wyndham Hotel, Poughkeepsie
- Best Western-LaGuardia Airport, Queens
- Crown Motel, Queens
- Crowne Plaza-LaGuardia Airport, Queens
- Days Inn-LaGuardia Airport, Queens
- Executive Inn, Queens
- Hilton Inn-LaGuardia Airport, Queens
- Hilton-JFK Airport, Queens
- Holiday Inn-JFK Airport, Queens
- Holiday Inn-LaGuardia Airport, Queens
- Howard Johnson, Queens
- Jade East Motel, Queens
- JFK Plaza Hotel, Queens
- Marriott Hotel-JFK Airport, Queens
- Marriott-LaGuardia Airport, Queens
- Metropole Hotel, Queens
- Midway Hotel, Queens
- Riviera Hotel, Queens
- Royce Hotel-LaGuardia Airport, Queens
- Sheraton-LaGuardia East-Proposed, Queens
- Adria Hotel, Queens (Bayside)
- Holiday Inn, Riverhead
- Riverhead Motor Hotel, Riverhead
- Americana Hotel, Rochester
- Courtyard by Marriott-Wrighton, Rochester
- Days Hotel (former Holiday Inn), Rochester
- Hilton-Campus, Rochester
- Holiday Inn, Rochester
- Hotel-Proposed (former St. Bernard), Rochester
- Hyatt Hotel, Rochester
- Lodge at Woodcliff, Rochester
- Omni Suites Hotel, Rochester
- Residence Inn, Rochester
- Sheraton Inn, Rochester
- Stouffer Hotel, Rochester
- Town House Inn, Rochester
- Limited Service Hotel-Proposed, Rome
- Hotel - Proposed, Roslyn
- Roslyn Country Club, Roslyn
- Courtyard by Marriott, Rye
- Le Richemonde Hotel, Ryebrook
- Baron's Cove Inn, Sag Harbor
- Holiday Inn, Saratoga
- Hotel-Proposed, Saratoga Springs
- Howard Johnson, Saugerties
- Holiday Inn, Schenectady
- Ramada Inn, Schenectady
- Dering Harbor Inn, Shelter Island
- Crowne Plaza-Proposed, Smithtown
- Howard Johnson, Smithtown
- Sheraton, Smithtown
- Raleigh Hotel, South Fallsburg
- Hotel-Proposed, Southhold
- Susse Chalet, Spring Valley
- Executive Motor Inn, Springfield Gardens
- Staten Island Hotel, Staten Island
- Imperial Htl/Stevensville Golf Crs., Stevensville
- Holiday Inn, Suffern
- Motel on the Mountain, Suffern
- Browns Hotel, Sullivan County
- Imperial Hotel, Sullivan County
- The New Brown's Resort, Sullivan County
- Courtyard by Marriott, Syracuse
- Embassy Suites, Syracuse
- Hampton Inn, Syracuse
- Hilton Inn, Syracuse
- Holiday Inn-Downtown, Syracuse
- Holiday Inn-Exit 35, Syracuse
- Holiday Inn-Exit 36, Syracuse
- Holiday Inn-Exit 39, Syracuse
- Holiday Inn-I-90, Syracuse
- Homewood Suites Hotel-Proposed, Syracuse
- Hotel Syracuse, Syracuse
- Hotel-Proposed, Syracuse
- Marriott Hotel, Syracuse
- Residence Inn-Proposed, Syracuse
- Sheraton University Inn & Conf.Ctr., Syracuse
- Treadway Inn, Syracuse
- Courtyard by Marriott, Tarrytown
- Tarrytown House Conference Center, Tarrytown
- Westchester Marriott, Tarrytown
- Embassy Suites - Proposed, Times Square, New York
- Marriott Hotel, Uniondale
- Sheraton Nassau Hotel, Uniondale
- Howard Johnson Hotel, Utica
- Howard Johnson, Vestal
- Hotel-Proposed, Watertown
- Convention Hotel-Proposed, Westbury
- Dalts Restaurant, Westbury
- Howard Johnson, Westbury
- Marriott Hotel, Westchester
- Inn-Proposed, Westhampton
- Crowne Plaza, White Plains
- Hotel-Proposed, White Plains
- Howard Johnson, White Plains
- Roger Smith Hotel, White Plains
- Stouffer Westchester Hotel, White Plains
- White Plains Hotel, White Plains
- Anton Meadows, Yaphank
- Quality Suites, Yorktown
- Yorktown Motor Lodge, Yorktown Heights
North Carolina
- Days Inn - Central, Asheville
- Holiday Inn - Airport, Asheville
- Holiday Inn - Tunnel, Asheville
- Inn on the Plaza, Asheville
- Sheraton Inn, Asheville
- Days Inn, Ashville
- Masters Economy Inn - Rocky Mount, Battlebro
- Days Inn, Blowing Rock
- All-Suite Hotel-Proposed, Boone
- Residence Inn-Proposed, Cary
- Carolina Inn, Chapel Hill
- Hilton-Proposed, Chapel Hill
- Charlotte Registry Hotel-Per Diem, Charlotte
- Compri Hotel-Proposed, Charlotte
- Courtyard by Marriott, Charlotte
- Days Inn, Charlotte
- Days Inn-Uptown, Charlotte
- Fairfield Inn, Charlotte
- Howard Johnson, Charlotte
- Howard Johnson Lodge, Charlotte
- Knights Inn, Charlotte
- Manger Motor Inn, Charlotte
- Marriott City Center, Charlotte
- Marriott Hotel-Independence Center, Charlotte
- Masters Economy Inn - Charlotte No, Charlotte
- Masters Economy Inn - Merchandise, Charlotte
- Queen City Motel, Charlotte
- Residence Inn, Charlotte
- Residence Inn-North, Charlotte
- Resistry Hotel, Charlotte
- Royce Suite Hotel, Charlotte
- Sheraton Inn, Charlotte
- Conference Center, Clemmons
- Sheraton Motel, Dunn
- Best Western, Durham
- Cricket Inn, Durham
- Days Inn, Durham
- Dutch Village Inn, Durham
- Fairfield Inn, Durham
- Holiday Inn-West, Durham
- Motel 6, Durham
- Sheraton-University Center, Durham
- The Duke Inn, Durham
- Days Inn, Fayetteville
- Fairfield Inn, Fayetteville
- Holiday Inn, Fayetteville
- Hotel-Proposed, Fayetteville
- Knights Inn, Fayetteville
- Goldsboro Motel, Goldsboro
- Courtyard by Marriott, Greensboro
- Days Inn, Greensboro
- Embassy Suites, Greensboro
- Fairfield Inn, Greensboro
- Hilton, Greensboro
- Marriott Hotel, Greensboro
- Residence Inn, Greensboro
- Sheraton Greensboro, Greensboro
- Hotel-Proposed, Greenville
- Radisson Hotel, High Point
- Days Inn, Lumberton
- Maggie Valley Country Club, Maggie Valley
- Courtyard by Marriott, Raleigh
- Fairfield Inn, Raleigh
- Hampton Inn, Raleigh
- Hilton, Raleigh
- Holiday Inn-Downtown, Raleigh
- Marriott Hotel-RTP, Raleigh
- Raleigh Radisson, Raleigh
- Residence Inn, Raleigh
- Holiday Inn - Airport, Research Triangle Park
- Howard Johnson, Roanoke Rapids
- Sheraton Inn, Rocky Mount
- Days Inn, Rocky Mountain
- Fairfield Inn, Rocky Mountain
- Motel 6, Rocky Mountain
- Days Inn, Rowland
- Sheraton Motel, Selma
- Masters Economy Inn, Smithfield
- Holiday Inn, Southern Pines
- Fairfield Inn, Wilmington
- Hilton, Winston/Salem
- Holiday Inn, Winston/Salem
- Winston Plaza Hotel, Winston/Salem
North Dakota
- Holiday Inn, Bismark
- Radisson Inn, Bismark
- Super 8, Bismark
- Ramada Hotel, Fargo
- Ramada Inn-Proposed, Fargo
- Super 8, Grand Forks
- Super 8, Minot
Ohio
- Holiday Inn-Cascade, Akron
- Ramada Inn, Akron
- Residence Inn, Akron
- Aurora Inn and Pine Lake Trout Club, Aurora
- Sheraton Inn, Aurora
- Woodlands Inn, Aurora
- Courtyard by Marriott, Blue Ash
- Embassy Suites, Blue Ash
- Residence Inn-Proposed, Blue Ash
- Best Western, Cambridge
- Days Inn, Cambridge
- Hilton Hotel, Canton
- Super 8, Canton
- Best Western Northeast, Cincinnati
- Carousel Inn, Cincinnati
- Cincinnati Hotel, Cincinnati
- Clarion Hotel, Cincinnati
- Days Inn, Cincinnati
- Embassy Suites-Proposed, Cincinnati
- Holiday Inn-Downtown, Cincinnati
- Holiday Inn-Eastgate, Cincinnati
- Holiday Inn-Northeast, Cincinnati
- Holiday Inn-Riverfront, Cincinnati
- Holiday Inn-South, Cincinnati
- Hotel-Airport-Proposed, Cincinnati
- Howard Johnson, Cincinnati
- Hyatt, Cincinnati
- Knights Inn, Cincinnati
- KOA Campground, Cincinnati
- Marriott Inn, Cincinnati
- Netherland Hilton, Cincinnati
- Omni Netherland Plaza, Cincinnati
- Proposed Hotel, Cincinnati
- Radisson Inn, Cincinnati
- Ramada Inn, Cincinnati
- Residence Inn, Cincinnati
- Residence Inn-North, Cincinnati
- Sheraton Inn-Proposed, Cincinnati
- Treadway Inn, Cincinnati
- Vernon Manor, Cincinnati
- AmeriSuite Hotel-Proposed, Cleveland
- Downtown Hotel-Proposed, Cleveland
- Fairfield Inn-Brook Park, Cleveland
- Fairfield Inn-West, Cleveland
- Holiday Inn-Airport, Cleveland
- Holiday Inn-Lakeside, Cleveland
- Hyatt Hotel-Proposed, Cleveland
- Marriott Hotel, Cleveland
- Sheraton City Center, Cleveland
- Sheraton Hopkins, Cleveland
- AmeriSuite - Proposed, Columbus
- Embassy Suites, Columbus
- Fairfield Inn-North, Columbus
- Fairfield Inn-West, Columbus
- Hilton Inn, Columbus
- Holiday Inn-Airport, Columbus
- Holiday Inn-City Center, Columbus
- Holiday Inn-Worthington, Columbus
- Hotel-Proposed, Columbus
- Howard Johnson Hotel, Columbus
- Howard Johnson-East, Columbus
- Howard Johnson-West, Columbus
- Knights Inn-West, Columbus
- Marriott Hotel, Columbus
- Nationwide Hotel, Columbus
- Residence Inn-North, Columbus
- Sheraton Plaza Hotel, Columbus
- Sheraton-North, Columbus
- Union Plaza Hotel-Steeplechase, Columbus
- University Inn, Columbus
- Woodfin Hotel, Columbus
- Courtyard by Marriott, Crosswoods
- Courtyard by Marriott, Dayton
- Daytonian Hilton, Dayton
- Fairfield Inn, Dayton
- Hope Hotel & Conference Center, Dayton
- Knights Inn-North, Dayton
- Marriott Hotel, Dayton
- Motel 6, Dayton
- Ramada Inn, Dayton
- Residence Inn-North, Dayton
- Residence Inn By Marriott, Dayton South
- Courtyard by Marriott, Dublin
- Woodfin Suites, Dublin
- East Liverpool Motor Lodge, East Liverpool
- Howard Johnson, Euclid
- Ramada Inn, Fairlawn
- Hampton Inn, Independence
- Howard Johnson, Lima
- Ramada Inn, Lima
- Best Western, Mansfield
- Holiday Inn, Marietta
- Lafayette Hotel, Marietta
- Holiday Inn, Middletown
- Howard Johnson, Middletown
- Regal 8 Inn, Middletown
- Sheraton-Proposed, Milford
- Super 8, Montrose
- Ramada Inn, Sandusky
- Days Inn, Sharonville
- Holiday Inn-Cincinnati North, Sharonville
- Super 8, St. Clairsville
- Holiday Inn, Strongsville
- Balhalla Hotel, Toledo
- Courtyard by Marriott, Toledo
- Fairfield Inn-Airport, Toledo
- Hilton at the Medical College, Toledo
- Hilton Hotel, Toledo
- Holiday Inn, Toledo
- Knights Inn-West, Toledo
- Marriott Portside Hotel, Toledo
- Radisson Hotel, Toledo
- Sofitel, Toledo
- Hampton Inn-Proposed, Wickliffe
- Holiday Inn, Youngstown
- Hotel-Proposed, Youngstown
- Sheraton-Proposed, Youngstown
Oklahoma
- Fountainhead Resort, Mcintosh County
- Residence at the Trails Inn, Norman
- Suit Hotel, Norman
- Courtyard by Marriott, Oklahoma City
- Embassy Suites, Oklahoma City
- Holiday Inn, Oklahoma City
- Lexington Hotel Suites, Oklahoma City
- Lincoln Plaza Hotel, Oklahoma City
- Marriott Hotel, Oklahoma City
- Meridien Plaza, Oklahoma City
- Sheraton Hotel, Oklahoma City
- Arrowhead Resort, Pittsburgh County
- Camelot Hotel, Tulsa
- Doubletree Hotel, Tulsa
- Former Holiday Inn, Tulsa
- Former Holiday Inn-Downtown, Tulsa
- Holiday Inn, Tulsa
- Holiday Inn-Convention Center, Tulsa
- La Quinta Inn, Tulsa
- Marriott Hotel, Tulsa
- Mayo Hotel, Tulsa
- Residence Inn, Tulsa
- Westin Hotel, Tulsa
Oregon
- Inn At Face Rock, Bandon
- Courtyard by Marriott, Beaverton
- Red Lion Motel, Bend
- Sunriver Lodge and Resort, Bend
- Econolodge Motel, Eugene
- Valley River Inn, Eugene
- Residence Inn Portland-South, Lake Oswego
- Big Creek Resort-US Highway 101, Lane County
- Embassy Suites, Portland
- Holiday Inn Crowne Plaza - Proposed, Portland
- Holiday Inn-Airport, Portland
- Holiday Inn-South, Portland
- Proposed Sheraton Suites, Portland
- Red Lion - Jantzen Beach, Portland
- Red Lion Inn-Lloyd Center, Portland
- Red Lion Inn-Portland Center, Portland
- Residence Inn - Proposed, Portland
- Vintage Plaza Hotel, Portland
- Wells Building, Portland
- Execulodge Motel, Salem
- Oregon Capital Inn, Salem
- Springfield Red Lion Inn, Springfield
- Sunriver Resort, Sunriver
Pennsylvania
- Allentown Hilton Hotel, Allentown
- Holiday Inn, Allentown
- Proposed Microtel, Allentown
- Quality Inn, Allentown
- Bedford Springs Hotel, Bedford
- Compri Hotel-Proposed, Bensalem
- Days Inn-Proposed, Bensalem
- Holiday Inn, Bensalem
- Residence Inn By Marriott, Berwyn
- Econolodge, Bristol
- Days Inn, Brookville
- Buck Hill Falls Inn, Buck Hill Falls
- Howard Johnson, Butler
- Holiday Inn, Chambersburg
- Days Inn, Clarion
- Embassy Suites, Coraopolis
- Hydeholde Country House-Proposed, Coraopolis
- Days Inn, Danville
- Holiday Inn, Dubois
- Lafayette Inn-Proposed, Easton
- Howard Johnson Hotel, Erie
- Ramada Inn, Erie
- Holiday Inn, Essington
- Quality Suites-Proposed, Essington
- Super 8-Proposed, Essington
- Howard Johnson, Gibsonia
- Compri Hotel-Proposed, Harrisburg
- Holiday Inn, Harrisburg
- Marriott Hotel, Harrisburg
- Penn Harris Inn, Harrisburg
- Sheraton Inn, Harrisburg
- Super 8-Proposed, Harrisburg
- Holiday Inn, Hazleton
- Super 8-Proposed, Hazleton
- Plaza Valley Forge Hotel, King of Prussia
- Radisson Hotel, King of Prussia
- Sheraton Hotel, King of Prussia
- Valley Forge Complex, King of Prussia
- Valley Forge Hilton, King of Prussia
- Motel-Proposed, Lake Ariel
- Days Inn, Lancaster
- Holiday Inn-Route 30E, Lancaster
- Holiday Inn-Route 501, Lancaster
- Sheraton Lancaster Golf Resort, Lancaster
- Super 8-Proposed, Lancaster
- Holiday Inn, Lionville
- Hilton-Great Valley, Malvern
- Summerfield Suite-Proposed, Malvern
- Days Inn, Meadville
- Hilton Inn, Monroeville
- Holiday Inn-West, Monroeville
- Economy Hotel, Montgomery Township
- Holiday Inn, New Hope
- Treadway Inn, Newport
- Residence Inn-Proposed, Paoli
- Conference Center-Proposed, Penn State
- Barclay Hotel, Philadelphia
- Bellevue, Philadelphia
- Courtyard by Marriott-Devon, Philadelphia
- Courtyard-Willow Grove, Philadelphia
- Days Inn-Airport, Philadelphia
- Econo Lodge-Franklin Towne, Philadelphia
- Essex Hotel, Philadelphia
- Franklin Motor Inn, Philadelphia
- Franklin Plaza Hotel, Philadelphia
- Guest Quarters Hotel, Philadelphia
- Hampton Inn-Proposed, Philadelphia
- Health Club-Proposed, Philadelphia
- Hilton Inn, Philadelphia
- Hilton Inn-Northeast, Philadelphia
- Holiday Inn-City Center, Philadelphia
- Holiday Inn-City Line, Philadelphia
- Hub Motor Inn, Philadelphia
- Hyatt-Proposed, Philadelphia
- Marriott Hotel, Philadelphia
- Marriott Hotel-Airport, Philadelphia
- Omni Philadelphia, Philadelphia
- Penn Center Inn, Philadelphia
- Quality Inn-Center City, Philadelphia
- Residence Inn-Proposed, Philadelphia
- Rittenhouse Hotel, Philadelphia
- Treadway Mohawk, Philadelphia
- Treadway Roosevelt, Philadelphia
- Residence Inn, Philadelphia/Berwyn
- Clubhouse Inn, Pittsburgh
- Courtyard by Marriott, Pittsburgh
- Hampton Inn at Playhouse Square, Pittsburgh
- Hilton Hotel, Pittsburgh
- Holiday Inn-Greentree, Pittsburgh
- Holiday Inn-North, Pittsburgh
- Holiday Inn-Parkway-East, Pittsburgh
- Holiday Inn-Parkway-West, Pittsburgh
- Hotel-Proposed, Pittsburgh
- Howard Johnson Hotel, Pittsburgh
- Marriott Hotel, Pittsburgh
- Marriott-Airport, Pittsburgh
- Motel 6, Pittsburgh
- Quality Inn, Pittsburgh
- Royce Hotel-Airport, Pittsburgh
- U.S.S. Hotel-Proposed, Pittsburgh
- Westin William Penn, Pittsburgh
- Courtyard By Marriott, Pittsburgh Airport
- Holiday Inn, Reading
- Sheraton Hotel, Reading
- Hilton at Lackawanna Station, Scranton
- Hilton Hotel, Scranton
- Sheraton Inn, Stroudsburg
- HoJo Inn, Tannersville
- Hilton-Northeast, Trevose
- Compri Hotel-Proposed, Valley Forge
- Courtyard by Marriott, Valley Forge
- Holiday Inn-Meadowlands, Washington
- Holiday Inn, Wilkes-Barre
- Days Inn-Proposed, Williamsport
- Hotel-Proposed, Williamsport
- Hampton Inn - Proposed, Willow Grove
- Holiday Inn-Market Street, York
- Holiday Inn-Route 30 and I-83, York
- Ramada Inn, York
- Super 8-Proposed, York
Rhode Island
- Cresthil-Proposed, Lincoln
- Courtyard by Marriott, Newport
- Vanderbilt Hotel-Convention Center, Newport
- Quality Inn, North Kingston
- Biltmore Plaza, Providence
- Convention Center Hotel-Proposed, Providence
- Holiday Inn Providence - Downtown, Providence
- Hotel-Proposed, Providence
- Marriott Hotel, Providence
- Sheraton-Airport, Providence
- Susse Chalet, Smithfield
- Howard Johnson, Warwick
- Residence Inn-Proposed, Warwick
- Susse Chalet, Warwick
South Carolina
- Quality Inn Motel, Anderson
- Super 8, Anderson
- Budget Hotel - Proposed, Charleston
- Charleston Center Hotel-Proposed, Charleston
- Cooper River Inn, Charleston
- Days Inn, Charleston
- Francis Marion Hotel, Charleston
- Hampton Inn-Proposed, Charleston
- Hawthorne Suites Hotel, Charleston
- Holiday Inn, Charleston
- Holiday Inn-Airport, Charleston
- Holiday Inn-Riverview, Charleston
- Masters Economy Inn - Mt. Pleasant, Charleston
- Masters Economy Inn - Rivers Ave, Charleston
- Middleton Inn, Charleston
- Omni Charleston, Charleston
- Quality Inn, Charleston
- Trusthouse Forte, Charleston
- Courtyard by Marriott, Columbia
- Courtyard by Marriott-Northeast, Columbia
- Courtyard by Marriott-Northwest, Columbia
- Embassy Suites, Columbia
- Marriott Hotel, Columbia
- Masters Economy Inn - I-26, Columbia
- Masters Economy Inn - Knox Abbot, Columbia
- Motel 6, Columbia
- Residence Inn, Columbia
- Coral Beach Hotel, Coral Beach
- Days Inn, Dillon
- Save Inn, Fairplay
- Fairfield Inn, Florence
- Holiday Inn, Florence
- Days Inn, Gaffney
- Courtyard by Marriott, Greenville
- Fairfield Inn, Greenville
- Greenville Hilton Hotel, Greenville
- Ramada Inn, Greenville
- Super 8, Greenwood
- Days Inn, Hardeeville
- Fairfield Inn, Hilton Head
- Hilton Head Inn, Hilton Head
- Holiday Inn, Hilton Head
- Inter-Continental Hotel, Hilton Head
- Islander Inn, Hilton Head
- Quality Suites-Proposed, Hilton Head
- Residence Inn-Proposed, Hilton Head
- Sheraton Inn, Hilton Head
- PGA East Resort-Proposed, Kiawah Island
- Save Inn, Lake Hartwell
- Days Inn, Mt. Pleasant
- Coral Beach Hotel, Myrtle Beach
- Radisson Hotel, Myrtle Beach
- Best Western Inn, North Charleston
- Budget Hotel-Proposed, North Charleston
- Days Inn, North Charleston
- Northwoods Atrium Inn, North Charleston
- Days Inn, Santee
- Holiday Inn-West, Spartanburg
- Howard Johnson, Spartanburg
- Residence Inn, Spartanburg
South Dakota
- Holiday Inn, Aberdeen
- Holiday Inn, Rapid City
- Holiday Inn, Sioux Falls
- Super 8, Sioux Falls
- Holiday Inn, Spearfish
Tennessee
- Ameri Suite Hotel-Proposed, Brentwood
- Courtyard by Marriott, Brentwood
- Holiday Inn, Bristol
- Holiday Inn-Southeast, Chattanooga
- Howard Johnson, Chattanooga
- Marriott Hotel, Chattanooga
- Motel 6, Chattanooga
- Sheraton Inn, Chattanooga
- Super 8, Chattanooga
- Holiday Inn, Cove Lake
- Masters Economy Inn, Dickson
- Comfort Inn-Proposed, Elizabethton
- Park Vista Hotel, Gatlinburg
- Holiday Inn-I-40, Jackson
- Holiday Inn, Johnson City
- Super 8, Johnson City
- Fairfield Inn, Johnson Park
- Holiday Inn, Kingsport
- Courtsouth Healthclub-North, Knoxville
- Courtsouth Healthclub-South, Knoxville
- Courtsouth Healthclub-West, Knoxville
- Days Inn, Knoxville
- Hilton Hotel, Knoxville
- Howard Johnson-Westhills, Knoxville
- Motel 6, Knoxville
- Quality Inn, Knoxville
- Ramada Inn-West, Knoxville
- Rodeway Inn, Knoxville
- Courtyard by Marriott, Memphis
- Courtyard by Marriott-Airport, Memphis
- Holiday Inn - Crowne Plaza, Memphis
- Holiday Inn-East, Memphis
- Holiday Inn-East Poplar, Memphis
- Holiday Inn-I-40-Sycamore View, Memphis
- Holiday Inn-Memphis Int'l Airport, Memphis
- Hyatt Regency, Memphis
- Lexington Hotel Suites, Memphis
- Motel 6, Memphis
- Omni Hotel, Memphis
- Proposed Fairfield Inn, Memphis
- Residence Inn, Memphis
- La Quinta Inn, Memphis - Airport
- Brown County Inn, Nashville
- Capital Mall Conv. Center-Proposed, Nashville
- Clarion Maxwell House, Nashville
- Courtyard by Marriott-Airport, Nashville
- Days Inn, Nashville
- Doubletree Hotel, Nashville
- Grosvenor, Nashville
- Hampton Inn, Nashville
- Holiday Inn Crowne Plaza, Nashville
- Holiday Inn Express, Nashville
- Holiday Inn-Briley Parkway, Nashville
- Marriott Hotel, Nashville
- Nashville Union Station, Nashville
- Ramada Inn, Nashville
- Sheraton Hotel, Nashville
- Sheraton Music City, Nashville
- Stouffer Hotel, Nashville
- Super 8, Nashville
- Union Station Hotel, Nashville
- AmeriSuite, Oakridge
- Holiday Inn, Oakridge
- Super 8-Proposed, Union City
Texas
- Harvey Hotel, Addison
- Days Inn, Amarillo
- Motel 6, Amarillo
- Radisson Hotel-Proposed, Amarillo
- Super 8 Motel, Amarillo
- La Quinta Inn, Amarillo - Airport
- Courtyard by Marriott, Arlington
- Hilton Hotel, Arlington
- Holiday Inn, Arlington
- Lexington Suites Hotel, Arlington
- Compri Hotel-Proposed, Austin
- Driskill Hotel, Austin
- Embassy Suites-Austin Town Lake, Austin
- Embassy Suites-North, Austin
- Fairfield North, Austin
- Four Seasons Hotel, Austin
- Holiday Inn, Austin
- Holiday Inn-Austin Town Lake, Austin
- La Quinta Inn, Austin
- Marriott Hotel, Austin
- Proposed Fairfield Inn, Austin
- Quality Inn, Austin
- Residence South, Austin
- La Quinta Inn, Austin - Ben White
- Holiday Inn Airport, Austins Cities
- Holiday Inn, Bay Town
- Hilton Hotel, Beaumont
- Holiday Inn, Beaumont
- Courtyard by Marriott, Bedford
- Holiday Inn, Brownsville
- La Quinta Inn, Brownsville
- Hilton Hotel, College Station
- Ramada Inn, College Station
- Holiday Inn, Conroe
- Corpus Christi Hotel-Airport, Corpus Christi
- Days Inn, Corpus Christi
- Hilton - Proposed, Corpus Christi
- Holiday Inn, Corpus Christi
- Holiday Inn-Airport, Corpus Christi
- La Quinta Inn, Corpus Christi - North
- La Quinta Inn, Corpus Christi - South
- Allstar Inn, Dallas
- Ambassador Plaza Hotel, Dallas
- Arlington Hilton, Dallas
- Bradford Plaza Hotel, Dallas
- Bristol Suites, Dallas
- Convention Center Hotel-Proposed, Dallas
- Courtyard by Marriott, Dallas
- Courtyard by Marriott-Northeast, Dallas
- Courtyard by Marriott-Plano, Dallas
- Courtyard by Marriott-Stemmons, Dallas
- Dallas Grand Hotel, Dallas
- Doubletree Inn, Dallas
- Embassy Suites, Dallas
- Fairmont Hotel, Dallas
- Harvey Hotel, Dallas
- Hilltop, Dallas
- Hilton Inn-LBJ, Dallas
- Hilton-Arlington, Dallas
- Holiday Inn - North, Dallas
- Holiday Inn Crowne Plaza, Dallas
- Holiday Inn-Brook Hollow, Dallas
- Holiday Inn-South, Dallas
- Houstonian Hotel, Dallas
- Howard Johnson-East, Dallas
- Lexington Hotel Suites, Dallas
- Loews Anatole Hotel, Dallas
- Marriott Hotel-Airport, Dallas
- Marriott-Park Central, Dallas
- Marriott-Quorum, Dallas
- Melrose Hotel, Dallas
- Motel 6, Dallas
- Omni Melrose Hotel, Dallas
- Park Plaza, Dallas
- Propsed Hotel - DFW, Dallas
- Ramada Inn Convention Center, Dallas
- Ramada-Market Center, Dallas
- Registry Hotel, Dallas
- Residence Inn-Market Center, Dallas
- Sheraton Grand, Dallas
- Southland Center Hotel, Dallas
- Statler Hilton Hotel, Dallas
- Summit Hotel, Dallas
- Westin Galleria Hotel, Dallas
- La Quinta Inn, Dallas - DFW
- La Quinta Inn, Dallas - North Park
- La Quinta Inn, Dallas - Plano
- La Quinta Inn, Dallas - Richardson
- Allstar Inn, El Paso
- Hilton Inn-Airport, El Paso
- La Quinta Hotel-Airport, El Paso
- Rodeway Inn, El Paso
- Travelers Inn, El Paso
- Westin Paso del Norte, El Paso
- La Quinta Inn, El Paso - Lomaland
- Allstar Inn, Euless
- La Quinta Inn, Euless
- Allstar Inn, Fort Worth
- Courtyard by Marriott, Fort Worth
- Days Inn Downtown, Fort Worth
- Hilton Hotel, Fort Worth
- Holiday Inn-North, Fort Worth
- Holiday Inn-South, Fort Worth
- Lexington Suites Hotel, Fort Worth
- Metro Center Hotel, Fort Worth
- Radisson Plaza Hotel, Fort Worth
- Residence Inn, Fort Worth
- La Quinta Inn, Fort Worth - East
- Holiday Inn, Harlingen
- La Quinta Inn, HI-LA Marque
- Crowne Plaza-Houston Park, Houston
- Days Inn, Houston
- Days Inn-Hobby, Houston
- Doubletree Hotel, Houston
- Embassy Suites, Houston
- Galleria Gardens, Houston
- Harvest House Hotel, Houston
- Harvey Hotel Medical Center, Houston
- Hilton Inn-West, Houston
- Holiday Inn I-10 East, Houston
- Holiday Inn-Downtown, Houston
- Holiday Inn-East, Houston
- Holiday Inn-Greenway Plaza, Houston
- Holiday Inn-Hobby, Houston
- Holiday Inn-Medical Center, Houston
- Holiday Inn-NASA, Houston
- Holiday Inn-North, Houston
- Holiday Inn-Northwest, Houston
- Holiday Inn-Southwest, Houston
- Host Hotel International, Houston
- Hotel Meridien, Houston
- Hotel-Proposed, Houston
- Houston House, Houston
- Houston Medical Center, Houston
- Houston Park 10 Crowne Plaza, Houston
- La Quinta Hotel-Astrodome, Houston
- La Quinta Hotel-Baytown, Houston
- La Quinta Hotel-CY Fair, Houston
- La Quinta Hotel-Hobby, Houston
- La Quinta Inn-Stafford, Houston
- Lexington Hotel Suites, Houston
- Marriott Astrodome, Houston
- Marriott Hotel, Houston
- Marriott Hotel-Medical Center, Houston
- Marriott-Airport, Houston
- Motel 6, Houston
- Remington, Houston
- Residence Inn, Houston
- Rodeway Inn, Houston
- Rodeway Inn-Hobby, Houston
- Shamrock Hilton Hotel, Houston
- Sheraton Hotel, Houston
- Sheraton Houston House, Houston
- Sheraton Houston Place Hotel, Houston
- Sheraton Town and Country, Houston
- Sofitel, Houston
- Stouffer Greenway Plaza, Houston
- Suite Hotel-Proposed, Houston
- Whitehall, Houston
- Whitehall Hotel Conversion to HI, Houston
- La Quinta Inn, Houston - Sharpstown
- La Quinta Inn, Houston - East
- La Quinta Inn, Houston - Loop 1960
- La Quinta Inn, Houston - Northwest
- La Quinta Inn, Houston- SW Freeway
- Holiday Inn, Huntsville
- Harvey Hotel DFW, Irvine
- Allstar Inn, Irving
- Hampton Inn, Irving
- Hampton Inn-Proposed, Irving
- Harvey Hotel-D/FW Airport, Irving
- Holiday Inn-Texas Stadium, Irving
- Marriott Hotel, Irving
- Holiday Inn, Kingsville
- Del Lago Hotel, Lake Conroe
- Hilton Inn, Laredo
- La Posada, Laredo
- Courtyard by Marriott, Las Colinas
- La Quinta Inn, Longview
- Hilton Inn, Lubbock
- Holiday Inn, Lubbock
- Residence Inn, Lubbock
- La Quinta Inn, Midland
- Holiday Inn, New Braunfels
- All Star Inn, North Richland Hills
- La Quinta Inn, Odessa
- Holiday Inn, Orange
- Holiday Inn, Paris
- Plano Harvey Hotel, Plano
- La Quinta Inn, Round Rock
- Sheraton Inn, San Angelo
- Coachman Inn-Proposed, San Antonio
- Courtyard by Marriott-Downtown, San Antonio
- Courtyard by Marriott-Medical Ctr., San Antonio
- Crockett Hotel, San Antonio
- Days Inn, San Antonio
- Fairfield - North, San Antonio
- Gunter Hotel, San Antonio
- Holiday Inn-Airport, San Antonio
- Holiday Inn-Market Square, San Antonio
- Holiday Inn-North, San Antonio
- Holiday Inn-Northwest, San Antonio
- Holiday Inn-Riverwalk, San Antonio
- La Quinta Hotel-Ingram, San Antonio
- La Quinta Hotel-Lackland, San Antonio
- La Quinta Hotel-Toepperwein, San Antonio
- Lexington Hotel Suites, San Antonio
- Marriott Hotel-Proposed, San Antonio
- Marriott Inn-North, San Antonio
- Proposed Fairfield Inn, San Antonio
- La Quinta Inn, San Antonio - Windsor
- La Quinta Inn, San Antonio - Wurzbach
- Holiday Inn, San Marcos
- La Quinta Inn, SAT-Toepperwein
- Sheraton Hotel, South Padre Island
- La Quinta Inn, Tyler
- Sheraton, Tyler
- Sheraton Inn, Tyler
- Traveler's Choice Inn, Tyler
- Hilton Hotel, Waco
- Gateway Inn, Wichita Falls
- Hilton Hotel, Wichita Falls
Utah
- Mount Holly Ski Resort, Beaver
- Hotel-Proposed, Brigham City
- Motel-Proposed, Cedar City
- Proposed Mayflower Hotel, Deer Valley
- Stein Eriksen Lodge, Deer Valley
- Deer Valley Resort, Park City
- Omni Yarrow, Park City
- Prospector Square Resort, Park City
- Yarrow Resort, Park City
- Seven Peaks Resort and Hotel, Provo
- Comfort Inn, Salt Lake City
- Doubletree, Salt Lake City
- Hilton Hotel-Airport, Salt Lake City
- Holiday Inn, Salt Lake City
- Holiday Inn-Salt Palace, Salt Lake City
- Hotel Utah, Salt Lake City
- Hotel-Proposed, Salt Lake City
- La Quinta Inn, Salt Lake City
- Nendels Inn, Salt Lake City
- New Grande Hotel, Salt Lake City
- Red Lion Hotel, Salt Lake City
- Sheraton Hotel, Salt Lake City
- Super 8, Salt Lake City
- University Park Hotel (Desktop Rev), Salt Lake City
- Ramada Inn-Proposed, Sandy
Vermont
- Ramada Inn, Bennington
- Bolton Valley Corporation, Bolton Valley
- Quality Inn, Brattleboro
- Radisson Hotel, Burlington
- Smugglers Notch, Cambridge
- Inn-Proposed, Essex
- Cascade Lodge, Killington
- Inn of the Six Mountains, Killington
- Mountain Inn, Killington
- Equinox Hotel, Manchester
- Howard Johnson Inn, Rutland
- Quality Inn, Stowe
- Conference Center-Proposed, Stratton Mountain
- Sugarbush Inn, Sugarbush
- Susse Chalet, Williston
Virginia
- Comfort Inn, Abingdon
- Best Western, Alexandria
- Comfort Inn, Alexandria
- Compri Hotel-Proposed, Alexandria
- Embassy Suites, Alexandria
- Howard Johnson, Alexandria
- Marriott Suites, Alexandria
- Ramada Inn, Alexandria
- Best Western, Arlington
- Gateway Marriott, Arlington
- Hyatt Arlington Hotel, Arlington
- Hyatt Regency, Arlington
- Key Bridge Marriott, Arlington
- Marriott Hotel, Arlington
- Sheraton Crystal City Hotel, Arlington
- Sheraton National Hotel, Arlington
- Stouffer Concourse Hotel, Arlington
- Mountain Lake Hotel, Blacksburg
- Holiday Inn, Bristol
- Howard Johnson, Bristol
- Days Inn, Carmel Church
- Westfields International, Chantilly
- Boar's Head Inn, Charlottesville
- Cavalier Inn, Charlottesville
- Courtyard by Marriott, Charlottesville
- Hilton-University, Charlottesville
- Holiday Inn-North, Charlottesville
- Omni Charlottesville, Charlottesville
- Radisson-Proposed, Charlottesville
- Super 8, Charlottesville
- Days Inn, Chester
- Howard Johnson, Chester
- Days Inn, Colonial Heights
- Holiday Inn, Covington
- Embassy Suites, Crystal City
- Holiday Inn Crowne Plaza, Crystal City
- Hyatt Hotel, Crystal City
- Marriott Crystal Gateway Hotel, Crystal City
- Comfort Inn-Proposed, Dahlgren
- Days Inn, Emporia
- Courtyard by Marriott, Fairfax
- Embassy Suites, Fairfax
- Neighborhood Suites-Proposed, Fairfax
- Hampton Inn-Proposed, Fairfax City
- Westfields International, Fairfax County
- Marriott Hotel, Fairview
- Econo Lodge, Farmingville
- Comfort Inn-Proposed, Farmville
- Comfort Inn, Frederick County
- Motel 6, Fredericksburg
- Courtyard by Marriott, Hampton
- Days Inn, Hampton
- Fairfield Inn, Hampton
- Courtyard by Marriott, Herndon
- Embassy Suites Hotel, Herndon
- Ramada Renaissance and Health Club, Herndon
- Residence Inn-Proposed, Herndon
- Worldgate Marriott Hotel, Herndon
- Hotel-Proposed, Hopewell
- Keswick Inn, Keswick
- Holiday Inn, Lexington
- Radisson Hotel, Lynchburg
- Courtyard by Marriott, Manassas
- Holiday Inn, Marion
- Hilton, McLean
- Days Inn, Norfolk
- Marriott Waterside Hotel, Norfolk
- Omni Hotel, Norfolk
- Waterfront Hotel - Proposed, Norfolk
- 135-Suite Hotel-Proposed, Portsmouth
- Waterfront Suite Hotel-Proposed, Portsmouth
- Comfort Inn, Princeton
- Comfort Inn, Pulaski County
- Embassy Suites Hotel, Reston
- Hyatt Hotel, Reston
- Best Western Kings Quarters, Richmond
- Courtyard by Marriott, Richmond
- Embassy Suites Hotel, Richmond
- Hampton Inn, Richmond
- Holiday Inn, Richmond
- Howard Johnson Lodge, Richmond
- Hyatt House Hotel, Richmond
- La Quinta Hotel, Richmond
- Marriott Hotel, Richmond
- Omni Richmond, Richmond
- Radisson Hotel, Richmond
- Ramada Renaissance Hotel, Richmond
- Residence Inn, Richmond
- Days Inn, Richmond (Broad)
- Days Inn, Richmond (Byrd)
- Holiday Inn, Roanoke
- Holiday Inn - Airport, Roanoke
- Holiday Inn - Civic Center, Roanoke
- Holiday Inn - South, Roanoke
- Hotel Roanoke, Roanoke
- Howard Johnson, Roanoke
- Marriott - Roanoke Airport, Roanoke
- Marriott Hotel, Roanoke
- Holiday Inn, Salem
- Super 8, South Hill
- Days Inn, Springfield
- Hilton, Springfield
- Holiday Inn, Staunton
- Stonewall Jackson Hotel, Staunton
- Hampton Inn - Proposed, Tyson's Corner
- Embassy Suites, Tysons Corner
- Marriott Hotel, Tysons Corner
- Residence Inn, Tysons Corner
- Ritz Carlton-Proposed, Tysons Corner
- Courtyard by Marriott, Virginia Beach
- Courtyard by Marriott-Lynnhaven, Virginia Beach
- Fairfield Inn, Virginia Beach
- Hotel-Proposed, Virginia Beach
- Pavilion Tower Hotel, Virginia Beach
- Ramada Inn - Oceanside, Virginia Beach
- International Conference Center, Westfields
- Howard Johnson, Wheeling
- Fort Magruder Inn, Williamsburg
- Governor's Inn, Williamsburg
- Holiday Inn-East, Williamsburg
- Holiday Inn-West, Williamsburg
- Royce Hotel, Williamsburg
- Williamsburg Hilton, Williamsburg
- Best Western-Proposed, Wytheville
Washington
- Bellevue Thunderbird Motor Inn, Bellevue
- Embassy Suites, Bellevue
- Hampton Inn, Bellevue
- La Quinta, Bellevue
- Residence Inn Seattle-East, Bellevue
- Ramada Inn, Bothell
- Rattling Spring Hotel, Harpers Ferry
- Motel 6, Issaquah
- AmeriSuite, Kent
- Homecourt Suite Hotel, Kent
- Embassy Suite, Lynnwood
- Residence Inn-Seattle North, Lynnwood
- Red Lion Inn at Pasco, Pasco
- Redmond Motel, Redmond
- Hampton Inn, Sea Tac
- Holiday Inn Airport, Sea Tac
- Thunderbird Inn, Sea Tac
- Alexis Hotel, Seattle
- Courtyard by Marriott-South Center, Seattle
- Doubletree Inn at South Center, Seattle
- Doubletree Plaza, Seattle
- Hampton Inn-Airport, Seattle
- Holiday Inn Crowne Plaza, Seattle
- Holiday Inn-Sea Tac, Seattle
- La Quinta, Seattle
- Lake Union Residence Inn, Seattle
- Marriott Hotel-Airport, Seattle
- Marriott Sea-Tac Hotel, Seattle
- Plaza Park Suites, Seattle
- Ramada Inn-Airport, Seattle
- Red Lion, Seattle
- Stouffer Madison Hotel, Seattle
- Travelodge-Proposed, Seattle
- Westin Hotel, Seattle
- Courtyard by Marriott, Spokane
- Gateway Hotel, Spokane
- Holiday Inn-West, Spokane
- Red Lion Inn, Spokane
- Super 8, Spokane
- Hilton-Village Green, Tacoma
- Hotel-Proposed, Tacoma
- Park Shore Inn, Tacoma
- Tacoma Sheraton Hotel, Tacoma
- Embassy Suites Hotel, Tukwila
- Hampton Inn, Tukwila
- Residence Inn-Seattle South, Tukwila
- Red Lion Quay, Vancouver
- Residence Inn-Portland North, Vancouver
- Super 8, Wenatchee
- Thunderbird Motor Inn, Yakima
West Virginia
- Comfort Inn-Proposed, Charleston
- Holiday Inn, Clarksburg
- Holiday Inn, Fairmont
- Hotel-Proposed, Harpers Ferry
- Holiday Inn, Huntington
- Comfort Inn-Proposed, Morgantown
- Holiday Inn, Morgantown
- Motel-Proposed, Morgantown
- Comfort Inn, Princeton
- Motel-Proposed, Princeton
- Hotel-Proposed, Wheeling
- Howard Johnson, Wheeling
Wisconsin
- Super 8, Ashland
- Holiday Inn, Beloit
- Embassy Suites Hotel-Proposed, Brookfield
- Marriott-Milwaukee, Brookfield
- Holiday Inn, Eau Claire
- Residence Inn, Glendale
- Granada Royale-Proposed, Green Bay
- Holiday Inn-Downtown, Green Bay
- Residence Inn-Proposed, Green Bay
- Super 8, Janesville
- Super 8, Kenosha
- Playboy Resort, Lake Geneva
- Concourse Hotel, Madison
- Fairfield Inn, Madison
- Hampton Inn - East, Madison
- Hampton Inn - West, Madison
- Compri Hotel-Proposed, Milwaukee
- Embassy Suite, Milwaukee
- Fairfield Inn, Milwaukee
- Holiday Inn-Airport, Milwaukee
- Holiday Inn-West, Milwaukee
- Hotel and Conv. Ctr. East-Proposed, Milwaukee
- Hyatt Regency, Milwaukee
- Marc Plaza, Milwaukee
- Marriott Inn, Milwaukee
- Omni Suite Hotel-Proposed, Milwaukee
- Super 8-Airport, Milwaukee
- Olympia Village Resort, Oconomowoc
- Scotsland Resort, Oconomowoc
- Sheraton, Racine
- Claridge Motor Inn, Rhinelander
- Super 8, Waukesha
- Holiday Inn, Wausau
- Mead Inn, Wisconsin Rapids
Wyoming
- Days Inn, Casper
- Flying L. Skytel, Cody
- Super 8, Cody
- Snow King Resort, Jackson
- Super 8, Jackson
- Wort Hotel, Jackson
- Development-Proposed, Jackson Hole
- Colter Bay Village, Moran
- Jackson Lake Lodge, Moran
- Jenny Lake Lodge, Moran
- Best Western-Bel Air, Rawlins
- Bridger Inn, Rawlins
- La Quinta Inn, Rock Springs
Western Europe
Belgium
- Oostkamp Hotel, Bruges
- Proposed Residence Inn, Brussels
- SAS Royal Hotel, Brussels
Denmark
- Proposed Hotel, Copenhagen
France
- The Miramar, Biarritz
- Chateau D'arc en Barroi, Haute-Marne
- Le Grand, Paris
- Royal Monceau, Paris
Germany
- Cumberland House, Berlin
- Munchen Penta Hotel, Munchen
Holland
- Carlton - Cannes & Amstel, Amsterdam
- The Pulitzer Hotel, Amsterdam
Spain
- Le Meridien, Barcelona
- Princess Sophia, Barcelona
- Hotel Los Monteros, Marbella
- Incosol Spa & Hotel, Marbella
- Proposed Hyatt Resort, Marbella
United Kingdom
- Copthorne Hotel, Aberdeen
- Copthorne Hotel, Birmingham
- Hyatt Regency, Birmingham
- Holiday Inn, Cambridge
- Copthorne Hotel, Cardiff
- Great Eastern Hotel, England
- Copthorne Hotel, Glasgow
- Hanbury Manor Hotel, Hertfordshire
- 47 Park Street, London
- Bailey's Hotel, London
- Basil Street Hotel, London
- Basil Street Hotel, Knightsbridge, London
- Britannic Tower, London
- Chelsea Hotel, London
- Chesterfield Hotel, London
- Chesterfield Hotel, Mayfair, London
- Copthorne Hotels, London
- Copthorne Tara Hotel, London
- Dorchester Mayfair, London
- Executive Hotel, London
- Marriott Hotel, London
- May Fair, London
- Plaza Hotel, London
- Proposed Hotel Conversion, London
- Proposed Hotel-The City, London
- Regent Hotel, London
- Regent London Hotel, London
- Sheraton Belgravia, London
- Sheraton Park Tower, London
- St. James Court Hotel, London
- The Executive Hotel, London
- Windsor Hotel, London
- Copthorne Hotel, Manchester
- Copthorne Hotel, Newcastle
- Copthorne Hotel, Slough/Windsor
- Swallow Hotel, Stockton
- Copthorne Hotel-Effingham Park, Sussex
- Copthorne Hotel-Gatwick, Sussex
Middle East and North Africa
Egypt
- Sheraton Anni Cruise Ship,
- Sheraton Aton Cruise Ship,
- Sheraton Hotp Cruise Ship,
- Sheraton Tut Cruise ship,
- Aswan Oberol Hotel, Aswan
- Cairo Sheraton Hotel, Cairo
- Hotel - Proposed, Cairo
- Lido Hotel, Cairo
- Meridien Hotel, Cairo
- Novotel Cairo Airport, Heliopolis, Cairo
- Proposed Resort Complex, Hurghada
- Luxor Sheraton Hotel, Luxor
- Proposed Hotel, Luxor
- Fayrouz Village Hotel, Sharm El Sheikh, Sinai
- Coral Village Hotel, Nuweiba, Sinai
- Hotel - Proposed, Dahab, Sinai
- Hotel - Proposed, St. Catherine, Sinai
Greece
- Athens Hilton & Proposed Hotel, Athens
- Caravel Hotel, Athens
- Proposed Sargani Hotel & Bungalows, Halkidiki
- Rhodes Hotel -Proposed, Rhodes
Israel
- Proposed Inter-Continental Hotel, Tel Aviv
Lebanon
- Hotel Market Review, Beruit
Morocco
- El Minzah Hotel, Tangier
Nigeria
- Proposed Sheraton Hotel, Port Harcourt
Saudi Arabia
- Proposed Jeddah Corniche Project, Jeddah
Tunisia
- Proposed Hotel, Hammamet
Turkey
- Hotel Conrad, Istanbul
Latin America and the Caribbean
Bahamas
- Eleuthera Joint Venture, Eleuthera
- Cape Eleuthera Island Hotel, Eleuthera Island
- Eleuthera Joint Venture, Eleuthra
- The Montague, Nassau
- Paradise Island Hotel, Paradise Island
- Resorts Int'l Hotel and Casino, Paradise Island
Belize
- Journey's End Caribbean Club, Abergris Caye
Bermuda
- Sonesta Hotel, Bermuda
Brazil
- Quatro Rodas Hotel, Recife
Colombia
- Charleston Hotel - Proposed, Barranquilla
- Bella Suiza Hotel, Bogota
- Hotel & Convention Center -Proposed, Cali
- Cartagena Hilton, Cartagena
- El Faro de Cartagena Resort Propose, Cartagena
- Proposed Indian Sea and Sun Resort, Cartagena
- Hotel De Isleno, San Andres Isla
- Santamar Hotel, Santa Marta
Curacao
- Ramada Renaissance Hotel and Casino,
Honduras
- Inn Of The Sun, Guanaja
Jamaica
- Holiday Inn-Rose Hall, Montego Bay
- Americana Eden II, Ocho Rios
Mexico
- Posadas de Mexico Hotels,
- Americana Condesa Del Mar, Acapulco
- Americana El Presidente Hotel, Acapulco
- Resort-Proposed, Cabo San Lucas
- Palacio Del Margus, Chiconcuac
- Omni Hotel, Ixtapa
- Fiesta Inn-Proposed, Leon
- Karmina Place, Manzanillo
- Hotel - Proposed, Mexico City
- La Jolla de Mismaloya, Puerta Vallarta
Netherland Antilles
- Divi Divi Beach Resort, Aruba
- Divi Tamarijn Beach Resort, Aruba
- Golden Anchor, Bonaire
- Resort Hotel-Proposed, Bonaire
- Ramada Renaissance Hotel and Casino, Curacao
- Cupecoy Beach Club Hotel, St. Maarten
- Dawn Beach Hotel, St. Maarten
- Dawn Beach Resort, St. Maarten
- Mullet Bay Resort, St. Maarten
- Oyster Pond Hotel, St. Maarten
Puerto Rico
- Hyatt Dorado Beach Hotel, Dorado
- Hyatt Regency Cerromar Hotel, Dorado
- Hotel - Proposed, Fajardo
- Hotel Puerto Rico, Fajardo
- Westin Resort-Proposed, Palmer
- Marriott Resort & Casino-Proposed, Puerto Rico
- Carib Inn, San Juan
- Dupont Plaza, San Juan
- El San Juan Hotel and Casino, San Juan
- Howard Johnson Hotel, San Juan
- Marriott - Proposed, San Juan
- Marriott Update - Proposed, San Juan
- Sands Hotel and Casino, San Juan
Virgin Islands
- Caneel Bay, St. Croix
- Carambola Beach Resort, St. Croix
- Hotel - Proposed, St. Croix
- St. Croix Development, St. Croix
- Caneel Bay, St. John
- Pineapple Beach Hotel, St. Thomas
- Sugar Bay Plantation, St. Thomas
- Virgin Grand Hotel, St. Thomas
- Virgin Isle Hotel, St. Thomas
- Little Dix Bay, Virgin Borda
Eastern Europe
Croatia
- Two Hotels, Dubrovnik
Czech Republic
- Voronesh Hotel Complex, Brno
- Proposed Four Seasons Hotel, Prague
Hungary
- Proposed Resort Hotel, Babolna
- Duna Inter-Continental, Budapest
Latvia
- Daugava Hotel-Proposed, Riga
- Proposed Hotel, Riga
Poland
- Holiday Inn, Krakow
- Marriott Hotel - Proposed, Poznan
- Proposed Hotel, Poznan
- Radisson Hotel, Szczecin
- Bristol Hotel, Warsaw
- Holiday Inn, Warsaw
- Orbis Joint Venture, Warsaw
- Proposed Hotel, Warsaw
- Sheraton Hotel - Proposed, Warsaw
- Zakopane Resort Complex, Zakopane
Russia
- Kamiennyi Most Hotel & Business, Moscow
- Savoy Hotel, Moscow
Asia
Korea
- Ultrapolis 3000, Seoul
Malaysia
- UP 3000 Hotel-Proposed, Selangor
Singapore
- Resort Hotels - Proposed,
- Ultrapolis 3000, Singapore
West Indies
- Proposed Blue Lagoon Resort, St. Martin
<PAGE>
Hospitality Valuation Services Mineola, New York
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
================================================================================
Hospitality Valuation Services
Industry Leader
Hospitality Valuation Services (HVS) was created in 1980 to satisfy the
ever-increasing demand for reliable and well-documented hotel/motel valuations,
market studies, and feasibility reports. As the nation's leading real estate
appraisal organization devoted exclusively to lodging properties, HVS offers
owners, investors, and lenders in-depth valuation and market research expertise.
Our professional staff, operating on a worldwide basis with offices in New York,
San Francisco, Miami, Boulder, Vancouver, and London, has appraised more than
4,000 hotels and motels in every state and over 32 foreign countries. Each
member of Hospitality Valuation Services is well versed in lodging operations.
Most have college degrees in hotel administration as well as actual on-the-job
hotel experience. Coupled with intense training in real estate appraisal theory
and techniques, we are highly qualified to handle the unique characteristics of
hostelry valuations.
Excellence Through Specialization
An important feature of our valuation and feasibility services is
specialization. Daily exposure on a global basis to a wide variety of hotel
transactions and operating statistics, along with actual buyers and sellers,
provides the data to thoroughly document our reports.
HVS maintains the industry's largest database of hotel valuation information:
o Data on over 4,000 hotel transactions;
o Over 3,500 actual financial statements;
o Thousands of management contracts, franchise agreements, mortgages,
leases, and other similar documents;
o Personal contacts at every major hotel company;
o Names and addresses of over 10,000 hotel owners, investors, lenders,
and operators.
<PAGE>
Hospitality Valuation Services Mineola, New York
- --------------------------------------------------------------------------------
=============
HVS
- -------------
International
=============
Innovative research in hotel valuation techniques is set forth in the textbooks
we authored for the Appraisal Institute, entitled The Computerized Income
Approach to Hotel/Motel Market Studies and Valuations and Hotels and Motels: A
Guide to Market Analysis, Investment Analysis, and Valuations. These
publications, along with more than 300 articles, are recognized as the
authoritative standard for valuing lodging facilities and performing market
feasibility studies. In addition, we have developed Hospitality Valuation
Software, a computerized package that assists appraisers and consultants in
evaluating market trends and preparing financial forecasts.
Full-Service Hotel Consulting
With a reputation established by providing highly detailed hotel valuations that
are accepted and relied upon by virtually every major hotel owner, lender, and
operator, HVS has branched out to offer a full range of consulting services.
o HVS Consulting Services: Valuations, market feasibility studies,
economic studies, management contract and franchise negotiations,
development assistance, and expert testimony.
o HVS Executive Search: Recruitment and placement of top-level hotel
management personnel.
o HVS Eco Services: Environmental audits and assistance in
implementing programs including water and energy management,
recycling, and green product selection. Provides ECOTEL
certifications to environmentally sensitive hotels.
o HVS Gaming Services: Specialized market, valuation, and consulting
services for casinos and other types of gaming activities.
o HEI Hotels: Hotel ownership and management.
Long-Term Relationship
Hospitality Valuation Services is in business for the long-term. We are
dedicated to providing our clients with the highest quality consulting services.
Should you require assistance in any areas covered by our expertise, please
contact any member of our team at (516) 248-8828.
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
==========================================================
APPRAISAL OF REAL PROPERTY
605 Third Avenue
New York, New York
==========================================================
IN A SELF-CONTAINED REPORT
As of August 1, 1997
Prepared For:
Morgan Stanley Realty, Inc.
1585 Broadway
New York, New York
Prepared By:
Cushman & Wakefield, Inc.
Valuation Advisory Services
51 West 52nd Street, 9th Floor
New York, NY 10019
<PAGE>
Cushman & Wakefield, Inc. CUSHMAN &
51 West 52nd Street WAKEFIELD(R)
New York, NY 10019-6178
(212) 841-7500 Improving your place
in the world
July 30, 1997
Mr. Shirish B. Godbole
Vice President
Morgan Stanley Realty, Inc.
1585 Broadway
New York, New York
Re: Appraisal of Real Property
605 Third Avenue
New York, New York
Dear Mr. Godbole:
In fulfillment of our agreement as outlined in the Letter of Engagement,
Cushman & Wakefield, Inc. is pleased to transmit our self-contained appraisal
report estimating the market value of the leased fee interest in the referenced
real property on an "as is" basis.
As specified in the Letter of Engagement, the value opinion reported below
is qualified by certain assumptions, limiting conditions, certifications, and
definitions, which are set forth in the report.
This report was prepared for Morgan Stanley Realty, Inc. (client) and it
is intended only for the specified use of the client. It may be not be
distributed to or relied upon by other persons or entities without written
permission of the appraiser.
The appraisal report has been prepared in accordance with our
interpretation of your institution's guidelines, Title 11 of the Financial
Institution's Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the
Uniform Standards of Professional Practice, including the Competency Provision.
The property was inspected by and the report was prepared by Travis W.
Walsh, MAI, CRE.
<PAGE>
Cushman & Wakefield, Inc.
Mr. Shirish B. Godbole
Morgan Stanley Realty, Inc. Page 2 July 30, 1997
As a result of our analysis, it is our opinion that the market value of
the leased fee estate in the subject property, subject to the assumptions,
limiting conditions, certifications, and definitions, as of August 1, 1997, is:
ONE HUNDRED EIGHTY MILLION DOLLARS
$180,000,000.
Respectfully submitted,
Cushman & Wakefield, Inc.
/s/Travis W. Walsh
Travis W. Walsh, MAI, CRE
Director
Valuation Advisory Services
State Certified Appraiser No. 46000005074
TWW:mls
<PAGE>
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
================================================================================
Location: 605 Third Avenue
New York, New York
Assessor's Parcel Number: Block 920, Lot 12
Interest Appraised: Leased Fee Estate
Date of Value: August 1, 1997
Date of Inspection: July 30, 1997
Ownership
Leased Fee Estate: Fisher 40th and 3rd Company and
Hawaiian Realty, Inc.
Land Area: 71,210+/- square feet
Zoning: C5-3 and C1-9, General Central
Commercial District
Highest and Best Use
If Vacant: Eventual development as an office
building, consisting of large floor
plates catering to Class A office
users.
As Improved: Existing use as a multi-tenanted
office building containing office
space on the upper floors with retail
space on the ground level and a
parking garage.
Improvements
Type: 43-story multi-tenanted Class A office
building.
Year Built: 1963
Type of Construction: Structural steel, concrete and glass
Size
Total Rentable Area: 984,447+/- square feet
Condition: Excellent
Operating Data and Forecasts
Current Occupancy: 98.1+/-%
Forecasted Stabilized Occupancy: 96+/-%
Value Indicators
Sales Comparison Approach: $180,000,000
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Summary of Salient Facts and Conclusions
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Income Approach
Discounted Cash Flow Income Growth
Rate: 4% per annum
Tax Growth Rate: 2-1/2% per annum
Expense Growth Rate: 4% per annum
Tenant Improvements
Vacant Space/New Leases: $40 per square foot increasing at 4%
per year
$40 per square foot increasing at 4%
per year
Renewal Tenants: 2000 and thereafter - $20 per square
foot increasing at 4% per year
commencing 1997.
Vacancy Between Tenancies: 6 months weighted for renewal
probability
Renewal Probability: 50%
Terminal Overall Rate: 8.5% to 9.0%
Cost of Sale at Reversion: 4%
Discount Rate: 11.0% to 11.5%
Indicated Value
Discounted Cash Flow Analysis: $180,000,000
Value Conclusion
As Is: $180,000,000
Estimated Marketing Time: Less than 12 months
Special Assumptions: Please refer to the complete list of
Assumptions and Limiting Conditions
included at the end of this report.
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PHOTOGRAPHS
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605 Third Avenue looking southeast on Third Avenue.
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Photographs of Subject Property
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605 Third Avenue looking northeast on Third Avenue.
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Photographs of Subject Property
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Looking south on Third Avenue.
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Looking north on Third Avenue.
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Photographs of Subject Property
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Looking east on East 39th Street.
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Looking west on East 39th Street.
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Photographs of Subject Property
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Looking east on East 40th Street.
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Looking west on East 40th Street.
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Photographs of Subject Property
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Parking garage from East 39th Street.
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Parking garage from East 40th Street.
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Photographs of Subject Property
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Looking north on the Midtown Tunnel access road.
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Looking south on the Midtown Tunnel access road.
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Photographs
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Lobby of 605 Third Avenue.
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Photographs
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View looking northeast from the roof.
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View looking northwest from the roof.
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Photographs
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View looking east from the roof.
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View looking south from the roof.
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TABLE OF CONTENTS
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Page
INTRODUCTION .............................................................. 1
Identification of Property .......................................... 1
Property Ownership and Recent History ............................... 1
Purpose and Intended Use of the Appraisal ........................... 1
Extent of the Appraisal Process ..................................... 1
Date of Value and Property Inspection ............................... 2
Property Rights Appraised ........................................... 2
Definitions of Value, Interest Appraised, and Other Pertinent Terms . 2
Legal Description ................................................... 3
NEW YORK REGIONAL ANALYSIS ................................................ 4
MIDTOWN MANHATTAN OFFICE MARKET ANALYSIS .................................. 12
NEIGHBORHOOD ANALYSIS ..................................................... 29
PROPERTY DESCRIPTION ...................................................... 49
Site Description .................................................... 49
Improvements Description ............................................ 50
REAL PROPERTY TAXES AND ASSESSMENTS ....................................... 54
ZONING .................................................................... 57
HIGHEST AND BEST USE ...................................................... 58
VALUATION PROCESS ......................................................... 60
SALES COMPARISON APPROACH ................................................. 61
INCOME CAPITALIZATION APPROACH ............................................ 64
RECONCILIATION AND FINAL VALUE ESTIMATE ................................... 85
ASSUMPTIONS AND LIMITING CONDITIONS ....................................... 87
CERTIFICATION OF APPRAISAL ................................................ 89
ADDENDA ................................................................... 90
Improved Property Sales
Prime Tenant Rent Roll
Appraisers' Qualifications
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INTRODUCTION
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Identification of Property
The subject property consists of a 43-story, Class A office structure with
a detached garage, located on the easterly blockfront of Third Avenue between
East 39th Street and East 40th Street in Midtown Manhattan. The property is
known by the street address 605 Third Avenue, New York, New York. The property
is identified on the Tax Map of the City of New York as Lot 12, Block 920.
Property Ownership and Recent History
The leased fee estate in the property is owned by Fisher 40th and 3rd
Company and Hawaiian Realty, Inc. There have been no transfers of ownership
involving this property within the last five years.
Purpose and Intended Use of the Appraisal
The purpose of the appraisal is to estimate the market value of the leased
fee estate in the property, in its "as is" condition, based upon prevailing
market conditions, as of August 1, 1997. The function of this appraisal is its
use by Fisher Brothers in conjunction with a mortgage financing of the property.
Extent of the Appraisal Process
In the process of preparing this appraisal, we:
o Inspected the exterior of the building, the site improvements and a
representative sample of tenant spaces.
o Interviewed a representative of the property management company.
o Reviewed leasing policy, concessions, tenant build-out allowances
and history of rental rates and occupancy with the building manager
and leasing personnel.
o Reviewed a detailed history of income and expenses and a budget
forecast for 1997, including the budget for planned capital
expenditures and repairs.
o Conducted market research of occupancies, asking rents, concessions
and operating expenses at competing buildings, including interviews
with on-site managers and a review of our own data base from
previous appraisal files.
o Prepared an estimate of stabilized income and expense (for
capitalization purposes).
o Conducted market inquiries into recent sales of similar buildings to
ascertain sales price per square foot, effective gross income
multipliers and capitalization rates. This process involved
telephone interviews with sellers, buyers and/or participating
brokers. (See detailed sales write-ups in Addenda for more complete
information on the verification process.)
o Prepared Sales Comparison and Income Approaches to value.
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Date of Value and Property Inspection
The date of value is August 1, 1997. Our most recent inspection of the
property was July 20, 1997.
Property Rights Appraised
Leased fee estate.
Definitions of Value, Interest Appraised, and Other Pertinent Terms
The definition of market value taken from the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation, is as follows:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and
seller, each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what
they consider their own best interests;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.
Exposure Time
Under Paragraph 3 of the Definition of Market Value, the value estimate
presumes that "A reasonable time is allowed for exposure in the open
market". Exposure time is defined as the estimated length of time the
property interest being appraised would have been offered on the market
prior to the hypothetical consummation of a sale at the market value on
the effective date of the appraisal. Exposure time is presumed to precede
the effective date of the appraisal.
The following definitions of pertinent terms are taken from the Dictionary
of Real Estate Appraisal, Third Edition (1993), published by the Appraisal
Institute.
Leased Fee Estate
An ownership interest held by a landlord with the rights of use and
occupancy conveyed by lease to others. The rights of the lessor (the
leased fee owner) and the leased fee are specified by contract terms
contained within the lease.
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The following definitions are taken from various sources:
Market Value As Is on Appraisal Date
Value of the property appraised in the condition observed upon inspection
and as it physically and legally exists without hypothetical conditions,
assumptions, or qualifications on the effective date of appraisal.
Legal Description
We have not been provided with a metes and bounds legal description for
the property and therefore, have not included one within this report. The
property is legally identified on the Tax Map of the City of New York as Block
920, Lot 12.
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Regional Map
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NEW YORK REGIONAL ANALYSIS
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Area Overview
The New York metropolitan area, centered in New York City, is the nation's
center for finance, the arts, media, fashion, telecommunications and corporate
headquarters. The region generally encompasses 20 counties in three states,
extending for a radius of approximately 50 miles from New York City. Included in
this area are: New York City's five boroughs of Manhattan, Brooklyn, Queens,
Bronx and Staten Island; the New York State counties of Nassau, Suffolk,
Westchester, Rockland, Orange and Putnam; the northern New Jersey counties of
Bergen, Essex, Hudson, Union, Middlesex, Passaic, Somerset and Morris; and the
southern Connecticut county of Fairfield.
Population Trends
The New York area is the largest metropolitan area in the country in terms
of population. The following chart provides population growth for the
metropolitan area between 1980 and 1990, estimated figures for 1996 and
projected population statistics for the year 2001.
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New York Metropolitan Area Population
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% Increase % Increase
1980 1990 % Increase 1996 1990-1996 2001 1996-2001
County Census Census 1980-1990 Estimated (Est.) Projection (Projected)
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<S> <C> <C> <C> <C> <C> <C> <C>
New York City 7,071,641 7,322,564 3.5% 7,382,450 0.82% 7,466,689 1.14%
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NYS (Nassau/
Suffolk/Westchester/
Rockland/Orange/
Putnam) 4,068,738 4,141,141 1.8% 4,255,711 2.77% 4,313,220 1.53%
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New Jersey
Counties 4,411,992 4,436,976 0.57% 4,497,693 1.37% 4,434,801 -1.40%
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Connecticut
Fairfield 807,143 827,645 2.5% 834,637 0.84% 845,931 1.35%
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TOTAL 16,359,512 16,728,326 2.3% 16,970,491 1.76% 17,060,641 0.53%
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Source: Equifax National Decision Systems
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</TABLE>
Transportation
Metropolitan New York is served by the most diverse transportation system
in the United States. The region's transportation network links the area to
regional, national and global commerce and trade. A brief synopsis of the
region's transportation system follows below.
Rail System
o NYC Subway system: 710-mile subway line servicing 3.5 million
passengers a day.
o Metro North: Based in the landmark Grand Central Terminal in Midtown
Manhattan, train lines span Westchester and Putnam counties in New
York and Fairfield County, Connecticut to an 80-mile radius. Over
100,000 passengers use this system daily.
o Long Island Railroad: Commuter line to Pennsylvania Station in
Manhattan and to Atlantic Terminal in Brooklyn servicing over
270,000 commuters daily. Improvements are scheduled for the next few
years, including the addition of 24 new "dual mode" locomotive
engines that allow trains to switch between
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diesel and electric power while en route so that passengers will no
longer have to switch trains when the tracks change. In addition,
over 120 new rail cars will be added to the fleet and 13 additional
stations are to be equipped with automatic ticket vending machines.
o (PATH) - Port Authority Trans-Hudson subway system: Services nearly
200,000 commuters daily from Newark and Hoboken to Manhattan.
o New Jersey Transit-rail: Train service for commuters in the northern
part of the state to either Hoboken, New Jersey or Pennsylvania
Station in Manhattan. Plans are currently underway for a 20.5-mile
technologically advanced light rail system from Bayonne to Hoboken,
ultimately extending to Ridgefield, which will make a great
improvement in transportation in Hudson County. Construction of the
first phase (between Bayonne and Hoboken) is scheduled to begin
shortly, with completion expected by the year 2000.
Bus System
o New York City Transit: Regularly scheduled bus service in New York
City's five boroughs handles over one million riders daily.
o Port Authority Bus Terminal: Regional bus lines servicing an average
of 175,000 passengers daily, with most service to and from New
Jersey.
Airports
o The region contains three major commercial airports: Newark,
LaGuardia and Kennedy International (JFK). Newark Airport, in New
Jersey, recently opened a new international terminal, doubling the
airport's ability to process international passengers. A $350
million monorail system, connecting the three passenger terminals to
the airport's long-term parking lots, opened last spring. Plans are
being made to extend the monorail to nearby Amtrak and New Jersey
Transit rail stations. At JFK Airport in Queens, a $1.1 billion
redevelopment project to expand and improve its international
arrivals and customs facilities is expected to begin during 1997.
Construction of a light rail system providing passengers with a link
between terminals as well as connections from the airport to the New
York City subway system and the Long Island Rail Road will be
scheduled in phases to minimize disruptions at the airport. A $549
million roadway/utility renewal effort and a $63 million air traffic
control tower will also greatly improve conditions for travelers.
Major improvements at LaGuardia Airport include a new passenger
terminal and improved roadways to expedite traffic flow into and out
of the airport. Renovation work continues in the main terminal and a
new retail and food court is being built.
Ferries
o Regularly scheduled service runs from Staten Island, Brooklyn and
several New Jersey cities to Downtown and Midtown Manhattan.
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Regional Economic and Employment Trends
The New York metropolitan region saw a net increase of nearly 48,000 new
jobs in the last 12-month period ending October 1996, the highest increase so
far this decade. Northern New Jersey's employment outlook also improved, though
slightly, with a gain of 9,800 new jobs.
Outlined below are the most current employment statistics available by
industry.
o The service industry experienced 94 percent of the area's overall
job growth, the largest gain in employment during the last twelve
months. The New York area netted 35,300 new jobs, Long Island
expanded by approximately 10,000, and New Jersey increased its
service sector jobs by 15,000.
o The second-largest employment increase in the New York region
occurred in the retail trade, with over 11,000 new jobs in New York
City, boosted by the surge of retail and entertainment projects. In
particular, the Midtown Manhattan area has been transformed by a
plethora of retailers, such as Kmart, Tower Records, Barnes & Noble,
The Gap, Pottery Barn, the Disney Store, Nike town and Reebok Sports
Club. Madison Avenue, one of the most desirable and expensive retail
locales in the world, recently opened its doors to highly
sought-after designers such as Calvin Klein, Valentino and Giorgio
Armani. On Long Island, 6,600 retailing jobs were created. Retail
also accounted for the second-largest employment gain in New Jersey,
adding 4,200 new jobs.
o New York's construction industry added 2,000 new jobs, making it the
third largest net gain employment category. On Long Island,
construction jobs increased by 300. With a number of major
renovations and new retail projects coming on-line on Long Island,
construction activity should continue on the upswing.
o During this period, wholesale trade added 1,900 jobs in the New York
region and the transportation sector increased by 1,800 new jobs in
the City and 900 on Long Island. New Jersey suffered in both areas,
declining 1,200 jobs in transportation and losing 600 in the
wholesale trade industry.
o The FIRE (finance, insurance and real estate) sector accounts for
the third largest group of the New York region's workforce -- 13
percent -- which greatly exceeds the national average of 5.8
percent. Considering this, FIRE's loss of 1,900 jobs, considered
minor, is a significant improvement over the last few years, when
the brunt of corporate downsizing, mergers and consolidations took
its toll within the sector's workforce.
o The two sectors that suffered the largest losses in employment in
the metropolitan area were in the public sector. There was a
reduction of approximately 12,000 government jobs. In manufacturing,
there were losses of 5,900 workers in New York, 3,600 jobs on Long
Island and 5,600 unemployed in Northern New Jersey.
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Lucrative incentive packages in the form of city and state tax breaks and
attractive leasing packages have been successful in enticing many large
corporations into staying in the region as well as attracting businesses seeking
locations elsewhere. The New York Cotton Exchange, as well as the Coffee, Sugar
& Cocoa Exchange will keep its 5,300 employees in New York City at a new
facility, encouraged by a reported $99 million tax incentive package, among
other municipal-backed financial incentives. Paine Webber, with its 2,650
employees, will maintain its world headquarters at 1285 Avenue of the Americas
in Midtown Manhattan through the year 2015, attributed to an attractive lease
deal and a series of tax incentives, sales tax exemptions and energy savings. In
a deal that marks a first time return to New York after moving out of state,
Nine West will relocate to White Plains, bringing with it 1,400 jobs, with an
expected addition of 500 jobs during the course of its 25-year lease. They will
occupy a 377,000+/- square foot building that was previously the home of NYNEX.
The Nine West deal was assisted by a $7.8 million package of tax incentives,
grants and electricity savings.
In October 1996, New York City Mayor Rudolph Giuliani introduced a series
of tax incentives and other benefits to attract tenants and developers to move
to certain areas of Downtown Manhattan. American International Group (AIG) will
take advantage of that, keeping its headquarters and over 5,100 employees at 175
Water Street, an office tower which the company recently purchased. AIG also
expects to add almost 1,900 new jobs as a result of growth and consolidation of
other leased properties outside the city.
Other encouraging corporate news items include MasterCard, which moved
into its new corporate headquarters in Purchase, New York. IBM is planning to
consolidate to a new state-of-the-art headquarters facility adjacent to their
existing building in Armonk, New York. Ciba-Geigy has relocated its corporate
headquarters, along with 1,200 employees, to the Tarrytown Corporate Center, and
is constructing a new $40 million laboratory, scheduled for occupancy in 1997.
Symbol Technologies Inc., employing 2,500 on Long Island, recently relocated to
its new corporate headquarters, encompassing 48+/- acres in Holtsville.
Unemployment
Unemployment rates have continued to decline nationally and regionally
over the past few years. The latest year-end statistics available from the
Department of Labor, published in December, include figures as of October 1996.
The unemployment rate for the New York region (including New York City, Putnam,
Rockland and Westchester) as of October 1996 was 7.6 percent, as opposed to 7.7
percent twelve months earlier. Similarly, Long Island's October 1996 figure fell
to 3.7 percent from 4.8 percent the prior year.
In New Jersey, the unemployment rates as of September 1996 show 6.0
percent, compared to 6.3 percent the year before. Economists explain that
unemployment rates change at a slower rate than other economic indicators and,
therefore, may not accurately reflect recent shifts in the job market.
Employment figures provide a more accurate reflection of economic performance in
the region.
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Real Estate Markets
o Office Markets
Strong leasing performance in the Midtown, Midtown South and Downtown
Manhattan Class A office markets has resulted in a shrinking supply of premium
space. The Long Island markets have shown improvement with lowered vacancy
rates. In Northern New Jersey, leasing of Class A space has also been notable.
Midtown Manhattan exhibits the lowest Class A vacancy rate in the region between
10 and 14 percent, and the Downtown, Long Island, and New Jersey markets all
report Class A vacancy rates at their lowest points for the year, between 10 and
15 percent. However, Westchester vacancy rates increased, due to fact that more
space was vacated than occupied in 1996, and the region is striving to recover
from the wave of corporate consolidations and reorganizations that began in
1995. With vacancy rates of prime space falling, the focus has changed to
construction to meet the demand for suitable space.
Times Square will be the site of one of the first new office developments
in the Midtown area. Located at the northeast corner of Broadway between West
42nd and 43rd streets, 4 Times Square, a 1.6+/- million square foot office and
retail project, broke ground in August 1996. The Durst Organization acquired the
western portion of the same city block which they have a majority ownership. A
scheduled completion date of 1999 is expected. Another site that is generating a
great deal of interest from prominent developers is the New York Coliseum site
at Columbus Circle. Among the bids submitted are plans for a mixed used
development with office space, a large retail component, residential apartments
condominiums and hotel rooms. The governmental agencies requesting the bids
received nine proposals and four finalists are to be announced in April 1997.
There are several projects in the preliminary planning stages on Long
Island, including developer Edward J. Minskoff's proposal for a 200,000 square
foot office building at the site of the former Roosevelt Raceway, where he also
plans a separate 350,000 square foot office building. Anchor tenants have been
secured for both buildings. Also slated for development are Brookhaven Town
Center and Parr Yaphank, with a potential of 3+/- million additional square feet
of new office development. In Jersey City's Waterfront district, the Newport
Office Center III will contribute 750,000 square feet of new office space, with
developers planning to complete construction within 2 years after securing 25
percent of the space through pre-leasing.
o Retail Markets
Retailing activity has skyrocketed in both new and expansion projects due
to the region's rebounding economy. The New York City area, traditionally served
by large department stores and small boutiques, is presently experiencing a
different kind of retail experience connected to the multi-media and
entertainment fields. Revitalizing projects in the Times Square area, such as
Disney's renovation of the New Amsterdam theater, David Copperfield's
magic-theme restaurant, the Official All Star Cafe, Sony's State Theatre, and E
Walk, an entertainment complex developed in part by Tishman Broadway Corp., has
made the area attractive for continued development. Additionally, large
retailers such as Kmart, Barnes & Noble, and a new Gap chain, Old Navy Clothing
Co. have expanded into Manhattan with one or two signature stores so as to not
overextend themselves or saturating the market. The Warner Brothers Studio
Store, originally opened in October 1993 on the corner of Fifth Avenue and 57th
Street, recently expanded to nine stories, adding 75,000 square feet retail
space to include interactive
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games, a cafe and a 74-seat screening room to feature computer generated 3-D
cartoons featuring the well-known Warner Brothers characters. Warner Brothers
more recently leased the 1 Times Square building and is to open a second
Manhattan studio store on West 42nd Street and Broadway. Luxury retailers also
made news, with Chanel moving a few doors away to a completely renovated site
with a 99-year lease. Other upscale designers, such as the aforementioned Calvin
Klein, Valentino and Giorgio Armani, also opened new retail spaces. Next to
Chanel on East 57th Street, Louis Vuitton, the French luxury leather goods
designer, is building a 23-story tower, two floors for their retail business and
the upper floors designated to the company's corporate offices. Elizabeth Arden
and Red Door Salons Inc., slated for extensive renovations and expansion, will
close this month and reopen in April of 1997.
Long Island is renovating and expanding many of its retail centers, such
as the Walt Whitman Mall in Huntington, the South Shore Mall in Islip, the
Tanger Outlet center in Riverhead and the Bellport Outlet Center. Roosevelt
Field mall will be adding a Nordstrom's to the second level expansion project
and completion is expected by the fall of 1997. In Westbury, a two-level mall
expansion project, The Source, will add 525,000 square feet to the existing site
and is scheduled to be completed in the summer of 1997. The Source will feature
a number of big-name, large-draw retailers such as Fortunoff (the project's
joint venture partner), Nordstrom Rack, Old Navy, Saks Off Fifth, Loehmann's,
The Disney Store, Bertolini's Restaurant and Virgin Megastore. In addition, a
number of new retail developments over 100,000 square feet are being proposed,
among them the Brookhaven Town Center in Yaphank, which ultimately may include a
significant amount of office space as well.
In Westchester, renovations are underway at the Westchester Mall, which
will double in size to 766,000 square feet and be renamed the Cortland Town
Center. It will feature commanding retailers such as Home Depot, Barnes & Noble,
United Artists Theater, and an A&P Superstore. About 80 percent of the space has
been pre-leased and completion is scheduled for 1999. Just over the Westchester
border in West Nyack, Pyramid Companies has commenced construction of Palisades
Center, a 1.85 million square foot power mall, due to open late 1997. It will be
host to anchor stores such as JC Penney, Lord & Taylor, Filene's Basement and
BJ's Wholesale Club. Other headlining retailers lined up so far include Home
Depot, The Wiz, Target, Sony Multiplex Theatre and Burlington Coat Factory.
o Residential Markets
The New York City residential markets have exhibited a strong recovery
from the past recession. Over the past few years in Manhattan, vacancy rates
have been at the lowest point in years (from 3.4 percent to as low as 1+/-
percent, according to some sources), despite rising supply and market rents.
This factor has, in turn, stimulated the outer borough markets, as many renters
seek relief from the tight Manhattan market and turn to Brooklyn and Queens as
alternatives. Other potential renters have chosen to buy apartments, some more
affordably priced than in the past, boosting the lagging sales of co-ops and
condominiums.
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Overall vacancy figures for Northern New Jersey, currently between 4
percent and 5 percent, can vary between submarkets, due to the fact that the
region contains some of the most impoverished areas along with some of the most
affluent neighborhoods in the nation. The Long Island residential market has
shown some improvement, but along with Northern New Jersey, restrictive zoning
and rent control ordinances hinder multifamily development and allow for only
modest improvements in the existing markets. Legislation proposed to eliminate
rent control may alter the development scene dramatically.
New residential construction in the New York region is showing great
promise for the near future and is a reflection of increased momentum of the
region's economy. In New York City, there are ten or more projects that are at
or near completion, which should serve to ease the demand for rental and
condominium units for tenants, including low and middle-income families.
In Westchester County, Avalon Gardens, a 500-unit project, should be ready
for occupancy by late 1998. On Long Island, Avalon is building 300 apartments in
Smithtown, which should also be completed by the end of 1998. In Huntington, a
complex is in the planning stages for a continuous care facility that would
include 1,000 apartments, townhouses and detached homes for senior citizens, as
well as another 250-unit senior housing project.
o Hotel Markets
The region's hotel market is currently in the midst of a dramatic recovery
from a period of economic recession. The supply of hotel rooms in New York has
changed over the past few years, as many older sites are being replaced by more
modern facilities. In some cases, hotels such as the St. Regis Hotel, the
Sheraton New York and the Sheraton Manhattan, along with the Omni Berkshire have
been completely renovated, with more accommodating guestrooms and facilities
designed to pamper the occupants with more upscale amenities. The demand for
hotel space is on the rise and is expected to continue in the near future. This
trend is supported by the number of new and proposed hotel developments
currently in the planning stages, under construction or near completion.
The Downtown area of SoHo is the site of two new hotels and another under
proposal. The first hotel to open in this resurgent area, the 367-room SoHo
Grand Hotel, was completed in the summer of 1996 and has already made a
favorable impression among models, artists and actors. The 73-room Mercer Hotel
is currently under construction and has signed a major retailer, J. Crew, to
their attractive ground floor space. Developer Hank Sopher has proposed the
160-room SoHo Gateway, which will reportedly cost $25+/- million and is still in
the planning stages.
The first new hotel to be constructed in the successfully revitalized
Downtown Brooklyn area is finally underway. Developer Josh Muss' Renaissance
Plaza, a 31-story hotel/office complex will encompass a 7-story, 384-room
Marriott Hotel. The project broke ground in late 1996 and is expected to be
completed between 1998 and 1999. The latest new hotel proposal in the Times
Square area is a plan by Milstein Properties to build a 500,000 square foot
hotel and retail complex on the parking lot located at West 42nd Street and
Eighth Avenue, across the street from the Tishman development. The Milsteins
have owned the property for 15 years, and have been waiting for the right
incentive package from the city and state to catalyze the project.
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<PAGE>
New York Regional Analysis
================================================================================
At the New York Coliseum site on Columbus Circle, many accepted proposals
from the nine prominent development teams include plans for a hotel component.
Another project, targeted at budget-conscious business travelers, is a $50
million plan to build a 300-room Courtyard by Marriott hotel on the top floors
of 866 Third Avenue. Construction is scheduled to commence Mid-year 1997 and
should be completed in approximately one year.
On Long Island, Edward J. Minskoff is proposing two hotel projects at the
former Roosevelt Raceway property in Westbury. The first hotel would be a
170-room economy rate project, and the second a 130 suite room project to be
built on the former racetrack's grandstand site. Construction is to begin
Mid-year 1997 and should take about two years to complete. Another significant
proposal is the plan for a 200-room hotel in Jersey City, along the Hudson River
waterfront area. The hotel will be a part of the Hudson Exchange mixed-use
project and will be located next to the Newport Mall and accessible to the
planned light rail system in Hudson County. The hotel will be a vital link to
the area's development as a viable business district and will certainly be a
factor in its future growth.
Conclusion
The downward pattern within the New York region in the past few years has
made a significant turnaround which, boosted by a stable economy and a strong
performance by Wall Street, has prompted some economists to predict that
conditions should remain favorable through at least the third quarter of 1997.
According to Crain's New York Business, inflation in the region has been below
the national average for the last six out of seven months. The latest employment
figures are a powerful indication of the strength of the region's economy.
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<PAGE>
MIDTOWN MANHATTAN OFFICE MARKET ANALYSIS
================================================================================
Manhattan Overview
Manhattan contains over 350 million square feet of Class A, B and C office
space and is, by a very wide margin, the largest market in the United States.
The Manhattan office market is actually composed of three markets: Midtown,
Midtown South and Downtown. The Midtown market, which is identified as that area
north of 32nd Street, is widely diversified among legal services, financial
institutions, insurance companies, media companies, advertising agencies and
accounting firms, among others. The Midtown South market is identified as that
area north of Canal Street and south of 32nd Street and is dominated by Class B
and C buildings which are generally occupied by local service firms, back office
divisions of large companies and front offices for local manufacturers. The
Downtown market, identified as that area south of Canal Street to the Battery,
is linked significantly to financial services, Wall Street firms and New York
City government.
During the 1980s the Midtown Manhattan office market experienced
unprecedented growth in leasing activity, new construction and rental rates. The
Midtown market softened in the early 1990s as new supply entered the market in
response to the increased demand of the mid-1980s, rising rental rates and New
York City office development incentives. The oversupply of Midtown office space,
in conjunction with the past recession, created soft market conditions that
persisted well after most of the country had begun its ascent from the past
economic downturn.
The future shows a more balanced outlook for the Midtown office market.
New construction had virtually come to a standstill, which allowed demand to
catch up with existing supply and vacancy rates to decline. The New York City
region has emerged from the past recession and lenders have begun to provide new
financing of well-occupied and stabilized office properties. Finally, new
construction has begun on speculative office projects, with partial preleasing
mandatory, which is deemed as a positive factor.
The following chart summarizes the status of the Midtown Office Market
(excluding Midtown South) as of the first quarter 1997.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Midtown Manhattan Office Market Statistics - 1Q1997
====================================================================================================================================
Class A Class B Class C Overall
====================================================================================================================================
<S> <C> <C> <C> <C>
Number of Built Buildings 342 328 108 778
Inventory - Square Feet 168,126,777 39,395,235 13,127,089 220,649,101
- ------------------------------------------------------------------------------------------------------------------------------------
Overall Availabilities - SF 15,952,711 6,160,384 1,693,200 23,806,295
YTD Under Construction 1 Qtr 1997 1,614,000 0 0 1,614,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Leasing Activity 1996 - SF 15,134,075 2,641,959 859,620 18,635,654
Total Leasing Activity 1st Qtr. 1997 - SF 3,753,633 871,470 261,072 4,886,175
- ------------------------------------------------------------------------------------------------------------------------------------
Total Absorption 1996 - SF 1,530,652 103,212 133,649 1,767,513
Total Absorption 1st Qtr. 1997 - SF (234,687) (67,663) (20,176) (322,526)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Vacancy Rate 9.50% 15.60% 12.9% 10.80%
Total Avg. Asking Rental Rate $ 36.14 $ 22.63 $ 12.43 $ 30.95
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Cushman & Wakefield Research Services
Class A: Buildings which meet three or more of the following criteria: centrally
located, professionally managed and maintained; attract high-quality tenants and
command upper-tier rental rates. Structures are modern or have been modernized
to successfully compete with newer buildings.
Class B: Buildings with less than three of the criteria listed above. In
addition, the current or prospective tenants must be office space users.
Class C: Buildings competing for tenants requiring functional space at rents
below average.
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Midtown Manhattan Office Market Analysis
================================================================================
Supply
The last wave of new construction activity in Midtown was initiated by the
1981 rezoning of the West Side of Manhattan centering around Times Square. The
temporary zoning change increased the permissible density (FAR) of potential
building sites. This prompted many developers to acquire sites and begin
construction in order to meet the zoning deadline requirement that foundations
be in place by May 13, 1988. East Side sites were conversely downzoned, although
the scarcity of sites on the East Side minimized the effects of the downzoning.
The 1981 rezoning of the West Side, which was successful in promoting
development, was scaled back in 1987. Developers who took advantage of the
rezoning have long since completed those buildings. New office construction over
the past few years has been almost non-existent, with just nine (primarily owner
occupied) buildings completed between 1992 and 1994. This slowdown in
construction activity was attributed to the oversupply of office space created
by the building boom of the 1980s, the decreased demand for space that is the
result of corporate downsizing and relocation out of New York City, and general
economic weakness stemming from the past recession.
Proposals for construction over the next few years have been minimal,
which has had a favorable impact on occupancy levels. The following chart lists
the most recent office projects proposed and under construction.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Midtown Office Building Projects - Proposed and Under Construction
====================================================================================================================================
Rentable
No. Property Status Office SF Constructed For
====================================================================================================================================
<S> <C> <C> <C> <C>
1 German Embassy Under Construction 114,000 Owner/User
871 United Nations Plaza
- ------------------------------------------------------------------------------------------------------------------------------------
2 4 Times Square - NE Tower Under Construction 1,500,000 Conde Nast and Skadden, Arps have
1480 Broadway committed to 80% of available space
- ------------------------------------------------------------------------------------------------------------------------------------
3 Park Avenue Place Proposed 800,000 Anchor tenants will likely be secured
383 Madison Avenue prior to construction
- ------------------------------------------------------------------------------------------------------------------------------------
4 One Rockefeller Plaza West Proposed 1,460,000 Anchor tenants will likely be secured
745 Seventh Avenue prior to construction
- ------------------------------------------------------------------------------------------------------------------------------------
5 Heron Tower II Foundation in place 125,000 Office/Hotel Speculative
60 East 55th Street
- ------------------------------------------------------------------------------------------------------------------------------------
6 Columbus Center Developer to be announced 1,340,000 Mixed Use -- Office, Retail and
Columbus Circle & 59th Street Residential
- ------------------------------------------------------------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
</TABLE>
There have been no new speculative office building completions since 1992,
when Americas Tower, 450 Lexington Avenue and 565 Fifth Avenue were completed.
The over-built market and corresponding decrease in market rents during the past
recession made new construction infeasible.
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Midtown Manhattan Office Market Analysis
================================================================================
More recently, a few new office projects have broken ground for
construction. The new German Embassy was long identified as a speculative office
site. The Albanese development firm sold the site and is constructing a
build-to-suit project for the German government. The other new projects,
excluding 4 Times Square, will most likely not be built without a commitment
from major tenants. This is a standard requirement in many other office markets
nationally and a primary condition to secure traditional construction financing.
Following is a bar graph exhibiting both Midtown and Midtown South
construction and vacancy. The vacancy rate indicated varies from some of the
statistics included in this market overview due to the inclusion of Midtown
South in this presentation.
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<PAGE>
- --------------------------------------------------------------------------------
MIDTOWN & MIDTOWN SOUTH
CONSTRUCTION & CLASS A DIRECT VACANCY RATES
1973 - 1ST QUARTER 1997
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
CUSHMAN &
WAKEFIELD(R)
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<PAGE>
Midtown Manhattan Office Market Analysis
================================================================================
Proposed New Construction
Many of the proposed projects listed on the chart have been in the
planning stage for a number of years. The developers of these projects have been
marketing the proposed office space for quite some time. The first two projects
listed transferred to new owners and broke ground. Two of the other sites were
also sold and new development is coming closer to fruition.
In 1996, 871 U.N. Plaza, located on a 50-by-100 square foot site between
East 48th and East 49th streets, was purchased by the Federal Republic of
Germany. Construction of the 114,000+/- square foot property recently commenced
and will take approximately two years to complete. It will be entirely occupied
by the German Government, which will consolidate three of its New York offices.
The entire project will cost $30 million, which includes the purchase and
construction of the existing site and adjacent land.
Four Times Square, which is part of the Times Square redevelopment
project, will be the first new office development to take place. The Durst
Organization broke ground in August 1996, at the Northeast Tower site, a 1.5+/-
million square foot proposed office and retail tower. The Durst Organization
purchased the site for an estimated price of over $70 million from Prudential
Insurance. Included with the site are a variety of zoning and real estate tax
incentives which transferred to Durst in the sale. Construction on the site,
located along Broadway between West 42nd and 43rd streets, is underway and a
scheduled completion date of 1999 is expected. Conde Nast, its anchor tenant,
committed to lease more than 550,000+/- square feet within the proposed
building. In November 1996, the law firm of Skadden, Arps, Slate, Meagher & Flom
completed a deal for 660,000+/- square feet. It is reported that Morgan Stanley
is considering a 400,000+/- square foot commitment in the structure and
Bertelsmann, Inc. is also contemplating leasing approximately 300,000+/- square
feet in the building.
In mid-February 1996, the al-Babtain family of Saudi Arabia, investment
partners with CS First Boston in the 383 Madison Avenue-Park Avenue Place
property, exercised a purchase option to take control of the site for
$55,000,000. The proposed structure would contain approximately 800,000+/-
square feet of office area with the floor plates ranging between 26,000+/-
square feet and approximately 48,000+/- square feet. Several prospective users
have expressed interest in this site including Bear Stearns, Dean Witter, Union
Bank of Switzerland and Chase Bank. However, the current owner has not expressed
a serious interest to undertake an immediate development of this site and may
ultimately delay the development for the present time. The British developer
Howard Ronson of HRO International had been marketing the site for over two
years, but lost the development opportunity when CS First Boston's ex-partner
exercised its purchase option.
Another significant proposed office building project is One Rockefeller
Plaza West. Rockefeller Center Properties is marketing the proposed 1.46+/-
million square foot, 55-story tower site, controlled by Mitsubishi Estate
through Cushman & Wakefield Brokerage Services. At the present time, there is
moderate interest in this site. Potential tenants have analyzed the project with
rents being determined based on the requested design and scope of the tenants'
specific needs. The site, which may be connected to the Rockefeller Center
retail concourse, is being used on an interim basis as an open parking facility.
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<PAGE>
Midtown Manhattan Office Market Analysis
================================================================================
A development site that was recently re-introduced to the market is the
New York Coliseum site at Columbus Circle. The site is located along Central
Park South - West 59th Street and Central Park West - Eighth Avenue with the
potential to build over 1.2 million square feet of space on a 3.4 acre parcel.
MTA officials which control the site sent out a Request for Proposal in July
1996, and are anticipating a sale price of over $150 million. Reportedly, all of
the well-known developers in Manhattan submitted proposals/offers for the site.
Most of the submitted proposals are for mixed-use projects combining office,
retail and residential components. The bid process has been completed and the
MTA should announce a short list of developers in February. The winning bidder
is expected to be announced in April 1997.
Across the street from the Coliseum site is 2 Columbus Circle, another
site slated for sale or redevelopment by New York City. Proposals submitted for
consideration may either make use of the existing ten-story white marble block
building, or include construction of a new building in accordance with current
zoning resolutions and compatibility with the surrounding community.
A site located at 1530 Broadway was recently reported to be under
consideration for development. This parcel contains a footprint of approximately
45,000 square feet and is currently occupied by the Roundabout Theater on
Broadway under a lease which expires in March 1999. This parcel can accommodate
an as-of-right zoning floor area of 600,000+/- square feet with uses which
include retail, signage, hotel and office. The owner, Charles Moss, has not yet
announced plans for the site.
In other construction news, the site and foundation for the proposed Heron
Tower II, located at 60 East 55th Street, was sold in March 1996 to the
commercial real estate developers, Americas Tower Partners, the Bernstein
Brothers, for $5.3 million. The new owners are considering an office development
or possibly a hotel project.
The most recent wave of speculative office construction was conceived and
designed almost a decade ago. Since that time, given the technological advances
in terms of building construction and the level of sophisticated build-outs now
required by most tenants in the current market, it is reasonable to assume that
this next wave of construction will prompt a demand for "smarter buildings" and
a more favorable rent-to-expense ratio.
There is very strong interest and desire on the part of tenants within the
market to find consolidated commitments preferably in new buildings. There are a
variety of requirements which influence the decisions of tenants, such as:
o Space located on contiguous floors: At the present time, there are
very few opportunities to secure large blocks of suitable space in
Midtown. Given the number of large tenants in the market, there is
likely to be increased competition for large blocks of available
supply.
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Midtown Manhattan Office Market Analysis
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o Space in modern buildings designed for high technology users:
Businesses today rely heavily on telecommunications, computers and
sophisticated mechanical equipment which require an environment that
can accommodate "state of the art" technology. Spaces under
consideration would require both raised floors and suspended
ceilings, making the existing supply of availabilities located in
older buildings inadequate to meet the constantly changing needs.
Space is limited in many post-1985 "smart buildings" to relatively
small units.
o Avoidance of functionally obsolescent buildings: Inability to
accommodate upgraded electrical and telecommunications risers as
well as HVAC coverage is a crucial factor. Additionally, pre-1975
structures often used asbestos-containing materials as a fire
retardant. Complete renovation of such spaces may resolve many of
these inadequacies, but certain structural factors such as slab to
slab heights and column spacing cannot be changed economically.
o Proximity to established transportation hubs: Tenants have expressed
a strong desire to be near established transportation hubs such as
Grand Central Terminal and Pennsylvania Station.
At the present time, the existing supply of space within the Midtown
Manhattan market cannot fully satisfy the demand for large blocks of contiguous
space. When the age and location of space is also considered, realistic choices
are limited. However, desire to locate out of the Midtown Manhattan area is not
apparently a strong trend. Analysis of tenants currently in the market indicates
that less than 13 percent contemplate locations outside of New York City.
Leasing activity for office space in Midtown Manhattan continues to increase and
is expected to remain steady into the near future.
Demand
The following chart provides a breakdown of leasing activity in the
Midtown sub-districts and Midtown South from 1985 through the first quarter of
1997.
<TABLE>
<CAPTION>
Midtown Leasing Activity by District (SF)
====================================================================================================================================
Year Plaza Grand Central Midtown West Midtown South Total
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
1985 4,026,951 2,829,263 3,289,313 1,782,866 11,923,843
1986 6,913,195 3,730,673 4,411,042 2,459,768 17,542,184
1987 6,161,960 4,806,671 4,780,460 3,428,095 19,181,945
1988 6,040,805 4,027,576 5,982,913 1,847,195 17,898,489
1989 6,089,294 4,039,726 5,286,691 2,902,038 18,318,334
1990 5,660,136 3,406,050 4,998,241 1,828,555 15,892,982
1991 5,195,632 2,875,776 3,682,264 1,667,853 13,421,525
1992 6,059,470 3,792,338 4,714,699 2,184,259 16,750,766
1993 7,039,477 3,491,990 5,172,914 2,345,591 18,049,972
1994 8,403,760 3,587,694 5,228,707 2,979,190 20,199,351
1995 7,798,621 4,344,954 4,699,239 5,058,002 21,900,816
1996 8,165,048 4,960,750 5,509,856 4,351,440 22,987,094
1Q 1997 2,003,337 1,567,474 1,315,364 914,514 5,800,689
- ------------------------------------------------------------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
</TABLE>
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<PAGE>
Midtown Manhattan Office Market Analysis
================================================================================
Leasing activity in 1992 signaled a reversal of the downward trend caused
by the past recession, with the total of square feet leased showing a 24.8
percent increase over 1991. Annual leasing activity in 1993 reached 18.0 million
square feet, a 7.8 percent increase over 1992, and the highest level of leasing
activity achieved in Midtown since 1989. Midtown leasing activity in 1994 was
strong, and the year-end total of 20.2+/- million square feet was the highest
total recorded for the Midtown market over the past decade. Leasing activity in
1995 reached nearly 22 million square feet (inclusive of Midtown South),
exceeding the record 1994 leasing activity and continuing an upward trend. Total
year-end 1996 Midtown leasing activity (excluding Midtown South) reached a
healthy 18.6+ million square feet. With the addition of Midtown South, leasing
activity shot up to 22.9+ million square feet, an all-time high. First quarter
1997 Midtown leasing activity was 4.8+/- million square feet, up from 4.0+/-
million square feet in the first quarter of 1996.
The following charts summarize the largest Midtown leases and the major
space additions over the past 12 months.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Significant Transactions Last 12 Months
====================================================================================================================================
Building Market Tenant Date SF
====================================================================================================================================
<S> <C> <C> <C> <C>
4 Times Square West Side Skadden, Arps 4Q 1996 659,937
4 Times Square West Side Conde Nast Publications 3Q 1996 568,151
150 East 42nd Street Grand Central Pfizer Inc. 4Q 1996 293,841
55 East 52nd Street Park Avenue ING Capital Markets 1Q 1997 278,200
345 Park Avenue Park Avenue JP Morgan & Company 4Q 1996 242,802
150 East 42nd Street Grand Central Gruner & Jahr Publishing 3Q 1996 174,681
55 East 52nd Street East Side Swiss Re Holding N.A. 4Q 1996 151,327
150 East 42nd Street Grand Central Bayerische Vereins Bank 1Q 1997 136,684
555 West 57th Street West Side BMW of Manhattan 4Q 1996 130,059
1301 Avenue of the Americas 6th/Rock Center Deutsche Bank A.G. 4Q 1996 125,200
1211 Avenue of the Americas 6th/Rock Center The News Corporation 3Q 1996 113,102
888 Seventh Avenue West Side Golden Books Publishing, Inc. 1Q 1997 112,290
11 West 42nd Street Grand Central Anne Klein 2Q 1996 105,089
245 Park Avenue Park Avenue Bear Stearns & Co., Inc. 3Q 1996 98,495
1251 Avenue of the Americas 6th/Rock Center Deutsche Bank A.G. 2Q 1996 95,700
One Park Avenue Murray Hill Public Service Mutual Insurance 1Q 1997 89,700
1345 Avenue of the Americas 6th/Rock Center Arnhold & S. Bleichroeder 2Q 1996 81,687
1211 Avenue of the Americas 6th/Rock Center Nissho Iwai American Corp. 3Q 1996 79,150
- ------------------------------------------------------------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
</TABLE>
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Midtown Manhattan Office Market Analysis
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Major Space Additions Last 12 Months
====================================================================================================================================
Direct Date
Building Market or Sublease Tenant Vacating Available SF
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
825 Eighth Avenue West Side Sublease Ogilvy & Mather Jan-98 477,070
9 West 57th Street Mad/Fifth Direct Avon Products Jul-97 450,000
625 Madison Avenue Mad/Fifth Sublease Revlon 4Q 1997 387,395
520 Madison Avenue Mad/Fifth Direct Various 4/97-12/97 298,900
777 Third Avenue East Side Direct Gray Advertising Jan-00 261,600
866 Third Avenue East Side Direct Macmillan Comm. Immediate 225,000
One Penn Plaza West Side Sublease Stone & Webster Eng. Immediate 165,764
335 Madison Avenue Grand Central Direct Bank of America Jan-97 155,194
410 East 62nd Street East Side Direct Vacant Immediate 125,000
200 Park Avenue Park Avenue Direct Met Life mid-1997 122,916
1211 Ave. of Americas 6th/Rock Center Direct Nissho Iwai Jan-97 118,725
Tower 49 Mad/Fifth Direct Credit Suisse Apr-97 116,750
1230 Ave. of Americas 6th/Rock Center Direct USA Network Immediate 108,301
450 West 33rd Street Penn Station Sublease Chemical Bank Immediate 100,000
One Park Avenue Murray Hill Sublease Loews Corporation Immediate 100,000
Tower 49 Mad/Fifth Sublease CS First Boston Apr-97 98,780
280 Park Avenue East Park Avenue Direct Bankers Trust Immediate 92,118
- ------------------------------------------------------------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
</TABLE>
Vacancy and Asking Rents
Over 22 percent of Midtown's Class A inventory has come on line since 1980, and
office construction since 1985 has increased primary inventory by 13.9 percent.
The following chart provides primary and secondary vacancy rates along with
weighted average asking rental rates for Midtown and Midtown South from 1984
through the first quarter 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Vacancy and Asking Rents
========================================================================================================
Year Vacancy Rates* Asking Rental Rates* Total Leasing Activity SF
Class A Class B Class A Class B (including Midtown South)
========================================================================================================
<S> <C> <C> <C> <C> <C>
1984 6.60% 7.80% $37.77 $20.50 15,459,000
1985 9.10% 10.50% $38.15 $22.70 11,923,000
1986 9.70% 12.90% $38.55 $21.76 17,497,000
1987 10.20% 13.30% $38.46 $23.76 19,182,000
1988 13.00% 14.70% $39.45 $23.47 17,898,489
1989 14.70% 15.10% $40.28 $23.26 18,317,700
1990 17.20% 16.80% $40.26 $21.10 16,014,023
1991 16.80% 18.50% $37.47 $19.71 13,421,525
1992 16.30% 20.10% $34.38 $19.14 16,750,766
1993 15.50% 18.60% $33.17 $19.56 18,049,972
1994 13.40% 16.40% $33.60 $19.82 20,199,351
1995 12.10% 15.6%* $34.36 $22.36* 21,900,816
1996 9.90% 14.60% $34.75 $21.31 22,987,094
1Q 1997 9.40% 14.80% $35.78 $21.64 5,800,689
- --------------------------------------------------------------------------------------------------------
* As of 1995 Class C space is excluded from Class B calculations
Source: Cushman & Wakefield Research Services
</TABLE>
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<PAGE>
Midtown Manhattan Office Market Analysis
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The Midtown primary vacancy rate climbed to a year-end high of 17.2
percent in 1990 and remained above 15 percent through 1993. This increase in the
vacancy rate was touched off by the substantial amount of new construction
completed in the Special Midtown Zoning District, which came on line just as the
economy was heading into the past recession. New York City was particularly
affected by the recession, with approximately 350,000 jobs eliminated due to
corporate consolidations, relocations and downsizing. With the large increase in
primary inventory due to the rezoning of the West Side, the loss of nearly
one-tenth of the City's job base, and the general downturn in the economy, a
rise in the vacancy rate was inevitable.
The dearth of new construction coming on-line and moderate job growth
predicted over the next couple of years should mean that the vacancy rate will
continue to decline in the near term. However, it's expected that over 2.0+/-
million square feet of newly constructed office space will be completed by the
year 2000. As of the first quarter of 1997 the Midtown Class A vacancy rate was
9.5 percent, the lowest year-end rate since 1987. In the fourth quarter of 1996,
both the Class A and Class B inventory showed continued declines, with vacancy
rates of 10.0 percent and 15.5 percent, respectively. First quarter 1997 Class B
vacancy rate was reported at 15.6 percent. This positive trend is expected to
continue thru 1997 due to the strong demand for space in the Grand Central, West
Side and Sixth Avenue/Rockefeller Center sub-markets.
Absorption
Midtown has enjoyed positive overall net absorption over the past few
years, though figures from year to year often exhibit wide fluctuations. Net
absorption also varies considerably by district, between primary and secondary
space, and when space is reclassified or dropped from the survey conducted by
Cushman & Wakefield Research Services. Net absorption in the Midtown (inclusive
of Midtown South) office market from 1993 through the first quarter of 1997, is
summarized on the bar graph on the following page.
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<PAGE>
- --------------------------------------------------------------------------------
MIDTOWN & MIDTOWN SOUTH CLASS A
ABSORPTION BY YEAR
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
Source: Cushman & Wakefield Research Services
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VALUATION ADVISORY SERVICES
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<PAGE>
Midtown Manhattan Office Market Analysis
================================================================================
Historical overall net absorption figures indicate that Midtown usually
experiences positive absorption. In the past decade overall Midtown net
absorption was negative in only one year, 1988, the year after the stock market
crash. The market rebounded in 1989, when over 4 million square feet was
absorbed, resulting in positive overall absorption of 1.7 million square feet.
The largest positive change in overall net absorption occurred between 1993 and
1994. Overall net absorption increased by 5.8 million square feet, resulting in
the absorption of over 7 million square feet in 1994, the highest level of
overall absorption experienced by the Midtown market in the past decade. This
tremendous amount of absorption is explained in large part by the high level of
leasing activity that occurred in Midtown in 1994. With leasing activity
totaling 20.2 million square feet, the overall vacancy rate dropped 2 percentage
points from year-end 1993 to year-end 1994, the largest decrease in the overall
vacancy rate on a year-over-year basis since the 1980s. Through the fourth
quarter of 1996, absorption increased significantly to over 1.7 million square
feet for the year. First quarter of 1997 overall absorption was negative 327,526
due mainly to new availabilities in the Midtown market.
Midtown Manhattan Sub-districts
Midtown Manhattan has traditionally been divided into four sub-districts
delineated by geographic boundaries: Plaza, Grand Central, Midtown West and
Midtown South. Cushman & Wakefield has changed the way in which Midtown is
sub-districted to better reflect trends within the various office sub-markets.
Both the traditional and the corresponding new office sub-markets are discussed
below.
Plaza District (East Side, Park Avenue, Madison/Fifth, Sixth/Rockefeller
Center)
This district had traditionally been defined as the area between 47th and
65th streets, from Fifth Avenue to the East River, and more recently had its
western border expanded to Seventh Avenue. The expansion of this district was
explained by the willingness of many major companies to locate west of Fifth
Avenue to the corporate towers along Avenue of the Americas. The firmly
established locations of offices on Park, Madison and Fifth avenues form the
cornerstone of the Plaza District. Many familiar and noteworthy buildings,
including Rockefeller Center, the Citicorp Building, Trump Tower, the Seagram
Building, the Solow Building, the General Motors Building, and several buildings
along the Avenue of the Americas office corridor lie within the boundaries of
the Plaza District.
The sub-districts that form what is otherwise known as the Plaza District
reflect the strongest market rents in Midtown. This is the result of the
long-standing reputation that these markets have enjoyed as the premier office
locations in Manhattan for corporate domestic and international headquarters.
These include the banking, legal and financial services industries as well as,
but to a lesser degree, communications, publishing and advertising firms.
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Midtown Manhattan Office Market Analysis
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Grand Central District (Murray Hill, Grand Central, United Nations)
The traditional Grand Central District continuously exhibited relatively
stable vacancy rates, asking rents and leasing activity. The main reason for
this situation is that this district contains some of the oldest and most famous
Midtown office buildings and new construction has been limited. The area, which
extended from 32nd Street to 47th Street and from Fifth Avenue to the East
River, offered few sites for redevelopment. Due to the lack of available sites,
developers have had to be innovative; 450 Lexington Avenue, constructed atop the
Grand Central Post Office, is a prime example.
Midtown West District (Westside, Penn Station, Textile/Garment, Lincoln
Center)
Midtown West was traditionally known as the area bounded by 30th Street
and 47th Street west of Fifth Avenue to the Hudson River and by 47th Street to
70th Street west of Seventh Avenue, to the Hudson River. This market experienced
a dramatic surge in development from 1985 through 1990, and was widely expected
to become the center of new office development in Manhattan, meeting the
expansion needs of major Midtown Manhattan space users. The primary reason for
this increase in development was a 20 percent zoning bonus (floor area ratio
increased from 15 to 18 times the lot area) enacted in 1981, which expired on
May 13, 1988. In order to be eligible for this bonus, the full foundation work
on new projects had to be completed by that date. Approximately 16 development
sites had foundations in place or were under construction at that time. This
construction produced a renaissance in the Midtown West District.
The Midtown West market grew and dominated new construction in Midtown
Manhattan through 1991, and from 1989 to the present, Midtown West construction
accounts for 57 percent of all construction completions in Midtown. The area
that formerly comprised the Midtown West office district is now divided into the
four sub-markets mentioned above.
Midtown South (SoHo, Greenwich/NoHo, Madison Square/Union Square, Hudson
Square/West Village, Chelsea)
The Midtown South office district comprises 21 percent of the total
Midtown Manhattan inventory of office space. Just 727,000+/- square feet (4.4
percent of total Midtown's primary) is considered Class A space, which is
generally considered competitive with some Midtown Class B and C buildings.
Well-located buildings along Park Avenue South, Madison Avenue, Fifth Avenue and
Broadway are some of the district's most desirable.
Midtown South has undergone a tremendous renaissance over the past year,
enjoying strong leasing activity. The 1996 year-end leasing activity of 4.4+/-
million square feet was significant, including the largest fourth quarter
transaction of Credit Suisse, which will occupy 428,000 square feet at 11
Madison Avenue. Dynamic leasing activity in this market has also driven the
overall year-to-date absorption to positive 664,000+/- square feet. First
quarter of 1997 leasing activity was 914,519 square feet, while the first
quarter of 1997 absorption was 261,513 square feet.
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Midtown, New York Office Market Office Market Report
Overall Statistical Summary First Quarter 1997
Total Direct Total Direct Total YTD YTD
Available Vacancy Vacancy Wtd.Av. Wtd.Av. Absorption Leasing
Submarket Name Inventory Space Rate Rate Rental Rate Rental Rate Rate Activity
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Murray Hill 13,281,401 1,857,039 12.6% 14.0% $ 26.34 $ 25.63 (53,207) 526,412
Grand Central 40,745,105 4,241,824 9.4% 10.4% $ 31.48 $ 31.13 130,566 1,041,062
United Nations 3,093,204 274,611 8.1% 8.9% $ 31.27 $ 30.79 (1,458) 0
East Side 19,038,255 1,973,964 8.9% 10.4% $ 33.37 $ 33.13 (105,366) 229,997
Park Avenue 21,043,271 1,551,309 6.2% 7.4% $ 44.62 $ 43.94 (84,820) 597,098
Madison/Fifth Avenue 24,114,289 3,002,035 11.0% 12.4% $ 44.43 $ 44.09 (470,966) 649,374
Sixth Avenue/Rock Ctr 37,027,060 2,340,093 4.8% 6.3% $ 38.37 $ 37.14 54,728 526,868
West Side 22,102,063 1,473,612 4.6% 6.7% $ 26.52 $ 25.87 403,867 592,477
Penn Station 13,943,971 3,153,860 19.8% 22.6% $ 24.00 $ 23.38 (146,411) 243,357
Textile/Garment 23,748,095 3,824,105 15.6% 16.1% $ 21.48 $ 21.35 (15,414) 475,675
Lincoln Center 2,512,387 113,843 4.5% 4.5% $ 21.87 $ 21.96 (34,045) 3,855
Midtown Total 220,649,101 23,806,295 9.4% 10.8% $ 31.22 $ 30.95 (322,526) 4,886,175
SoHo 3,294,860 65,461 1.8% 2.0% $ 19.81 $ 19.62 1,569 35,723
Greenwich/NoHo 4,610,441 835,920 16.3% 18.1% $ 18.95 $ 18.14 76,645 110,565
Madison/Union Square 29,187,132 2,790,060 8.2% 9.6% $ 21.32 $ 21.84 64,699 432,724
Hudson Sq./W. Village 9,994,272 1,206,764 10.8% 12.1% $ 14.49 $ 15.27 80,132 124,283
Chelsea 13,349,944 1,827,244 12.3% 13.7% $ 12.52 $ 13.11 38,468 211,219
Midtown South Total 60,436,649 6,725,449 9.8% 11.1% $ 17.32 $ 17.81 261,513 914,514
Source: Cushman & Wakefield Research Services
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Midtown, New York Office Market Office Market Report
Class A Statistical Summary First Quarter 1997
Total Direct Total Direct Total YTD YTD
Available Vacancy Vacancy Wtd.Av. Wtd.Av. Absorption Leasing
Submarket Name Inventory Space Rate Rate Rental Rate Rental Rate Rate Activity
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Murray Hill 7,089,581 1,074,892 13.9% 15.2% $ 29.63 $ 28.62 (164,407) 272,665
Grand Central 33,781,805 3,584,062 9.5% 10.6% $ 32.83 $ 32.35 125,999 881,590
United Nations 2,580,606 244,039 8.7% 9.5% $ 31.42 $ 30.93 (1,458) 0
East Side 17,505,333 1,666,571 8.0% 9.5% $ 36.65 $ 36.00 (103,409) 219,397
Park Avenue 21,043,271 1,551,309 6.2% 7.4% $ 44.62 $ 43.94 (84,820) 597,098
Madison/Fifth Avenue 22,326,146 2,842,526 11.2% 12.7% $ 45.43 $ 44.96 (452,634) 619,684
Sixth Avenue/Rock Ctr 35,701,968 2,224,140 4.7% 6.2% $ 39.27 $ 37.83 88,432 516,305
West Side 16,441,593 1,083,322 3.8% 6.6% $ 31.95 $ 28.94 363,606 460,355
Penn Station 6,099,415 1,365,065 18.6% 22.4% $ 31.43 $ 30.43 (18,892) 102,782
Textile/Garment 4,102,922 316,785 7.7% 7.7% $ 29.03 $ 29.02 12,896 83,757
Lincoln Center 1,454,137 0 0.0% 0.0% N/A N/A 0 0
Midtown Total 168,126,777 15,952,711 8.0% 9.5% $ 37.03 $ 36.14 (234,687) 3,753,633
SoHo 0 0 0.0% 0.0% N/A N/A 0 0
Greenwich/NoHo 0 0 0.0% 0.0% N/A N/A 0 0
Madison/Union Square 8,404,239 554,704 4.6% 6.6% $ 28.47 $ 29.26 103,446 29,890
Hudson Sq./W. Village 1,270,948 123,868 0.0% 9.7% N/A $ 22.00 0 0
Chelsea 540,000 48,000 8.9% 8.9% $ 30.00 $ 30.00 (31,500) 16,500
Midtown South Total 10,215,187 726,572 4.2% 7.1% $ 28.64 $ 28.07 71,946 46,390
Source: Cushman & Wakefield Research Services
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Midtown, New York Office Market Office Market Report
Class B Statistical Summary First Quarter 1997
Total Direct Total Direct Total YTD YTD
Available Vacancy Vacancy Wtd.Av. Wtd.Av. Absorption Leasing
Submarket Name Inventory Space Rate Rate Rental Rate Rental Rate Rate Activity
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Murray Hill 5,466,475 702,547 11.1% 12.9% $ 22.36 $ 22.22 107,650 234,697
Grand Central 6,882,300 646,637 8.9% 9.4% $ 24.74 $ 24.62 4,567 159,472
United Nations 512,598 30,572 5.2% 6.0% $ 30.00 $ 29.73 0 0
East Side 1,472,722 303,393 19.3% 20.6% $ 17.34 $ 17.53 (1,957) 10,600
Park Avenue 0 0 0.0% 0.0% N/A N/A 0 0
Madison/Fifth Avenue 1,762,090 159,509 8.8% 9.1% $ 28.34 $ 28.45 (18,332) 29,690
Sixth Avenue/Rock Ctr 1,304,092 114,453 8.2% 8.8% $ 24.53 $ 24.04 (33,704) 10,563
West Side 2,387,277 150,220 5.9% 6.3% $ 23.58 $ 23.38 46,874 100,495
Penn Station 5,583,434 1,466,189 26.1% 26.3% $ 19.44 $ 19.43 (127,224) 109,875
Textile/Garment 13,020,997 2,473,021 18.3% 19.0% $ 24.40 $ 24.20 (11,492) 212,223
Lincoln Center 1,003,250 113,843 11.2% 11.3% $ 21.87 $ 21.96 (34,045) 3,855
Midtown Total 39,395,235 6,160,384 15.0% 15.6% $ 22.72 $ 22.63 (67,663) 871,470
SoHo 1,039,880 7,500 0.7% 0.7% $ 26.33 $ 26.33 10,360 20,353
Greenwich/NoHo 2,888,613 613,950 20.0% 21.3% $ 20.42 $ 20.14 76,665 82,465
Madison/Union Square 15,860,433 1,772,851 10.0% 11.2% $ 21.58 $ 21.54 (14,662) 346,834
Hudson Sq./W. Village 1,998,316 407,968 20.3% 20.4% $ 18.42 $ 18.43 56,939 58,900
Chelsea 5,187,510 846,319 12.8% 16.3% $ 16.95 $ 17.28 (15,383) 32,678
Midtown South Total 26,974,752 3,648,588 12.0% 13.5% $ 20.04 $ 19.98 113,919 541,230
Source: Cushman & Wakefield Research Services
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Midtown Manhattan Office Market Analysis
================================================================================
Summary
The Midtown Manhattan office market has recovered from the effects of the
recent recession. After displaying lackluster leasing in 1990 and 1991 during
the national recession, Midtown leasing activity began to improve in 1992.
Leasing activity in 1993 was brisk, and 1994 posted over 20 million square feet
of leasing activity. Year-end 1996 had the highest level of leasing activity in
the twelve years that Cushman & Wakefield has reported these statistics,
including six Midtown South transactions in the fourth quarter, each in excess
of 100,000 square feet, finishing the year at 22.9+ million square feet. First
quarter of 1997 year-to-date leasing activity was reported as 4.9+/- million
square feet.
As total Midtown leasing for the year substantially outweighed new space
availabilities, absorption was positive, totaling 1.8+/- million square feet.
First quarter of 1997 absorption was negative 323,000 square feet due mainly to
new availabilities in the Midtown market. Dynamic leasing activity in Midtown
South was also instrumental in driving its overall year-to-date absorption to
positive 664,000 square feet, exceeding previous projections.
The overall vacancy rate in Midtown fell to 10.8 percent from 12.1 percent
at the end of first quarter of 1997. The Class A vacancy rate, which was 12.1
percent one year ago, dropped to 9.5 percent in the first quarter of 1997, its
lowest level in ten years. These statistics are a strong indication that the
Midtown market has improved, evidencing continued absorption and growing demand
for space that entered the market during the late 1980s.
New construction was almost non-existent in 1993 through the first half of
1996, with just a few owner occupied buildings completed. New construction
completions through the end of the century will be limited to a few significant
projects of which most will be pre-leased, given the security most lenders
require in the wake of the past recession. This limited construction activity
bodes well for the Midtown market since it forces office tenants to take space
in existing buildings, thereby lowering the vacancy rate and increasing the
rental rate over the long term.
Conclusion
The Midtown Manhattan market appears to have stabilized and the outlook
for the near future is encouraging. Both leasing and absorption activities
improved significantly through the fourth quarter of 1996, and this positive
trend is expected to continue through 1997, supported by a stable regional
economy.
The Midtown Manhattan vacancy rate continues to fall, and asking rents
have increased albeit slightly. Real estate analysts expect a period of
stability within the Midtown Manhattan market over the next year, with base
rents remaining level or showing modest increases. It is anticipated, however,
that concession packages should continue to decline, resulting in an effective
rental rate increase. The overall assessment of the Midtown office market is
more positive than in recent years.
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Neighborhood Map
[GRAPHIC OMITTED]
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<PAGE>
NEIGHBORHOOD ANALYSIS
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The subject office building is located at 605 Third Avenue, between 39th
Street and 40th Street. As mentioned previously, the subject property's location
is within the Grand Central Office Market District of Midtown Manhattan. Due to
the subject's address, the building can be described as the southeast corner of
the Grand Central Office Market District.
Immediate Neighborhood
The subject office building is located on the easterly side of Third
Avenue, bounded by 39th Street to the south, and 40th Street to the north. As a
blockfront structure, the subject property offers frontage on Third Avenue, 39th
Street and 40th Street. To the west of the subject building, on the opposite
side of Third Avenue, is 600 Third Avenue, a 42-story office complex. An office
building containing 925,000+/- square feet of office space is located at 633
Third Avenue, bordering the subject to the north. Bordering the subject to the
south and east is the residential neighborhood of Murray Hill, which features
numerous low-rise residential structures. The subject's immediate neighborhood
enjoys a variety of commercial and residential structures, due to the subject's
unique location at the southeast corner of the Grand Central Office Market
district. In general, the subject is bordered by corporate oriented buildings to
the north and west and the predominantly residential neighborhood of Murray Hill
to the south and east.
The 43-story subject property was constructed in 1963 and features
favorable access to both Grand Central Station and the Queens Midtown Tunnel.
The close proximity of the train station, featuring several lines of the
intricate NYC Subway system and serving Metro-North commuters as far north as
New Haven, Connecticut; and the tunnel, offering motorists easy access from the
Long Island Expressway, bodes very well for the subject facility. Additionally,
the subject property enjoys excellent views to the south and east. As mentioned
above, the subject property is bounded by lower-story residential buildings to
the south and east, and therefore enjoys virtually unobstructed views in those
directions. Lastly, although the subject building is approximately 32 years in
age, its effective age is considerably lower due to on-going renovations. Over
the history of the building, significant improvements to the structure's
mechanical systems and public areas have occurred. These include upgrading the
cooling towers and the air-cooling and ventilation system throughout the
building, upgrading the elevator systems, and renovating the main entrance lobby
and the elevator lobbies on each office floor.
Competitive Building Overview
In order to identify the office buildings considered most comparable with
the subject property, we have conducted a survey of the Grand Central Office
Market district. Based upon our survey, we have concluded that 17 office
properties compete with the subject building within the Grand Central District.
The competitive building write-ups, found on the following pages, describe and
highlight pertinent office market statistics of the buildings deemed most
comparable with the subject.
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Neighborhood Analysis
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Subject Property
Location: 605 Third Avenue
Year Built: 1963
No. of Floors: 43
Rentable Area
Office: 948,103+/- SF
Retail: 17,070+/- SF
Basement: 19,274+/- SF
Total: 984,447+/- SF
Office Area Available (All Direct): 18,695+/- SF
Office Vacancy Rate: 1.9%
Typical Floor Size
Minimum: 18,000 SF
Maximum: 34,200 SF
Asking (Face Rates)
Office: $335.00 to $37.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The subject building, 605 Third Avenue, was built in 1963 and contains
984,447+/- total square feet of space. The total square footage is comprised of
948,103+/- square feet of office space, 17,070+/- square feet of retail space
and 19,274+/- square feet of basement space. This 43-story office building
currently has a 1.9% vacancy rate. The asking rents in the subject are
approximately $33.00 to $37.00 per square foot plus an electric charge.
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Neighborhood Analysis
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Competitive Property #1
Location: 633 Third Avenue
Year Built: 1960
No. of Floors: 41
Rentable Area
Office: 948,000 SF
Retail/Basement: 70,735 SF
Total: 1,018,735 SF
Office Area Available (All Direct): 163,423
Office Vacancy Rate: 17.24%
Typical Floor Size
Minimum: 17,800+/- SF
Maximum: 45,400+/- SF
Asking (Face Rates)
Office: $29.00 - $36.75
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
This property is a 41-story, 1,018,735+/- square foot. Approximately
163,423+/- square feet of the total rentable office area is available, yielding
a vacancy rate of 17.24%. Asking average rent ranges from $29.00 to $36.75 per
square foot. The electric is submetered. This property as been converted to
condominium ownership. Overall, this property is considered inferior to 605
Third Avenue.
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Neighborhood Analysis
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Competitive Property #2
Location: 150 East 42nd Street
Year Built: 1956
No. of Floors: 42
Rentable Area
Office: 1,346,822 SF
Retail: 33,100 SF
Total: 1,379,922 SF
Office Area Available (All Direct): 119,439 SF
Office Vacancy Rate: 8.87%
Typical Floor Size
Minimum: 22,300 SF
Maximum: 93,800 SF
Asking (Face Rates)
Office: $29.00 - $41.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
150 East 42nd Street is a 42-story office building featuring 1,346,822+/-
square feet of office space. The property features limited retail space totaling
33,100+/- square feet. As of July 30, 1997, there was 119,439+/- square feet of
total office availability in the building, indicating a vacancy rate of 8.87%.
The asking rent in this building ranges from $29.00 to $41.00 per square foot,
and the electric is directly metered.
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Neighborhood Analysis
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Competitive Property #3
Location: The Kent Building
666 Third Avenue
Year Built: 1951
No. of Floors: 35
Rentable Area
Office: 426,725 SF
Total: 426,725 SF
Office Area Available (All Direct): 206,715 SF
Office Vacancy Rate: 48.44%
Typical Floor Size
Minimum: 9,300 SF
Maximum: 32,000 SF
Asking (Face Rates)
Office: $30.00 - $34.00
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The Kent Building is a 426,725 square foot, 35-story office building
which, according to Cushman & Wakefield, was 48.44% vacant as of July 30, 1997.
The estimated asking rates for this property range from $30.00 to $34.00 per
square foot plus an electric charge of approximately $3.00 per square foot.
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Neighborhood Analysis
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Competitive Property #4
Location: 675 Third Avenue
Year Built: 1964
No. of Floors: 37
Rentable Area
Office: 265,411 SF
Retail: 9,640 SF
Total: 275,051 SF
Office Area Available (All Direct): 64,469 SF
Office Vacancy Rate: 24.3%
Typical Floor Size
Minimum: 7,300 SF
Maximum: 16,300 SF
Asking (Face Rates)
Office: $32.00 - $34.00
N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
This 37-story building was constructed in 1964 and features 275,051+/-
total square feet of space. Approximately 97% of the space is for office use,
with retail space comprising only 9,640 square feet. 675 Third Avenue was 24.3%
vacant as of July 30, 1997. Current asking rates range from $32.00 to $34.00 per
square foot plus an electric charge of $2.90 per square foot.
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Neighborhood Analysis
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Competitive Property #5
Location: 711 Third Avenue
Year Built: 1956
No. of Floors: 19
Rentable Area
Office: 431,000 SF
Retail: 25,000 SF
Total: 456,000 SF
Office Area Available (All Direct): 101,221 SF
Office Vacancy Rate: 23.5%
Typical Floor Size
Minimum: 14,200 SF
Maximum: 45,600 SF
Asking (Face Rates)
Office: $31.00
N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The building at 711 Third Avenue was built in 1956 and features 19
stories. This 431,000+/- square foot office building also features 25,000+/-
square feet of retail space. The office space is renting on average for $31.00
per square foot and the electric is directly metered. The office vacancy rate
for the building was estimated to be 23.5% as of July 30, 1997.
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Neighborhood Analysis
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Competitive Property #6
Location: The Sun America Building
733 Third Avenue
Year Built: 1961
No. of Floors: 24
Rentable Area
Office: 366,002 SF
Retail: 16,214 SF
Total: 382,216 SF
Office Area Available (All Direct): 6,877 SF
Office Vacancy Rate: 1.88%
Typical Floor Size
Minimum: 6,400 SF
Maximum: 26,900 SF
Asking (Face Rates)
Office: N/A
N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The Sun America Building features 366,022+/-square feet of office space
and 16,214+/-square feet of retail space. As of July 30, 1997, the building was
98.2% occupied. The 24-story building was built in 1961 and features floor sizes
ranging from 6,400 square feet to 26,900 square feet.
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Neighborhood Analysis
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Competitive Property #7
Location: Teachers Insurance Building
730 Third Avenue
Year Built: 1958
No. of Floors: 28
Rentable Area
Office: 407,000 SF
Retail: 16,000 SF
Total: 423,000 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0.0%
Typical Floor Size
Minimum: 7,200 SF
Maximum: 13,000 SF
Asking (Face Rates)
Office: N/A
N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The Teachers Insurance Building was built in 1958 and contains 28 stories.
The building contains 407,000+/-of office space and 16,000+/-square feet of
retail space.
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Neighborhood Analysis
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Competitive Property #8
Location: 750 Third Avenue
Year Built: 1958
No. of Floors: 34
Rentable Area
Office: 686,356 SF
Retail: 30,000 SF
Total: 716,356 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0.0%
Typical Floor Size
Minimum: 9,700 SF
Maximum: 38,900 SF
Asking (Face Rates)
Office: N/A
N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
750 Third Avenue is a 716,356+/- square foot, 34-story office building
that features 30,000+/- square feet of retail space and 686,356+/- square feet
of office space. The building was built in 1958 and as of July 30, 1997, the
building was 100% occupied.
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Neighborhood Analysis
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Competitive Property #9
Location: 747 Third Avenue
Year Built: 1972
No. of Floors: 38
Rentable Area
Office: 344,965 SF
Retail: 16,000 SF
Total: 360,965 SF
Office Area Available (All Direct): 36,835 SF
Office Vacancy Rate: 10.6%
Typical Floor Size
Minimum: 1,200 SF
Maximum: 16,400 SF
Asking (Face Rates)
Office: $33.00 - $36.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
The building at 747 Third Avenue is a 360,965+/- square foot, 38-story
office building built in 1972. It contains 344,965+/- square feet of office
space, and 16,000 square feet of retail space. As of July 30, 1997, there was
36,835+/- available square feet of office space with asking rents ranging from
$33.00 to $36.00 per square foot. The building's electric charges range from
$2.75 to $3.00 per square foot.
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Neighborhood Analysis
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Competitive Property #10
Location: 845 Third Avenue
Year Built: 1963
No. of Floors: 21
Rentable Area
Office: 313,093 SF
Total: 313,093 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0
Typical Floor Size
Minimum: 4,500 SF
Maximum: 22,500 SF
Asking (Face Rates)
Office: $29.00
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
845 Third Avenue is a 313,093+/- square foot Midtown office building with
21 stories. The building contains no retail space. This building was fully
occupied as of July 30, 1997.
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Neighborhood Analysis
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Competitive Property #11
Location: The MacMillan Building
866 Third Avenue
Year Built: 1966
No. of Floors: 31
Rentable Area
Office: 454,000 SF
Retail: 20,000 SF
Total: 474,000 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0
Typical Floor Size
Minimum: 7,600 SF
Maximum: 27,200 SF
Asking (Face Rates)
Office: $33.00 - $39.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
This 31-story building contains 454,000+/- SF of office space and
20,000+/- SF of retail space.
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Neighborhood Analysis
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Competitive Property #12
Location: 875 Third Avenue
Year Built: 1982
No. of Floors: 29
Rentable Area
Office: 662,588 SF
Retail: 5,000 SF
Total: 667,588 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0
Typical Floor Size
Minimum: 21,800 SF
Maximum: 29,000 SF
Asking (Face Rates)
Office: N/A
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
875 Third Avenue is a 662,588+/-square foot building with 29 stories. The
building was built in 1982. As of July 30, 1997, according to the Cushman &
Wakefield Combined Building and Space Survey, there is no space available.
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Neighborhood Analysis
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Competitive Property #13
Location: Fifty Third at Third
885 Third Avenue
Year Built: 1986
No. of Floors: 34
Rentable Area
Office: 581,339 SF
Retail: 18,809 SF
Total: 600,148 SF
Office Area Available (All Direct): 0 SF
Office Vacancy Rate: 0%
Typical Floor Size
Minimum: 12,500 SF
Maximum: 29,000 SF
Asking (Face Rates)
Office: $43.00 - $44.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
885 Third Avenue was constructed in 1986. The building features 600,148
square feet of total space, 581,339 square feet of office space, with the
remainder being retail space.
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Neighborhood Analysis
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Competitive Property #14
Location: 909 Third Avenue
Year Built: 1968
No. of Floors: 33
Rentable Area
Office: 1,125,000 SF
Retail: 30,000 SF
Total: 1,155,000 SF
Office Area Available (All Direct): 50,120+/- SF
Office Vacancy Rate: 4.46%
Typical Floor Size
Minimum: 29,300 SF
Maximum: 30,200 SF
Asking (Face Rates)
Office: $28.00 - $40.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
909 Third Avenue was constructed in 1968. The building features
1,155,000+/- square feet of total space, 1,125,000 square feet of office space,
with the remainder being retail space. As of July 30, 1997, there were 50,120+/-
square feet available, according to Cushman & Wakefield's Market Research.
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Neighborhood Analysis
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Competitive Property #15
Location: 919 Third Avenue
Year Built: 1970
No. of Floors: 47
Rentable Area
Office: 1,152,000 SF
Total: 1,152,000 SF
Office Area Available (All Direct): 594,192 SF
Office Vacancy Rate: 51.6%
Typical Floor Size
Minimum: 21,700 SF
Maximum: 43,700 SF
Asking (Face Rates)
Office: $29.00 - $38.00
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
919 Third Avenue was constructed in 1970. The building features
1,152,000+/- square feet of total space, all of which is office space. As of
July 30, 1997, there was an availability of 594,192+/- square feet, according to
Cushman & Wakefield's Market Research. A major block of office space has become
available in this building since Skadden, Arps has signed a lease for space in 4
Times Square.
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Neighborhood Analysis
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Competitive Property #16
Location: 900 Third Avenue
Year Built: 1983
No. of Floors: 36
Rentable Area
Office: 515,200 SF
Retail: 7,500 SF
Total: 522,700 Sf
Office Area Available (All Direct): 45,432 SF
Office Vacancy Rate: 8.82%
Typical Floor Size
Minimum: 3,100 SF
Maximum: 16,000 SF
Asking (Face Rates)
Office: $35.00 - $37.00`
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
900 Third Avenue was constructed in 1983. The building features 522,700+/-
square feet of total space, 515,200+/- square feet of office space, with the
remainder being retail space. As of July 30, 1997, there were 45,432+/- square
feet of office space available, according to Cushman & Wakefield's Market
Research.
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Neighborhood Analysis
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Competitive Property #17
Location: 599 Lexington Avenue
Year Built: 1986
No. of Floors: 47
Rentable Area
Office: 955,274 SF
Retail: 13,525 SF
Total:
Office Area Available (All Direct): 0
Office Vacancy Rate: 0
Typical Floor Size
Minimum: 7,600 SF
Maximum: 29,900 SF
Asking (Face Rates)
Office: $45.00 - $47.00
Retail: N/A
Operating Expenses: Direct pass through
Real Estate Taxes: Direct pass through
Comments:
599 Lexington Avenue was constructed in 1986. The building features
968,799+/-square feet of total space, 620,000 square feet of office space, with
the remainder being retail space.
The Competitive Office Building Summary Chart summarizing the comparable
building office market statistics can be found on the following facing page. It
should be noted that any sublease space with less than a ten year lease and
below grade commercial space asking rents were disregarded in terms of this
survey. Additionally, the vacancy rates listed are based on the most current
listings available as of July 30, 1997. Lastly, the vacancy rates detailed are
strictly office vacancy space rates and do not include any retail space
(available or in total inventory).
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Neighborhood Analysis
================================================================================
The overall comparable office buildings featured in the survey range in
age from 1951 to 1986. The various buildings range in stories from 19 to 77
floors. The comparable property with the smallest rentable office space is the
building at 675 Third Avenue with an estimated 265,411+/- square feet of total
office space. 150 East 42nd Street, offers the largest rentable office space
with approximately 1,346,822+/- square feet. Average asking rents within the
subject's overall competitive market range from $28.00 to $47.00 per square
foot. Based on the competitive office market summary, the overall market
featured an estimated 11,928,000+/- square feet of total office inventory. The
overall market, as of July 30, 1997 featured approximately 1,444,000+/- square
feet of available office space. This equates to an overall office vacancy rate
of 12.1 percent.
Several recent lease transactions have been signed in 150 East 42nd
Street. This structure which is Mobil Oil's former headquarters, is reported to
be in fair condition. The larger floor plates, ranging between 50,000 square
feet and 93,000 square feet, are difficult to subdivide and appeal to large
tenants.
The MacMillan Building, 866 Third Avenue, currently has 435,000+/- square
feet available for rent. Although the floor plates within this structure range
in size between 12,000+/- square feet and 28,000+/- square feet, ownership is
interested only in leasing to 150,000 square feet to 200,000 square feet
tenants. This strategy coupled with the floor sizes and a fair reputation within
this market have contributed to a slow lease-up of the space.
The subject fares well against the properties with which it is most
competitive. The subject has a very convenient location for both public
transportation and private automobile. In addition, 605 Third Avenue remains in
superior condition both structurally and mechanically and offers excellent
southerly views.
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PROPERTY DESCRIPTION
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Site Description
Property: 605 Third Avenue
New York, New York
Location: The site is located on the easterly blockfront of
Third Avenue between East 39th Street and East
40th Street.
Shape: Irregular
Site Area: 71,210+/- square feet
Frontage: 197 feet 6 inches on Third Avenue
359 feet 7 inches on East 39th Street
361 feet on East 40th Street
Topography/Terrain: The site is level at street grade.
Street Improvements: Curbing, sidewalks and street lighting.
Access: Pedestrian access to the building is available via
entrances on Third Avenue, East 39th Street and
East 40th Street. Vehicular access is available to
the garage from East 39th Street and East 40th
Street.
Site Disclaimers
Soil Conditions: We did not receive nor review a soil report.
However, we assume that the soil's load-bearing
capacity is sufficient to support the existing
structure. We did not observe any evidence to the
contrary during our physical inspection of the
property. The tract's drainage appears to be
adequate.
Utilities
Water: City of New York
Sewer: City of New York
Electricity: Consolidated Edison
Steam Heat: Consolidated Edison
Telephone: NYNEX
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Property Description
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Land Use Restrictions: We were not given a title report to review. We do
not know of any easements, encroachments, or
restrictions that would adversely affect the
site's use. However, we recommend a title search
to determine whether any adverse conditions exist.
Flood Hazard: According to Community Panel No. 360497-0039B,
National Flood Insurance Rate Map, effective
November 16, 1983, the subject property is in
Flood Hazard Zone C and, therefore, does not
require flood hazard insurance.
Wetlands: We were not given a Wetlands survey. However, it
appears that the site is not encumbered by
regulated wetlands.
Site Improvements: The site is improved with an office tower and a
parking garage.
Comments: Overall, the site was found to be a functional
parcel, well suited for its existing use and
typical of this area.
Hazardous Substances: Asbestos containing materials have been removed
from mechanical rooms and VAT flooring on floors
that have been rebuilt over the past ten years.
VAT remains under carpet on some floors. There is
ACM fireproofing in some elevator shafts and
insulation on some pipes in steam shafts.
Improvements Description
The improvements consist of a 43-story and basement, Class A office tower
containing a total rentable area of 984,447+/- square feet completed in 1963.
The improvements provide for office space in the above-grade areas, retail space
on the ground level and a parking garage. The following description of the
improvements is based upon our physical inspection of the property along with
our discussions of the property with the ownership and management.
General Description
Year Built: 1963
Building Area
Rentable Area: 984,447+/- SF
Building Height: 43 stories plus basement
Building Efficiency: 23 percent loss factor
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Property Description
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Construction Detail:
Foundations: Foundations rest on bedrock and appear to be
constructed of poured concrete.
Framing: Framing throughout the property is structural
steel
Column Spacing: Columns are spaced 23 feet on center
Ceiling Heights: Ceiling heights throughout the property are 11
feet 4 inches from slab to slab. This accommodates
a dropped acoustical ceiling of 8-1/2 feet.
Floors: Poured concrete
Exterior Walls: The exterior curtain wall is finished with
aluminum and three-eighths inch spandrel glass
with insulated aluminum black panels. The glass is
shaded black, transparent only from the inside.
Roof Cover: The roof is rubberoid membrane and built-up
composition with pebble covering. The roof was
replaced in 1989-1990.
Windows: The windows throughout the property are fixed
glass in aluminum frames.
Pedestrian Doors: The pedestrian doors are a combination of
revolving glass and swinging glass doors in
aluminum frames.
Loading Doors: There is a loading dock on East 40th Street
utilized by the retail tenant. It is an exterior
dock with a steel structural overhead door. There
is an exterior loading dock on East 39th Street
with a swinging door and two overhead doors for
the building.
Mechanical Detail
Heating and Cooling: Heating to the property is provided by
Consolidated Edison steam. Steam is distributed
through the property via an interior/perimeter
heating system. All mechanical equipment is
located in the basement area and on mechanical
floors which are located on part of the 7th and
part of the 28th floors. Cooling to the property
is provided by chillers operated by steam from Con
Edison steam. The cooling towers which service the
property are located on the roof.
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Property Description
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Plumbing: Plumbing throughout the property appears to be in
adequate condition and is appropriate for the
existing and expected future use of the property.
Electrical: All wiring in the switchboard rooms is assumed to
be to building code standards.
Elevator Service: There are five elevator banks. These banks service
the building as follows: 1) Floors 2-7; 2) Floors
7-12; 3) Floors 14-24; 4) Floors 24-33; 5) Floors
34-44. In addition, there are two freight
elevators which service all floors. The elevator
systems appear to be adequate in number for a
structure of this size and appear to be in
excellent condition. In 1989, the passenger cars
were upgraded with new SCR controllers.
Security/Fire
Protection: The property is in full compliance with Local Law
No. 5/73. The property is partially sprinklered,
compartmentalized and contains elevator recall,
computer alarm and speaker control systems.
Interior Detail
Floors: The finished floors vary from level to level and
from tenant to tenant. Generally, the elevator
lobbies are finished with wood floors, stone tiled
floors or are carpeted. Tenants which occupy full
floors have installed very high quality grade
finishes.
Ceiling: Ceilings throughout the property are suspended
acoustical tile. Generally, the acoustical tile is
suspended 12 inches below the concrete slab. This
area is generally filled with duct work and
wiring.
Walls: Walls throughout the floors are sheetrock over
metal studs. Generally, the sheetrock walls are
painted or are treated with various wall
coverings.
Lighting: A combination of fluorescent and incandescent
fixtures.
Restrooms: Each floor is equipped with a men's and a women's
restrooms in a central location. The restrooms are
fully equipped. Many of the restroom areas
throughout the building have been renovated.
Americans With Compliance with these regulations is being met as
Disabilities Act floors are being rebuilt.
Compliance:
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Property Description
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Site Improvements
On-Site Parking: The parking garage structure has a capacity of 750
cars.
Condition: Excellent
Comments: The quality of the subject improvements is rated
to be very good, the layout and functional plan
are considered to be excellent. The building was
completed in 1963 and has undergone periodic
renovations and mechanical overhauls including a
full lobby renovation in 1985. The normal life
expectancy of this type of building is 45 years.
Its effective age is estimated to be 20 years,
therefore, its estimated remaining economic life
is 25 years.
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REAL PROPERTY TAXES AND ASSESSMENTS
================================================================================
The 1997/98 assessment for the property is as follows:
Actual Transitional
Land $27,000,000 $19,800,000
Improvements $55,350,000 $56,430,000
Total $82,350,000 $76,230,000
Tax Rate $10.072/$100 of Assessed Value
Taxes $ 7,677,885.60 $7.80/SF
Plus: Business Improvement
District Tax $ 164,429
Total $ 7,842,314.60 $7.97
Real estate taxes in New York City are normally the product of the
transitional assessed value times the tax rate, for the fiscal year July 1
through June 30 (payable July 1 and January 1). The transitional assessed value
is based on a five year phase-in of actual assessed value. If the actual
assessed value is lower than the transitional assessed value for that year, the
actual assessed value is multiplied by the tax rate to determine the tax.
In the case of the subject property, the 1997/98 actual assessed value is
greater than the transitional assessed value. This has been the case for the
previous four tax assessment years, as illustrated below.
<TABLE>
<CAPTION>
============================================================================================
Historical Tax Assessments and Payments (Excluding Bid Tax)
============================================================================================
Total
Transitional
Total Taxable Assessment Tax Rate Per $ Amount Per
Tax Year Assessment (000) (000) $100 Taxes Owed Sq. Ft.
============================================================================================
<S> <C> <C> <C> <C> <C>
1994/95 $71,100 $64,710 $10.608 $6,864,437 $6.97
- --------------------------------------------------------------------------------------------
1995/96 $81,000 $68,580 $10.402 $7,133,692 $7.25
- --------------------------------------------------------------------------------------------
1996/97 $81,450 $74,160 $10.252 $7,602,883 $7.72
- --------------------------------------------------------------------------------------------
1997/98 $82,350 $76,230 $10.072 $7,677,855 $7.80
============================================================================================
</TABLE>
Our tax projection (including Bid Tax) for the 1997 calendar year,
therefore, is based upon the 1996/97 and 1997/98 actual assessments for calendar
year 1997 as follows:
1996/97 Fiscal Taxes $7,772,732 @ 50% = $3,886,366
1997/98 Fiscal Taxes $7,842,315 @ 50% = $3,921,158
----------
1997 Calendar Year Taxes $7,807,524
In an effort to evaluate the fairness of the subject's current assessed
value and future prospects for a change in the assessment, we have 1) compared
the most recent assessments (land and building) to that of other similar
properties, 2) compared the assessment to the market value estimate concluded in
this report, and 3) considered the potential for future changes in the assessed
value of the subject property.
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Real Property Taxes And Assessments
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Listed below is a summary chart of the 1997/98 assessments for the subject
and three properties considered to have varying degrees of comparability to the
subject property.
<TABLE>
<CAPTION>
====================================================================================================================================
Year Total Rentable Total Assessed Assessment Per
No. Property Built Area Value Sq. Ft.
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Subject 605 Third Avenue 1963 984,447 $82,350,000 $83.65
- ------------------------------------------------------------------------------------------------------------------------------------
1. 90 Park Avenue 1963 895,325 $62,316,000 $69.60
- ------------------------------------------------------------------------------------------------------------------------------------
2. 730 Third Avenue 1959 596,500 $38,250,000 $64.12
- ------------------------------------------------------------------------------------------------------------------------------------
3. 100 Park Avenue 1950 778,183 $55,428,000 $71.23
- ------------------------------------------------------------------------------------------------------------------------------------
4. 335 Madison Avenue 1982 874,734 $75,150,000 $85.91
- ------------------------------------------------------------------------------------------------------------------------------------
5. 750 Third Avenue 1957 761,057 $53,590,000 $70.41
====================================================================================================================================
</TABLE>
Our survey of the subject and comparable office buildings, which contain
primarily office space, indicates assessments ranging from $64.12 to $85.91 per
square foot. The average assessments of the five comparables, excluding the
subject, is $72.25 per square foot. This compares with the subject assessment of
$83.65 per square foot which is toward the upper end of this range of
assessments per square foot.
As will be discussed later within this report, we have concluded at a
market value of $180,000,000 for the subject property. The 1997/98 actual
assessed value of $82,350,000 is equivalent to 45.75 percent of market value.
This assessment/sale price ratio is within the range of the ratios found for
standard office buildings in the marketplace. In addition, in light of the
property's income and expenses, as well as our analysis of the tax comparables,
leads us to believe that the subject property's current taxable assessment is
reasonable. It is important to note that the ownership is actively pursuing a
reduction in the current assessment with the City Tax Commission and the
Assessor. Projected cash flow has stabilized and there are no large increases in
Net Operating Income and Cash Flow over the projection period (refer to Annual
Cash Flow Report). Therefore, we have adopted an average growth rate of 2 1/2%
per year as applied to real estate taxes.
Conclusion of Future Real Estate Taxes
As previously noted, based upon a declining tax base and increased
government spending, we expect overall tax rates to increase over the next
several years. Historically, the commercial tax rate in New York City has
increased an average of 1.51 percent per annum compounded from the 1989/90 tax
year to the 1997/98 tax year as exhibited on the following chart. During the
1996/97 and 1997/98 tax years, the tax rate has decreased approximately 1.5
percent per annum.
================================================================================
1989/90 $ 9.539
- --------------------------------------------------------------------------------
1990/91 $ 9.924
- --------------------------------------------------------------------------------
1991/92 $10.631
- --------------------------------------------------------------------------------
1992/93 $10.698
- --------------------------------------------------------------------------------
1993/94 $10.724
- --------------------------------------------------------------------------------
1994/95 $10.608
- --------------------------------------------------------------------------------
1995/96 $10.402
- --------------------------------------------------------------------------------
1996/97 $10.252
- --------------------------------------------------------------------------------
1997/98 $10.072
================================================================================
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Real Property Taxes And Assessments
================================================================================
Based upon the current taxable assessment and the 1997/1998 tax rate, the
current calendar year taxes are $7,807,524. Therefore, we have assumed that
total tax increases will be limited to 2 1/2% per annum.
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ZONING
================================================================================
According to Map 8d, published by the New York City Planning Commissions,
there are two zoning districts which cover the subject property. The portion of
the property situated on Third Avenue, extending to a depth of 200 feet is
located in a C5-3 district, while the remainder of the site is located in a C1-9
zoning district. This district is identified as a General Central Commercial
District.
These districts are designed to provide for office buildings and a great
variety of large retail stores and related activities which occupy the
prime retail frontage in the Central Business District, and which serve
the entire metropolitan region. The district regulations also permit a few
high/value custom manufacturing establishments which are generally
associated with the predominant retail activities, and which depend on
personal contacts with persons living all over the region. The district
regulations are also designed to provide for continuous retail frontage.
The C5-3 zoning district allows for a floor area ratio of 15 times the
site area. Therefore, the subject property has a zoning floor area of 592,500+/-
square feet without the consideration of any bonusable areas that might be
available. The rear portion of the site is restricted to a zoning floor area of
63,420 for retail/commercial use and 317,100+/- square feet for residential use.
The subject property contains a rentable area of 984,447+/- square feet and
accordingly, is non-conforming with regard to building bulk. However, the
subject property was constructed in 1963 and predates the current zoning
statues. Therefore, the subject property is a legal, non-conforming use which
appears to satisfy the zoning regulations in all other matters. Permitted uses
in the C5 designation include light manufacturing buildings, commercial office
buildings and residential buildings. Retail uses are permitted on the site.
We know of no deed restrictions, private or public, that further limit the
subject property's use. The research required to determine whether or not such
restrictions exist, however, is beyond the scope of this appraisal assignment.
Deed restrictions are a legal matter and only a title examination by an attorney
or title company can usually uncover such restrictive covenants. Thus, we
recommend a title search to determine if any such restrictions do exist.
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HIGHEST AND BEST USE
================================================================================
According to the Dictionary of Real Estate Appraisal, Third Edition
(1993), a publication of the Appraisal Institute, the highest and best use is
defined as:
The reasonable probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported, financially
feasible, and that results in the highest value. The four criteria the highest
and best use must meet are legal permissibility, physical possibility, financial
feasibility, and maximum profitability.
As Vacant
Our initial consideration of the subject site as vacant concerns the land
uses which are physically possible on the subject parcel. The subject site
contains an area of 71,210+/- square feet of land with excellent frontage on the
Third Avenue, East 39th Street and East 40th Street. The size and the
configuration of the site are felt to provide a suitable land use or development
potential for a wide variety of possible as well as typical Midtown land uses.
Access and exposure are felt to be excellent for office use. Municipal utilities
would adequately provide for all conceivable uses. Street improvements are also
adequate. Therefore, the physical characteristics of the site provide for a wide
range of potential land uses.
Secondly, we must consider the land uses which were legally permissible
based upon the prevailing zoning and land use ordinances. The subject's zoning
classification permits development of office, retail and service related uses.
Office uses are consistent with the overall development of the area.
Finally, we have considered the possible land uses which would be
financially feasible and which would produce the highest net return to the land.
As noted in our discussion, office uses felt to be the most appropriate land use
for the subject. Vacancy rates in Midtown Manhattan are such that it is likely
that a developer would look for improvement in the market prior to undertaking a
major development of this kind. However, the Midtown market has been a very
strong and active one, and the Grand Central District has been the focus of a
great deal of leasing activity in the last 24 months. Therefore, it is likely
that at some point, a major office user would show significant interest in
improving the site with Class A office space.
Based upon the above, we conclude that the highest and best use of the
site, as vacant is for a Class A office building, once market conditions would
support a development of this size.
As Improved
Unlike the previous analysis of the site as vacant, this analysis
considers the subject property as currently improved with an evaluation of the
physical, legal and financial appropriateness of the existing land use.
Relative to physical considerations, the subject site is improved with an
existing office structure, and based upon our observations, there are no
apparent physical factors, such as soil, drainage, or other site characteristics
which would adversely affect the continued utility or existence of the subject
improvements.
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Highest and Best Use
================================================================================
In relation to the legal considerations, the subject site, as presently
improved, represents a legal non-conforming use. Finally, in consideration of an
appropriately supported and financially feasible land use, the use of the
subject improvement is considered to contribute in an economic manner to the
subject site. Occupancy at the subject has been strong and continues to exceed
95 percent. In the foreseeable future, this will produce a level of return which
is consistent with investment grade real estate. Therefore, based upon the
subject's historical high performance and overall character, and the likelihood
of continued high occupancy, it is our opinion that the highest and best use of
the property, as improved is a commercial office building.
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VALUATION PROCESS
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Appraisers typically use three approaches in valuing real property: the
Cost Approach, the Income Approach, and the Sales Comparison Approach. The type
and age of the property and the quantity and quality of data affect the
applicability of each approach in a specific appraisal situation.
Sales of existing properties similar to the subject are available for our
analysis, and we can use information from these sales along with other market
information to value the subject using the Sales Comparison and Income
Approaches. We believe a discounted cash flow analysis is more appropriate
because it is most widely used by investors in the current marketplace.
The Cost Approach is not considered in the valuation of the subject
property. The investment marketplace does not typically trade leased office
buildings on a cost/value basis, particularly in markets where it is generally
perceived that costs significantly exceeds value. In addition, the subjectivity
of accurately estimating accrued depreciation involving existing improvements
significantly limits the reliability of this approach.
We concluded the appraisal process by reviewing each of the approaches to
value. We considered the type and reliability of data and the applicability of
each approach. Finally, we reconciled the approaches and estimated the final
value.
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SALES COMPARISON APPROACH
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Methodology
In the Sales Comparison Approach, we estimated value by comparing this
property with similar, recently sold properties in the surrounding or competing
area. Inherent in this approach is the principle of substitution, which holds
that when a property is replaceable in the market, its value tends to be set at
the cost of acquiring an equally desirable substitute property, assuming that no
costly delay is encountered in making the substitution.
By analyzing sales that qualify as arms-length transactions between
willing and knowledgeable buyers and sellers, we can identify value and price
trends. The basic steps of this approach are:
1. research recent, relevant property sales and current offerings
throughout the competitive area;
2. select and analyze properties that are similar to the property
appraised, considering changes in economic conditions that may have
occurred between the sale date and the date of value, and other
physical, functional, or locational factors;
3. identify sales that include favorable financing and calculate the
cash equivalent price;
4. reduce the sale prices to a common unit of comparison such as price
per square foot of net rentable area, effective gross income
multiplier, and overall capitalization rate;
5. make appropriate comparative adjustments to the prices of the
comparable properties to relate them to the property being
appraised; and
6. interpret the adjusted sales data and draw a logical value
conclusion.
The most widely-used and market-oriented unit of comparison for properties
such as the subject is the sale price per square foot. All comparable sales were
analyzed on this basis. On the following page is a summary of the improved, sold
properties that we compared with the subject property. Also exhibited within
this section is a chart which summarizes important statistics of the
comparables.
Over the past 12 months, the Midtown Manhattan office market has shown
signs of significant improvement. Rents and concession packages have stabilized
as positive net absorption has taken place in the market. In terms of the
investment market, upward pressure on rent levels and decreased availability of
good quality office space has stimulated demand for space from large users and
others who have decided to purchase rather than lease.
There have been seven recent sales of Manhattan office buildings which are
pertinent to the valuation of the subject property. All are primary Class A
structures located in the Midtown Manhattan. Two of the seven represent sales to
owner users, while the balance have been purchased by American investors and
real estate investment trusts. We have included a summary chart on these sales
which is shown on the facing page.
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Improved Property Sales Map
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Sales Comparison Approach
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Analysis of Sales
Comparable Sale No. 1 is the American Home Products building located at
685 Third Avenue between East 43rd Street and East 44th Street. The property was
conveyed in June 1997 under the terms of a contract signed on that date. The
seller was Professional Data Management, Inc. (Leucadia National) and the buyer
was Amroc/Black Acre Group (Jeff Sitron). The purchase price was $100,000,000.
It is reported that the property was 34 percent occupied as of the date of sale.
685 Third Avenue is comprised of two interconnected buildings which contain
240,000 square feet in the southern tower built in 1961 and 355,000 square feet
in the northern tower built in 1976. It is reported that the property requires
significant alteration. Furthermore, the purchaser intends to begin a leasing
program for the balance of the building. The sale price indicates a unit value
of $171.13 per square foot.
Comparable Sale No. 2 is located at 31 West 52nd Street between Fifth
Avenue and Sixth Avenue. The property was conveyed in March 1997. The purchase
price was reported to be $278,000,000. The seller was 40 West 53 Partnership (G.
Heinz/Kuwaiti Investors). The buyer was Deutsche Bank, AG. Deutche Bank is the
primary building occupant under a long term lease which, reportedly reflects
significantly above market lease terms. The property is a 30-story Class A
office building constructed in 1986 containing a rentable area of 659,724+/-
square feet. The property has a 120 space parking garage located in the
basement. The condition of the property is considered to be excellent. The site
area of this property is 45,868+/- square feet. The sale indicates a unit value
of $421.39 per square foot.
Comparable Sale No. 3 is located at 90 Park Avenue. This property is
situated between East 39th Street and East 40th Street. The sale occurred in
April 1997. The seller was Sumitomo, the buyer was Vornado Realty (Steven Roth).
The purchase price was $185,000,000. The property is comprised of a 41-story
Class A office building constructed in 1964 with a rentable area of 877,869+/-
square feet and a parking garage in the basement containing 156 spaces.
According to a realtor familiar with the transaction, the property was 82.7
percent occupied at the time of sale and reflected a net operating income of
$22.33 per square foot. The buyers purchased mortgages which encumbered the
property following a threat of foreclosure by Sumitomo. The price indicates a
unit value of $210.74 per square foot. The net operating income indicates an
overall capitalization rate of 10.6 percent.
Comparable Sale No. 4 is located at 1370 Avenue of the Americas, located
between West 55th Street and West 56th Street. The transaction occurred in March
1997. The seller was St. Andrews Associates (Peter Sharp) and the buyer was S.L.
Green Real Estate (Steven Green). The purchase price was $55,000,000. The
property is comprised of a 35-story office building constructed in 1971. The
property is situated on a site which contains 15,276+/- square feet and a
rentable area of 381,345+/- square feet. The sale price indicates a unit value
of $144.23 per square foot of building area.
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Sales Comparison Approach
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Comparable Sale No. 5 is located at 527 Madison Avenue on the southeast
corner of East 45th Street. The sale occurred in February 1997. The seller was
527 Madison Holding (Louis Dreyfuss Property Group) and the buyer was
Cornerstone Properties (Scott Darymple). The purchase price was $67,000,000. The
property is comprised of a 26-story Class A office building built in 1986 and
containing a rentable area of 201,148+/- square feet. The site area is 12,675
square feet. At the time of sale, the property was 88 percent occupied and
reflected a net operating income of $36.44 per square foot. According to our
information, the anchor tenant within the building is a Japanese bank which
occupy space under a lease which will expire in 2001. The lease terms are
reported to be above market and, therefore, the indicated net operating income
is likely to decrease in the future. The purchase price indicates a unit value
of $333.09 per square foot and an overall capitalization rate of 10.94 percent.
Comparable Sale No. 6 is known as the Continental Can building located at
125 Park Avenue between East 41st Street and East 42nd Street. The sale occurred
in January 1997, the seller was Sutom N.V. and the buyer was General Electric
Capital Corp. The sale price was reported to be $92,652,000. The property is
comprised of a 26-story office building constructed in 1922 and containing a
rentable area of 445,437+/- square feet. This sale occurred following a
foreclosure of the property. The purchaser is one of the property's major
tenants. The purchase price indicates a unit value of $208.00 per square foot.
Comparable Sale No. 7 is known as the NBC Condominium located at 30
Rockefeller Plaza. This property is part of Rockefeller Center. The transaction
date was July 1996. The seller was RCP Associates (Tishman Speyer Properties,
LP), the buyer was NBC Trust 1996A (National Broadcasting Corp.). The
transaction price was $440,000,000. The property is comprised of a 70-story
structure built in 1932 and containing a rentable area of 2,700,000 square feet.
The NBC Condominium is comprised of a condominium unit which consists of
1,561,277+/- square feet. The purchase price indicates a unit value of $281.82
per square foot of rentable area.
The seven comparable sales indicate a range in unit value of from $144.23
per square foot to $421.39 per square foot. The median sale price is $210.74 per
square foot and the average sale price is $252.91 per square foot. The most
applicable sales in terms of location and character, are Sale No. 1 - 685 Third
Avenue, Sale No. 3 - 90 Park Avenue and Sale No. 6-125 Park Avenue. These sales
ranged between $144.23 per square foot and $210.00 per square foot. 31 West 52nd
Street reflects the sale of a new Class A building in the Plaza District which
is subject to an above market lease. In addition, this property was purchased by
the buildings' primary occupant. Sale No. 5, 527 Madison Avenue reflects the
economics of a property leased somewhat above market, reflecting an overall rate
which contemplates a decline in net operating income upon the expiration of
existing leases within the property.
Based upon our analysis, we conclude that an appropriate range in market
value for the subject property is $175.00 to $185.00 per square foot of rentable
area. This indicates a range in value for the subject property of $172,000,000
to $182,000,000. We have concluded with a value toward the upper end of the
range in order to reflect a good location, the excellent condition and
stabilized occupancy of the subject. Therefore, the conclusion of value as
indicated by the Sales Comparison Approach is $180,000,000.
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INCOME CAPITALIZATION APPROACH
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The Income Approach is a method of converting the anticipated economic
benefits of owning property into a value estimate through capitalization. The
principle of "anticipation" underlies this approach in that investors recognize
the relationship between an asset's income and its value. In order to value the
anticipated economic benefits of a particular property, potential income and
expenses must be estimated, and the most appropriate capitalization method must
be selected.
The two most common methods of converting net income into value are direct
capitalization and discounted cash flow analysis. In direct capitalization, net
operating income is divided by an overall rate extracted from market sales to
indicate a value. In the discounted cash flow method, anticipated future net
income streams and a reversionary value are discounted to an estimate of net
present value at a chosen yield rate (internal rate of return).
In our opinion, the discounted cash flow method is appropriate. The
discounted cash flow analysis is generally thought to be the best method for
evaluating income producing properties purchased for investment. Forecasted
future patterns of income and expenses are modeled to reflect the perceived
investor expectations. Appraisers make forecasts (not predictions) of future
events based on their understanding of market forces and familiarity with the
expectations of typical investors in the property type being appraised.
Potential Gross Income
Generally, Manhattan office tenants pay fixed rents on a rentable area
basis which is consistent with the space measurement standards for buildings of
similar vintage, plus any increases in operating expenses and real estate taxes
above stipulated base year amounts. Tenant electric costs are either directly
metered, submetered or billed on a rent inclusion basis, that is charged as
additional rent.
Existing Rent Roll
There are approximately 24 office tenants in occupancy within 605 Third
Avenue. We have included a rent roll in the Addenda of this report, but each
lease will be summarized on the following pages. In addition, a tenant stacking
plan appears on the following page.
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605 THIRD AVENUE LEASE EXPIRATIONS
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44 STINNES MECH.
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43 STINNES MECH. 1997
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42 NEUBERGER & BERMAN
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41 NEUBERGER & BERMAN 1999
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40 NEUBERGER & BERMAN
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39 NEUBERGER & BERMAN 2000
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38 NEUBERGER & BERMAN
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37 NEUBERGER & BERMAN 2001
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36 NEUBERGER & BERMAN
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35 NIMS HOWES COLLISON 2003
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34 DAVIDOFF & MALITO
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33 STEINHARDT PARTNERS, L.P. 2004
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32 GRANT THORNTON
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31 GRANT THORNTON 2005
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30 GRANT THORNTON
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29 SMITH BARNEY 2006
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28 SNOW BECKER KROLL MECH.
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27 HUBER LAWRENCE 2007
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26 NEW YORK JOB DEVELOPMENT
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25 SNOW BECKER KROLL 2008
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24 BAND ROSENZWEIG AIM RESOURCES
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23 CHARTWELL LEISURE 2009
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22 NEUBERGER & BERMAN (2)
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21 NEUBERGER & BERMAN (2) 2010
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20 NEUBERGER & BERMAN (2)
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19 [ILLEGIBLE] MECH.
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18 PODELL, ROTHMAN
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17 VACANT
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16 ESANU, KATSKY
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15 ESANU, KATSKY [BLDG OFF] MA ASSOCIATES
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14 ARMY CORP OF ENGINEERS UNIVISION
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12 UNIVISION
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11 JOHN WILEY ESPN
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10 JOHN WILEY & SONS
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9 JOHN WILEY & SONS
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8 ESPN
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7 JOHN WILEY & SONS MECH.
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6 JOHN WILEY & SONS
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5 JOHN WILEY & SONS
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4 JOHN WILEY & SONS
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3 NEUBERGER & BERMAN (1)
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2 NEUBERGER & BERMAN (1)
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METRO
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L UNISYS SOUTH PASQUA PUBLIC NATIONAL BANK
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WORTH
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6/27/97
(1) Unisys is prime tenant until 1999.
(2) Rollins, Burdick is prime tenant until 2000. Neuberger & Berman may
terminate either the 20th or 22nd floor lease as of 8/31/2003 upon 12
months notice.
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Income Capitaization Approach
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Insert
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Income Capitaization Approach
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Floors 1, 2 and 3 are encumbered by a lease to UNISYS Corporation. This
lease encompasses 77,144 square feet and expires in April, 1999. The total rent
including recoveries amounts to $53.15 per square foot. On floor 2, this space
is occupied, by Sublease, by Neuberger & Berman who will become a direct tenant
when the lease expires. On floor 3, there is a lease with Neuberger & Berman to
occupy the space when the current lease expires. The new lease will provide for
a rental based upon 95% of fair market rent.
John Wiley occupies floors 4 to 7, 9-10 and part of 11 under a lease which
expires in April, 2003. The total rent including escalations currently amounts
to approximately $50.12 per square foot. The lease area contains 228,827 square
feet. ESPN, Inc. occupies floors 8 and part 11 under a lease which expires
October, 2004. The lease for floor 8 encumbers 34,246 square feet and the total
rent, including escalations is currently $47.04 per square foot. The lease for
Part 11 encumbers 19,428 square feet and the total rent, including escalations
is currently $31.94 per square foot.
Univision occupies the 12th floor and a portion of 14th floor under a
lease which expires in June 2010. The leased area contains 35,814 square feet
and the total rent, including escalations is currently $36.55 per square foot.
The 16th floor and part of the 15th floor (19,867 square feet) are leased
to Esanu, Katsky, Koring and Siger. This lease expires in June, 2008 and the
total rent, including escalations is currently $33.10 per square foot.
The balance of the 15th floor (6,084 square feet) is occupied by Sylvor,
Gold & Morelli. This lease expires in June, 2000.
Podell Rothman occupies the 18th floor (17,800 square feet) under a lease
which expires in March, 2009. The total current rent amounts to $32.55 per
square foot.
Floors 19-22 are encumbered by a lease to Rollins Burdick through April,
2000. The total rent including escalations is currently $52.74 per square foot.
However, floors 20-22 are occupied, by sublease, by Neuberger & Berman who will
become a direct tenant when the current lease expires. The new lease will
provide for a rental based upon 90% of fair market rent expiring in February,
2007. Neuberger & Berman may terminate either the 20th or 22nd floor lease as of
August 31, 2003.
The 24th floor has been leased to AIM Resources (7,575 square feet) and
Rand Rosensweig (11,063 square feet). Both leases expire in October, 2005.
Snow Becker occupies the 25th floor and a portion of 28. The space
contains 25,270 square feet and the lease expires in August, 2005.
New York Job Development occupies 17,770 square feet on the 26th floor.
This lease expires in April, 2000 and the current total rental amounts to $60.90
per square foot, including escalations.
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Income Capitaization Approach
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On the 27th floor, Huber Lawrence occupies 18,768 square feet under a
lease which expires in March, 2006. The total rent, including escalations
currently amounts to $47.95 per square foot.
Smith Barney is located on the 29th floor which is comprised of 17,890
square feet. This lease runs through April, 1999 and provides for a total
current rental payment of $44.24 per square foot, including escalations.
Grant Thornton occupies floors 30, 31 and 32 under a lease which expires
in August, 1999. This lease encompasses 53,688 square feet and provides for a
current rent of approximately $42.91 per square foot, including escalations.
Steinhardt Partners, L.P. occupies 17,896 square feet on the 33rd floor.
This lease expires in September, 1997.
Davidoff & Malito occupies space on the 34th floor under a lease which
expires in August, 2004. The space is comprised of 17,947 square feet and the
rent is $37.66 per square foot, including escalations.
Nims Howe is on the 35th floor. The lease encompasses 17,984 square feet
and runs through July, 2007. The base rent plus escalations amounts to $41.97
per square foot at the present time.
Floors 36-42 are occupied by Neuberger & Berman under a lease which
expires in February, 2007. The space encompasses 136,793 square feet and
produces a rental of $39.17 per square foot, including escalations.
The 43rd and 44th floors are occupied by Stinnes Corp. encompassing 25,560
square feet. This lease expires in February, 2005 and provides for a total
current rental of $46.02 per square foot, including escalations.
There were six recent lease transactions completed within 605 Third Avenue
during 1996.
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<TABLE>
<CAPTION>
Summary of Recent Leases
Space Tenant SF Area Rent/SF Free Rent Alteration Work/SF
<S> <C> <C> <C> <C> <C>
23 Chartwell Leisure 18,695 1-5 - $29.00 9 months $15.00
6-10 - $32.00
Pt. 14 Univision 8,832 $35.07 6 months $30.00
12 Univision 26,982 $35.07 None $10.00
Pt. 28 Snow Becker 7,500 $29.75 4 months $15.00
Pt. 11 ESPN 6,795 $29.75 12 months None
Pt. 14 Army Corp. of 7,500 $31.75 None None
Engineers
</TABLE>
As noted above, the most recent leasing activity within the property
involves relatively small spaces where little free rent and minimal or no
alteration allowances were given. The rent levels reflect a range of from $29.00
per square foot to $35.07 per square foot with the tenant further being
responsible for increases in operating expense, real estate taxes and labor
costs.
Office Market Rental Rate
The market rent for office space within the property has been estimated by
analyzing 13 comparable leases exhibited on the summary chart which appears on
the facing page. In our analysis, we have considered several lease attributes:
rent concession, time (market conditions), location, quality, size and the
condition. Percentage adjustments between the subject property and the
comparable leases were made for each of these factors.
We have adjusted each comparable rental for rent concessions which are
significantly different from those offered in the subject property. In this
case, the building standard is estimated to be 12 months of free rent, including
construction build-out time and $40.00 per square foot of tenant alteration work
provided by the landlord. Comparable leases which provide more generous rent
concessions when viewed in the aggregate over the length of the lease terms were
adjusted downward to account for these concession packages. Conversely, those
rentals with less generous rental concession packages were adjusted upward. The
comparable rentals indicate a range in starting rent of from $21.00 per square
foot to $44.00 per square foot. The leases range in terms from approximately 5
years to 15 years. The base rents tend to begin at a range of between $21.00 and
$41.00 per square foot and subsequently increase approximately $2.00 to $4.00
per square foot after five years with an additional $2.00 to $4.00 per square
foot increase after 10 years in the case of leases which have a greater term
than that period of time. A more specific discussion of the rental comparables
follows.
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Office Rental Map
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Income Capitaization Approach
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Office Lease Comparable No. 1 is located at 850 Third Avenue. The lease
was signed in May 1996 and involves a leased premises of 15,000 square feet. The
lease runs for 10 years and involves a rental of $27.50 per square foot for 5
years and $30.50 per square foot for 5 years. The tenant is responsible for
increases in real estate taxes and operating expenses, as well as electric on a
direct meter basis. The tenant was given $25.00 per square foot of alteration
work and 6 months of free rent.
Office Lease Comparable No. 2 is located at 757 Third Avenue which is at
the northeast corner of 47th Street. The lease was signed in May 1996 involving
an area of 22,598 square feet. The lease term was 10 years with rentals of
$32.00 per square foot for 5 years and $34.00 per square foot for 5 years. The
tenant is responsible for increases in real estate taxes and operating expenses
as well as electric on a direct meter basis. The tenant was given 7 months of
free rent.
Office Lease Comparable No. 3 is located in the GrayBar Building at 420
Lexington Avenue. This lease was signed in May 1996 and involves 21,086 square
feet. The term of the lease is 5 years. The rental is $21.00 per square foot for
3 years and $22.00 per square foot for the final 2 years. The tenant pays
increases in real estate taxes and operating expenses, as well as electricity on
a direct meter basis. This was a sublease transaction and involved no work and
no free rent.
Office Lease Comparable No. 4 is located at 150 East 42nd Street. The
transaction date is May 1996. The premises is comprised of 56,390 square feet.
The leased term is 11 years. The tenant pays base rent of $27.50 per square foot
for 6 years and $30.50 per square foot for 5 years. The tenant is further
responsible for increases in real estate taxes and operating expenses as well as
electricity on a direct meter basis. The tenant was provided with a $35.00 per
square foot alterational allowance.
Office Lease Comparable No. 5 is located at 2 Grand Central Tower. The
lease involves 7,600 square feet which was taken for a 10 year term in January
1996. The rent was $33.00 per square foot for 3 years and $38.00 per square foot
for seven years. The tenant received $35.00 per square foot of alteration work.
Office Lease Comparable No. 6 is located at 575 Lexington Avenue. The
leased date is June 1996. The premises is comprised of 12,467 square feet. The
leased term is 10 years. The base rent is $26.00 per square foot for years 1
through 5 and $30.00 per square foot for years 6 through 10. The tenant is
responsible for increases in operating expenses and real estate taxes as well as
electricity on a submetered basis. The tenant was provided with no free rent and
no alterational allowance.
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Office Lease Comparable No. 7 is located at 575 Lexington Avenue. The
premises is comprised of 21,370 square feet on the second floor and 300 square
feet on the first floor. The tenant is TSI Sports Club. The leased term is 15
years with base rents of $22.00 per square foot for 4 years, $26.00 per square
foot for 5 years and $32.00 per square foot for 5 years for the second floor
space and $75.00 per square foot for the first floor space. The tenant is
responsible for increases in operating expenses and real estate taxes as well as
electricity on a submetered basis. The landlord agreed to provide $22.00 of
alteration work and a 10-1/2 month free rent period.
Office Lease Comparable No. 8 is located at 675 Third Avenue. The
transaction date is December 1996. The leased premises are comprised of 8,792
square feet of office space. The leased term is 10 years and the base rent is
$27.70 per square foot for years 1 through 5 and $30.50 for years 6 through 10.
The tenant is responsible for increases in real estate taxes and operating
expenses as well as electrical consumption on a submetered basis. The tenant had
no free rent allowance but was given $50.00 of alterational work.
Office Lease Comparable No. 9 is located in 666 Third Avenue. The lease
was signed in November 1996 and involved 4,700 square feet of office space. The
lease has a 10 year term. The base rents are $29.00 per square foot for years 1
through 5 and $31.00 per square foot for years 6 through 10. The tenant is
responsible for increases in real estate taxes and operating expenses as well as
electrical costs on a submetered basis. There was no free rent period and the
tenant was given a $40.00 per square foot alterational allowance.
Office Lease Comparable No. 10 is located in 150 East 42nd Street. The
lease was signed in October 1996 and involves 82,000 square feet of office
space. The lease term is 10 years and the base rents are $28.00 per square foot
for years 1 through 5 and $32.00 per square foot for years 6 through 10. The
tenant is responsible for increases in real estate taxes and operating expenses
as well as electrical costs on a submetered basis. There was a 12 month free
rent allowance and the tenant was given $45.00 of alterational work. This space
is located on floors 6 and 7, and tends to reflect a rent for lower floor space.
Office Lease Comparable No. 11 is located at 150 East 42nd Street. This
lease was signed in January 1997 involving several upper floors. The leased
premises is comprised of 287,000 square feet. The lease term is 13 years. The
initial base rent is $41.00 per square foot increasing to $45.00 per square foot
after 6-1/2 years. The tenant is responsible for increases in real estate taxes
and operating expenses as well as electrical consumption on a submetered basis.
There was a free rent allowance of 13 months and an alterational allowance of
$45.00 per square foot.
Office Lease Comparable No. 12 is located at 150 East 42nd Street. This
lease was signed in January 1997. The floors were mid-rise floors and comprised
a total of 185,000 square feet. The lease term is for 15 years. The base rent
begins at $24.00 per square foot and increases to $30.50 per square foot by the
end of the leased term. Operating expenses and real estate taxes are the
responsibility of the tenant over an initial base year. Electrical costs are
billed to the tenant on a submetered basis. The landlord agreed to an
alterational allowance of $45.00 per square foot and 12 months of free rent.
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Income Capitaization Approach
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Office Lease Comparable No. 13 is located in the Met Life Building at 200
Park Avenue. This lease was signed in May 1997 and involves 42,000 square feet
of upper floor space. The base rent is $37.98 per square foot and the tenant is
responsible for increases in real estate taxes and operating expenses as well as
submetered electric. There is no free rent associated with this lease and the
tenant was given a $40.00 per square foot work allowance.
After adjustment, the comparable rentals reflect a range of from $30.59
per square foot to $37.00 per square foot. The lower end of these comparables
tend to indicate a rent that would be appropriate for lower floor space, while
the upper end of this range reflects rentals that have the benefit of the upper
floors.
As noted within our discussion of the recent leases, the Midtown office
market leases include concession packages in the form of free rent and tenant
workletter allowances consistent with those which are offered within the subject
property. In addition to analyzing the actual deals inside and outside the
property, leasing brokers were interviewed in an effort to ascertain competitive
packages available in the marketplace today. Most brokers interviewed were of
the opinion that 10 months to 14 months of free rent, inclusive of space
build-out time, were available for most tenants in the Midtown market. It should
also be noted that most brokers were of the opinion that the concession packages
would be slightly less generous involving the better space in the primary Class
A buildings. In addition, it was found that tenant workletter allowances were in
the range of approximately $35.00 to $50.00 per square foot of leasable area.
The range in concession packages varies by the size of the space and the
prominence of the tenant as well as the strength of the location and the
property itself.
The leasing brokers interviewed indicated that the Midtown market had
stabilized to a large extent. Several expressed concern about the recently
announced layoffs from some of the large financial services firms such as Chase
Manhattan Bank and Chemical Bank. Although this is unlikely to add to the
inventory of vacant primary space, it may indeed slow down the absorption of
space within the overall market. Nevertheless, once again, we point out that the
subject property falls within the most desirable space category in Midtown
Manhattan. Given the desirability of this space, we anticipate that demand for
space will be stronger than in, for example, many of the older buildings on
Lexington and Third Avenues. Accordingly, we believe that it is likely, that the
rental concession packages will become less as space in the primary Class A
market continues to be absorbed.
In consideration of the occupied area, floor height, relative Midtown
location and lease date, the comparable rental data provide fairly consistent
evidence of prime rental rates in the better buildings in Midtown Manhattan.
This results in a range of market rent for 605 Third Avenue of $33.00 to $37.00
per square foot for initial start-up base rents. We have distributed the rent on
a floor by floor level as follows:
Floor Level Estimated Rental
Floor 2-15 $33.00/SF
Floors 16-30 $35.00/SF
Floors 31-44 $37.00/SF
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Our rental estimates assume that the leases will have terms of 10 years.
We have also assumed that the base rentals will increase by $4.00 in the 6th
year of a 10 year lease.
The above estimated market rents assume the following concession packages:
<TABLE>
<CAPTION>
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Free Rent Tenant Improvements
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<S> <C> <C> <C> <C>
New Leases All Tenants All Tenants
1997 10 months 1997 $40.00/SF increasing at 4% per year.
1998 8 months Thereafter
1999 6 months
Thereafter 5 months
- ------------------------------------------------------------------------------------------------------------------------------------
Renewing Leases All Tenants All Tenants 1997 $40.00/SF
1997 10 months 1997 & Thereafter 1998 $41.60/SF
1998 8 months 1999 $43.26/SF
1999 6 months 2000 & Thereafter $22.50/SF
Thereafter 5 months increasing at 4% per year.
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</TABLE>
Space Measurement
Space measurement standards in Midtown Manhattan vary from building to
building. Typically, the usable area of each floor (gross area less the core
area) is multiplied times an add-on factor to arrive at the rentable area. The
add-on factor varies from building to building and is influence most by the
strength or weakness of the leasing market. The ratio of rentable area to usable
area within the property is known as the loss factor. According to information
supplied by management, the measurement of the space within 605 Third Avenue
reflects a loss factor of 23 percent.
Assumptions Regarding Existing and Proposed Leases
With regard to lease expirations, we have projected that 50 percent of the
tenants within the property will vacate their premises at the expiration of
their leases and that 50 percent will renew leases for the space that they
currently occupy. This assumption is based in part upon our experience with
other office properties where the retention rates are commonly 60 to 70 percent
and also reflecting the character of the subject property and the size of the
tenancy within the property.
Vacancy between leases includes the period of actual downtime and can also
include the construction period for new tenant spaces. Consistent with our
experience, we have assumed a 6 month vacancy period between leases inclusive of
the construction period. The vacancy is weighted for a 50 percent renewal
probability which results in an effective downtime of an effective vacancy
period of 3 months of downtime upon lease expiration.
Free rent, calculated from the time the new tenant takes occupancy, ranges
from 10 to 14 months in the current market. We have assumed 10 months of free
rent for leases signed during 1997, 8 months for leases signed in 1998, 6 months
for leases signed in 1999 and 5 months for leases signed thereafter. We have
assumed that the same free rent package would be offered to renewal tenants as
to new tenants.
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We have assumed that new tenants in 1997 will receive $40 per square foot
as alteration allowances. We further assumed that any renewing tenant would be
offered a tenant alteration allowance of $20 per square foot, increasing at 4%,
during 1997 through 1999 and $22.50 per square foot for leases signed thereafter
increasing at 4% per year.
Market Rent Estimate - Retail Space
The retail space within 605 Third Avenue is leased by Bank Leumi and
UNISYS. In total, this space amounts to 17,070+/- square feet. In order to
estimate an appropriate rent level for the retail space, we have analyzed six
retail leases which were consummated recently within the Midtown area. A chart
which summarizes the terms of these leases is displayed on the facing page.
We have included six retail leases on Third Avenue and Lexington Avenue.
The leases reflect a time frame of from May 1995 through August 1997. Five of
the retail leases involve ground floor space and range between $70.00 per square
foot to $100.00 per square foot for the ground floor.
Comparable Nos. 1 and 4 also have basement level. Comparable No. 5 is
located at 570 Lexington Avenue and reflects the highest overall rent at $100
per square foot. The remaining ground floor retail leases reflect a range of
from $70.00 per square foot to $83.37 per square foot. Each, however, is
relatively small in size and benefit from retail locations which are superior to
the subject.
Therefore, we believe that an appropriate rental estimate for the subject
space which exists on Third Avenue, is $60.00 per square foot at the lower end
of the range after making adjustments.
Market Rental Estimate - Garage Space
On the facing page is a summary of comparable leases and asking rents for
garage properties throughout Manhattan. Properties range from smaller garages
containing 70 spaces to larger garages containing as much as 400 spaces. Rents
vary from a low of $1,440 per space to a high of $4,500 per space.
Contracts with third party operators take two forms - either a straight
lease or management agreement. Generally, with a lease, a contract is executed
for between 5 and 20 years, wherein the lessee guarantees a minimum rent. Such
is the case with parking garage operations at the subject property. Leases are
usually negotiated with net terms whereby the lessee is responsible for taxes
and expenses associated with the garage.
Leases in today's market are being negotiated typically in the range of
$2,000 per space to $2,500 per space. The most recently executed leases
exhibited in our survey are Comparables No. 1, 2, 3 and 4. Clearly, current
economic conditions are reflected in the most recent deals executed. The four
leases executed in 1995 and 1996 range from $2,000 per space to $4,500 per
space. The leases reviewed prior to 1995 are generally falling within the same
range. Most of these leases contain net terms, whereby the tenant is responsible
for full pass-throughs of real estate taxes and all expenses associated with the
garage.
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Many of the leases were written for terms greater than 10 years with the
majority having 15 year terms. Given the length of these leases, we would expect
the rent to step-up several times over the term of the lease.
The garage has a capacity of 750 cars. Based upon our information, we
conclude that a market rent of $2,000 per space for the garage is reasonable.
This indicates a market rent for the garage of $1,500,000. The garage currently
produces a revenue of approximately $1,200,000, including both the Hertz lease
and the non-leased spaces. At the present time, there is a lease to Hertz
Corporation for 200 spaces for a 10 year period commencing January 1, 1995 and
ending December 31, 2004.
Miscellaneous Income
Miscellaneous income is comprised primarily of tenant service revenues and
condenser water sales. Tenant service revenues generated by overtime air
conditioning, use of the freight elevator and miscellaneous repairs performed
for the tenants. Condenser water sales reflect the overtime usage for the
cooling tower. This revenue has been estimated at $200,000 for tenant services
revenue and $300,000 for condenser water sales.
Reimbursable Expenses
Tenants are responsible for their pro-rata share of real estate taxes when
this expense exceeds those incurred during the first full year of occupancy.
This type of escalation is typically also applied to operating expenses. The
majority of the current leases in the subject property includes this form of
escalation. The calculation of this revenue is summarized as follows: Billing
year operating expense, less base year operating expense equal increase in
operating expense multiplied by the tenants pro-rata share.
We have assumed that future leases in the subject property will be on a
full service basis. The tenant will be responsible for increases in real estate
taxes over the base fiscal year amount billed on either a semi-annual or monthly
basis and operating expenses billed monthly.
Vacancy and Collection
Both investor and the appraiser are primarily interested in the annual
revenue that an income property is likely to produce over a specified period of
time, rather than the income it could produce if it were always 100 percent
occupied and all tenants were paying their rent in full and on time. Normally
prudent practice is to expect some income loss as tenants vacate, fail to pay
rent or pay rent late.
Our cash flow projection assumes a tenant vacancy of 6 months upon lease
expirations set against our probability of renewal estimated to be 50 percent.
In addition, a global vacancy and credit loss vacancy has been applied to gross
rental income. The vacancy/global loss provision applies to all tenants except
Neuberger & Berman, John Wiley & Sons, Stinnes Corporation, ESPN, Smith Barney,
Grant Thornton and Rollins Hudig Hall. Our estimate of global vacancy and credit
loss is 2 percent. The effective aggregate vacancy from the property over the
projection period is as follows:
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Date Vacancy Effective Credit Loss Total Effective Vacancy
1997 2.54% .64% 3.18%
1998 .74% .65% 1.39%
1999 2.38% .59% 2.97%
2000 .88% .54% 1.42%
2001 .14% .58% .72%
2002 .02% .58% .60%
2003 3.91% .72% 4.63%
2004 1.23% .63% 4.63%
2005 .87% .65% 1.86%
2006 0 .61% 1.52%
2007 6.89% .71% 7.60%
2008 2.46% .58% 3.04%
Overall Average 1.84% .62% 2.46%
Operating Expenses
We have analyzed the budged operating expenses for 1997 as provided by
management. We forecasted the property's operating expenses after reviewing
operating expenses of similar buildings and after consulting local building
managers and agents, including Cushman & Wakefield Property Management
personnel. We have also examined industry norms as reported by BOMA Experience
Exchange Report published by the Building Owners and Managers Association
International, a nationally recognized publication.
The following analysis attempts to utilize the subject's budgeted expense
data supported by comparable expense data. The age and unique physical features
of the subject warrant consideration of 605 Third Avenue budget in estimating
market operating expenses.
Following are projected operating, recoverable and non-recoverable
expenses we have used in our cash flow analysis. We have analyzed each item of
expense individually and attempted to project what the typical informed investor
would consider reasonable. Although every expense category is addressed herein,
only those requiring explanation of variations will be discussed in great
detail.
Wages, Payroll, Taxes and Benefits - This category of expense is estimated
to be $1,633,600, or $1.66 per square foot. This is consistent with the past
history of the subject and reflects a fairly efficient building. The category
includes the salaries and benefits for the mechanical and administrative
building employees, including the building manager. This would include managers,
assistant managers, life safety director, night manager, day porters, security
personnel and engineers.
Cleaning - The total cost for contract cleaning services is estimated to
be $3,814,800, or an average of $3.88 per square foot. The category includes,
general cleaning services, interior and exterior window cleaning, light
maintenance and exterminating.
Elevators - This category has been estimated at $360,700, or approximately
$0.37 per square foot. This category reflects the cost of the elevator
maintenance and service contracts.
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Repairs and Maintenance - This category is estimated to be $1,022,000, or
approximately $1.04 per square foot. This category includes, electrical supplies
and repairs, plumbing repairs, HVAC supplies and repairs, general building
expenses which include miscellaneous supplies and maintenance expenses, as well
as landscaping, window repair, metal maintenance, painting, miscellaneous
repairs and maintenance.
Rubbish Removal - This expense is estimated to be $79,200, or
approximately $0.08 per square foot.
Utilities - This expense is estimated to be $3,097,500 which equates to
approximately $3.15 per square foot. This expense includes $0.51 per square foot
for steam heat, $0.11 per square foot for water, and $2.52 for electricity.
Insurance - This category is estimated to be $425,400, or approximately
$0.43 per square foot. Insurance premiums account for policies covering the
boiler, machinery, property, umbrella/excess liability and supplemental flood
insurance.
Legal and Accounting - This expense is estimated to be $310,600 which
equates to $0.32 per square foot. This is intended to account for the day-to-day
cost of legal and accounting services. This is reasonable in light of past
history and with regard to comparable office properties.
Miscellaneous - This expense is estimated to be $0.43 per square foot, or
$424,800. This category is intended to be a catch all of items not covered by
the other categories and includes administrative and operating miscellaneous
expenses.
Management - Management is estimated to be $226,200, or approximately
$0.23 per square foot. It is assumed that this category would account for the
day to day operation of the property. In addition, this level of expense assumes
that the management be given the exclusively leasing rights for the rental of
office space within the property.
Real Estate Taxes - Real estate taxes were discussed in that section of
the report presented earlier.
Leasing Commissions and Tenant Alteration Costs - The leasing commissions
have been based upon the generally accepted standard schedule. The standard
schedule as quoted by Cushman & Wakefield, Inc. depends upon the length of the
lease: 5 percent for year 1, 4 percent for year 2, 3 1/2 percent for years 3
through 5, 2 1/2 percent for years 6 through 10 and 2 percent for years 11
through 20. This schedule results in the following percentages for the first
year base rent. 5 years - 19.5%, 10 years - 32%, 15 years - 42%, 20 years - 52%.
Leasing commissions are typically higher for new tenants than renewal
tenants. A new tenant typically causes a full commission to be paid where as a
renewing tenant typically results in half commission. We have incorporated the
standard assumption in our cash flow projection.
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Manhattan office building owners typically refurbish office areas to
tenants specifications. Known as tenant workletters, the refurbishment typically
takes the form of the demolition of the old improvements, the addition of new
partitions, lighting and carpeting. In certain instances, new ceilings and
renovated bathrooms are provided. Alternatively, a lump sum amount is given to
the tenant to spend for the improvements. Tenant improvements are expressed as a
dollar amount per square foot, like leasing commissions, new tenants typically
receive a larger amount than renewing tenants. Tenant workletters are typically
offered to office tenants, while storage tenants and retail tenants typically
take their space on an as is basis.
Capital Improvements
A capital improvement budget has been established in order to accommodate
improvements which include lobby floor repairs, sidewalks repairs, freight car
refurbishment, asbestos removal and other miscellaneous improvements.
Existing Commissions and Alteration Work
An amount has been allocated to existing commissions and tenant
alterations which are due in connection with leases that were constructed during
1996.
Reserves for Replacements
It is customary and prudent to deduct an annual sum from effective gross
income to establish a reserve for replacing short-live items throughout the
building. These costs may include roof repair, HVAC upgrades and ADA compliance.
Our 1997 projection includes $150,000, or approximately $0.15 per square foot of
rentable area and this is considered reasonable for capital expenditures over
the course of the investment holding period.
Discounted Cash Flow Analysis
In the discounted cash flow analysis, we employed the PRO-JECT+ software
which allowed us to simulate the operating characteristics of the property and
to make a variety of operating assumptions. We try to reflect the most likely
investment assumptions of typical buyers and sellers in this particular market
segment.
CASH FLOW PROJECTIONS
Cash flow assumptions for 605 Third Avenue are as follows:
I Projection Period 1997-2008
II Growth Rates
A. Market Rental Rates 4% per annum
B. Operating Expenses 4% per annum
C. Real Estate Taxes Based on the scenario outlined (see
appropriate section).
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D. Tenant Work Based upon scenario outlined
III Market Rents 1997 Gross
A. Office Space Rent/SF
Floors 2-14 $33.00/SF
Floors 15-30 $35.00/SF
Floors 31-44 $37.00/SF
B. Basement $15.00/SF
C. Bank $60.00/SF
D. Other Retail $60.00/SF
IV Revenues
A. Rental Income Based upon current rent roll
B. Tenant Electric $2.75 per square foot increasing at 4
percent at the time of lease
expiration.
C. Escalation Income Tenants pay, according to their lease
terms, a combination of the following
escalations; real estate taxes over a
base year, operating expenses over a
base year and a cleaning/labor clause.
D. Other Revenue Consists of the following items:
Condenser Water Income - $300,000 in
1997 increasing at 4 percent per year.
Net Tenant Service Income - $200,000
in 1997 increasing at 4 percent per
annum.
Garage Operations - Based upon
budgeted 1997 garage income increasing
at 4 percent per annum. (Excludes
Hertz lease revenue which is shown in
the tenant rent section).
V Expenses
A. Operating Expenses
1. Building Operating Expenses $11.58 per square foot, based upon
1997 actual operating expenses
(including tenant electric expense).
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B. Real Estate Taxes The transitional assessments for 605
Third Avenue are as follows based upon
the actual 1997/98 assessment of
$83,350,000:
1996/97 $74,160,000
1997/98 $76,230,000
1998/99 $79,650,000
1999/2000 $81,900,000
2000/2001 $82,170,000
2001/2002 $82,350,000
Real estate taxes include the Business
Improvement District Tax. After the
2000/2001 tax year, real estate taxes
increase at 2.5% per year.
C. Capital Improvements The majority of these costs relate to
asbestos removal on the elevator
shafts and upgrades to the mechanical
systems.
D. Vacancy
Allowance/Free Rent/ Credit 2 months weighted average vacancy, 10
Loss (Office/Retail) months free rent for all leases
through 1998, 8 months for all leases
in 1998, 6 months in 1999 and 5 months
thereafter. Credit loss of 2.0% for
all non-major tenants.
E. Tenant Work $40 per square foot for new and
renewing tenants, increasing at 4% per
year. $22.50 per square foot
increasing at 4% per year for renewal
tenants after 2000.
VI Rollovers and Renewals
A. Tenant Mix Upon Office and Basement Space- 50 percent
Lease Expiration renew, 50 percent vacate.
B. Office Space
Characteristics of New Leases
1. Lease Term 10 years
2. Vacant Period 6 months on turnover to a new tenant
3. Base Rent Base rent is assumed to be market rent
in the year of rollover with an
increase in base rentals of $4.00 per
square foot in year 6 and the
retention of existing escalation base
year.
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4. Type of Escalation: Pass-through of pro rata share of
increases in real estate taxes over a
base year, pro rata share of operating
expenses adjusted for 50 percent
electric over a base year; base year
is calendar year of lease term.
5. Leasing Commission Calculated based upon standard
commission rates for a 10 year lease
transaction with a factor for leasing
override. On renewals, 50% are
in-house and 50% are through the use
of an outside broker.
C. Retail Space
Characteristics of New Leases
1. Lease Term 10 years
2. Vacant Period 6 months on turnover to new tenant
3. Base Rent Base rent is assumed to be market rent
in the year of rollover with an
increase in base rentals in year 6 of
$4.00 per square foot with the
retention of the existing escalation
base years.
4. Type of Escalation Pass-through of pro-rata share of
increases in real estate taxes over a
base year, pro-rata share of operating
expenses adjusted for 50 percent
electric over a base year; base year
is calendar year of lease term.
5. Tenant Work None
6. Leasing Commissions Calculated based upon standard
commission rates for a 10 year lease
transaction with a factor for a
leasing override.
Cash Flow Projection
On the following pages may be found our 12 year cash flow projection which
includes our 11 year holding period and 12th year reversionary year. Our assumed
holding period is a fiscal period beginning January 1, 1997 and ending December
31, 2009. The cash flow reflects the results of the PRO-JECT +plus. The cash
flow exhibits a value matrix with varied discount rates and terminal
capitalization rates.
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605 THIRD AVENUE
CASH FLOW ANALYSIS
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YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6
1997 1998 1999 2000 2001 2002
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<S> <C> <C> <C> <C> <C> <C>
RENTAL INCOME
All Tenants $ 34,865,580 $ 34,879,440 $ 33,456,616 $ 34,041,576 $ 34,391,240 $ 34,614,832
Free Rent ($ 286,982) ($ 868,323) ($ 1,534,201) ($ 1,551,773) ($ 47,668) ($ 104,556)
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TOTAL MINIMUM RENTAL INCOME $ 34,578,598 $ 34,011,117 $ 31,922,415 $ 32,489,803 $ 34,343,572 $ 34,510,276
OPERATING EXPENSE $ 2,385,732 $ 2,725,477 $ 2,810,147 $ 2,645,541 $ 2,894,440 $ 3,307,393
REAL ESTATE TAX $ 3,671,770 $ 3,933,085 $ 3,915,060 $ 3,351,367 $ 3,283,397 $ 3,466,096
CPI ADJUSTMENT $ 0 $ 1,846,957 $ 2,770,435 $ 2,770,435 $ 2,770,435 $ 2,770,435
CLEANING EXPENSE $ 146,514 $ 174,601 $ 178,272 $ 192,283 $ 220,135 $ 249,099
PORTER WAGE $ 230,477 $ 250,202 $ 270,715 $ 97,350 $ 0 $ 0
ELECTRIC-NEUBERGER $ 290,001 $ 301,601 $ 408,483 $ 574,257 $ 643,592 $ 669,337
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TOTAL GROSS RENTAL INCOME $ 41,300,037 $ 43,243,040 $ 42,275,527 $ 42,121,036 $ 44,155,571 $ 44,972,636
Less: Vacancy & Collection Loss $ 266,401 $ 280,197 $ 249,813 $ 225,839 $ 254,319 $ 261,283
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Effective Rental Income $ 41,033,636 $ 42,962,843 $ 42,025,714 $ 41,895,197 $ 43,901,252 $ 44,711,353
Add: Tenant Service - Net $ 200,000 $ 208,000 $ 216,320 $ 224,973 $ 233,972 $ 243,331
Add: Condenser Water $ 300,000 $ 312,000 $ 324,480 $ 337,459 $ 350,958 $ 364,996
Add: Garage Revenues $ 400,000 $ 416,000 $ 432,640 $ 449,946 $ 467,943 $ 486,661
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EFFECTIVE GROSS INCOME $ 41,933,636 $ 43,898,843 $ 42,999,154 $ 42,907,575 $ 44,954,125 $ 45,806,341
OPERATING EXPENSES:
Real Estate Taxes $ 7,807,524 $ 8,075,947 $ 8,488,636 $ 8,746,918 $ 8,901,962 $ 9,090,000
Operating Expenses $ 11,395,000 $ 11,850,800 $ 12,324,832 $ 12,817,826 $ 13,330,538 $ 13,863,760
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TOTAL OPERATING EXPENSES $ 19,202,524 $ 19,926,747 $ 20,813,468 $ 21,564,744 $ 22,232,500 $ 22,953,760
NET OPERATING INCOME $ 22,731,112 $ 23,972,096 $ 22,185,686 $ 21,342,831 $ 22,721,625 $ 22,852,581
ALTERATIONS $ 0 $ 778,045 $ 4,156,191 $ 1,677,396 $ 263,229 $ 0
COMMISSIONS $ 0 $ 129,037 $ 788,670 $ 1,022,067 $ 416,086 $ 53,652
CAPITAL REPAIRS $ 3,154,587 $ 430,517 $ 1,011,455 $ 425,000 $ 425,000 $ 384,260
CAPITAL RESERVES $ 150,000 $ 156,000 $ 162,240 $ 168,730 $ 175,479 $ 182,498
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TOTAL CASH FLOW $ 19,426,525 $ 22,478,497 $ 16,067,130 $ 18,049,638 $ 21,441,831 $ 22,232,171
YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12
2003 2004 2005 2006 2007 2008
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RENTAL INCOME
All Tenants $ 34,943,584 $ 37,516,820 $ 39,108,516 $ 40,484,920 $ 44,176,356 $ 49,480,148
Free Rent ($ 4,312,927) ($ 175,421) ($ 2,206,351) ($ 1,394,166) ($ 7,170,686) ($ 1,359,306)
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TOTAL MINIMUM RENTAL INCOME $ 30,630,657 $ 37,341,399 $ 36,902,165 $ 39,090,754 $ 37,005,670 $ 48,120,842
OPERATING EXPENSE $ 2,661,818 $ 2,522,143 $ 2,669,350 $ 2,934,228 $ 2,125,862 $ 2,135,467
REAL ESTATE TAX $ 2,674,694 $ 2,320,122 $ 2,069,608 $ 2,033,044 $ 1,244,698 $ 1,141,716
CPI ADJUSTMENT $ 923,478 $ 0 $ 0 $ 0 $ 0 $ 0
CLEANING EXPENSE $ 279,224 $ 276,201 $ 93,199 $ 66,298 $ 74,393 $ 82,811
PORTER WAGE $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
ELECTRIC-NEUBERGER $ 696,111 $ 723,955 $ 752,914 $ 783,030 $ 135,725 $ 0
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TOTAL GROSS RENTAL INCOME $ 37,865,982 $ 43,183,820 $ 42,487,236 $ 44,907,354 $ 40,586,348 $ 51,480,836
Less: Vacancy & Collection Loss $ 270,899 $ 271,902 $ 273,982 $ 271,795 $ 289,077 $ 297,806
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Effective Rental Income $ 37,595,083 $ 42,911,918 $ 42,213,254 $ 44,635,559 $ 40,297,271 $ 51,183,030
Add: Tenant Service - Net $ 253,064 $ 263,186 $ 273,714 $ 284,662 $ 296,049 $ 307,891
Add: Condenser Water $ 379,596 $ 394,779 $ 410,571 $ 426,993 $ 444,073 $ 461,836
Add: Garage Revenues $ 506,128 $ 526,373 $ 547,428 $ 569,325 $ 592,098 $ 615,781
---------------------------------------------------------------------------------------------
EFFECTIVE GROSS INCOME $ 38,733,871 $ 44,096,256 $ 43,444,967 $ 45,916,539 $ 41,629,491 $ 52,568,538
OPERATING EXPENSES:
Real Estate Taxes $ 9,317,250 $ 9,550,182 $ 9,788,936 $ 10,033,658 $ 10,284,500 $ 10,541,612
Operating Expenses $ 14,418,310 $ 14,995,042 $ 15,594,842 $ 16,218,636 $ 16,867,380 $ 17,542,074
---------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES $ 23,735,560 $ 24,545,224 $ 25,383,778 $ 26,252,294 $ 27,151,880 $ 28,083,686
NET OPERATING INCOME $ 14,998,311 $ 19,551,032 $ 18,061,189 $ 19,664,245 $ 14,477,611 $ 24,484,852
ALTERATIONS $ 8,686,524 $ 769,536 $ 4,439,186 $ 1,597,277 $ 14,322,158 $ 1,924,549
COMMISSIONS $ 2,080,060 $ 2,252,496 $ 1,106,948 $ 1,381,474 $ 3,993,253 $ 3,964,364
CAPITAL REPAIRS $ 0 $ 0 $ 300,000 $ 0 $ 0 ($ 0)
CAPITAL RESERVES $ 189,798 $ 197,390 $ 205,285 $ 213,497 $ 222,037 $ 230,918
---------------------------------------------------------------------------------------------
TOTAL CASH FLOW $ 4,041,929 $ 16,331,610 $ 12,009,770 $ 16,471,997 ($ 4,059,837) $ 18,365,021
===============================================================================================================================
</TABLE>
CUSHMAN &
WAKEFIELD(R)
---------------------------
VALUATION ADVISORY SERVICES
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<PAGE>
Income Capitaization Approach
================================================================================
Terminal Capitalization Rate Selection
A terminal overall capitalization rate (OAR) was used to estimate the
market value of the property at the end of the assumed investment holding
period. The rate is applied to the 11th year estimate of net operating income.
We estimated an appropriate terminal rate based on indicated rates in today's
market (approximately 7.5 to 8.5 percent). A premium was added to today's rates
to allow for the risk of unforeseen events or trends which might affect our
estimate of net operating income during the holding period, including a possible
deterioration in market conditions for the property. Investors typically add 50
to 100 basis points to the "going-in" rate to arrive at a terminal OAR,
according to Cushman & Wakefield's periodic investor surveys.
Discount Rate Analysis
Our valuation endeavored to reflect the most likely actions of typical
buyers and sellers in this market. We forecasted cash flows and discounted them
and the future property value at reversion to a present value at various
internal rates of return (yield rates) currently anticipated by investor in
similar-quality investments. The yield rate (internal rate of return or IRR) is
the single rate that discounts all future equity benefits (cash flows and equity
reversion) to an estimated present value.
In the discounted cash flow analysis, we employed the Pro-Ject +plus
computer program. This program simulates the operating characteristics of the
property and allow us to make a variety of operating assumptions. We tried to
reflect the most likely investment assumptions of typical buyers and sellers in
this particular market segment.
Analysis by the discounted cash flow method is examined over a holding
period that allows the investment to mature, the investor to recognize a return
commensurate with the risk taken and a recapture of the original investment.
Typical holding periods usually range from 10 to 20 years and are sufficient for
the majority of institutional grade real estate such as the subject to meet the
criteria noted above. In the instance of the subject, we have analyzed the cash
flows anticipated over an 12-year fiscal projection period. Our analysis has
been performed on a fiscal year basis, commencing August 1, 1997.
A sale or reversion is deemed to occur at the end of the 11th year, based
upon capitalization of the following year's net operating income. This is based
upon the premise that a purchaser in the 11th year is buying the following
year's net income. Therefore, our analysis reflects this situation by
capitalizing the first year of the next holding period.
The present value was formulated by discounting the property cash flows at
various rates. The yield rate utilized to discount the projected cash flow and
eventual property reversion was based on an analysis of anticipated yield rates
of investors dealing in similar investments. The rates reflect acceptable
expectations of yields to be achieved by investors currently in the marketplace
shown in their current investment criteria and as extracted from office
buildings.
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-81-
CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
Income Capitaization Approach
================================================================================
A yield rate differs from an income rate, such as cash-on-cash (equity
dividend rate or cash flow after debt service), in that it takes into
consideration all equity benefits including the equity reversion at the time of
resale, in addition to annual cash flows. The internal rate of return is the
single-yield rate that discount all of the future equity benefits (cash flows
and equity reversion) to the original equity investment. The yield rates
currently accepted by investors in the market can be applied to a projected cash
flow and reversion in order to estimate the present value of the projected
income stream, and therefore, the value of the subject property.
Since any real estate investment must compete in the open market for
capital, it must be competitive with the various alternatives available in the
financial marketplace. In developing an appropriate risk rate for the subject,
we have given consideration to a number of different investment opportunities.
These other non-real estate alternatives are important to an equity investor
when contemplating an investments included long-term rates such as Corporate AAA
bonds and 30 year Treasury Bonds. In addition, consideration was also given to
the current prime rate of 8.50 percent and the current discount rate of 5.00
percent.
Cushman & Wakefield also regularly publishes an Investor Survey outlining
current investment parameters of major forces in the real estate marketplace.
The results of this most recent survey, prepared as of Winter 1996 is provided
in the Addenda section of this report. The investment instruments described
above, the pre-tax yield requirements in our survey and the expected yields from
the sale transactions previously cited in the Sales Comparison Approach, provide
a benchmark for prevailing real estate market conditions, especially when
differing investment characteristics are considered. These yields are considered
to be the best indicators available of general yield expectations in the
marketplace.
Major investors in existing investment grade real estate such as office
buildings, shopping centers and industrial facilities currently require equity
yield rates in the range between 10.0 and 15.0 percent depending upon the
attraction, duration and quality of a project's cash flow, the type of property,
recent market activity, availability and terms of financing, risk perception,
tax benefit potential and future value considerations.
Obviously, with risk being commensurate with return, the more secure
income streams would tend to fall towards the lower end of current yields, with
those properties containing more risk, falling towards the upper end. We also
must consider the fact that the subject property, as a primary building located
in a prime submarket of Midtown Manhattan is investment grade. This factor will
be considered in our analysis of the investment returns cited in the investor
survey.
The residual cash flows annually generated by the subject property
comprise only the first part of the return which an investor will receive. The
second component of this investment return is the pre-tax cash proceeds from the
resale of the property at the end of a projected investment holding period.
Typically, investors will structure a provision in their analysis in the form of
a rate differential over a going-in capitalization rate in projecting a future
disposition price. The view is that the improvement is then older and the future
is more difficult to visualize, hence a slightly higher rate is warranted for
added risks in forecasting.
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CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
Income Capitaization Approach
================================================================================
The Cushman & Wakefield Valuation Advisory Services has surveyed national
real estate investors to determine their investment objectives. Cushman &
Wakefield Valuation Advisory Service's National Investor Survey Winter 1996
details the investment requirements of active investors in the marketplace.
Regarding office buildings, these investors generally required internal rates of
return from 10.0 to 15.00 percent with the average-low and high ranging from
12.05 to 13.13 percent, respectively. Going-in capitalization rates range from
7.5 to 14 percent, with the average-low and high ranging from 9.36 to 10.45
percent, respectively. Terminal capitalization rates range from 8.0 to 14
percent with the average low and high ranging from 9.51 to 10.30 percent,
respectively. Growth rates for income and expenses generally range from 3.0 to
5.0 percent.
The following table summarizes Cushman & Wakefield Valuation Advisory
Service's National Investor Survey for Winter 1996.
<TABLE>
<CAPTION>
===============================================================================================================
Cushman & Wakefield's Investor Survey
Winter 1996
Offices - Urban Class A
===============================================================================================================
OAR IRR Growth Rates
- ---------------------------------------------- ---------------------------------
Number of
Responses In Out Income Expenses
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10 9.13%-9.73% 9.50%-9.90% 11.28%-11.98% 2.79%-3.79% 3.72%-4.06%
===============================================================================================================
</TABLE>
National Market Indicators, as of the second quarter 1997 published by
Peter F. Korpacz & Associates, Inc. is summarized as follows:
================================================================================
National Market Indicators
Second Quarter 1997
Manhattan Office Buildings
================================================================================
Range Average
================================================================================
IRR 10.0% to 14.0% 11.71%
- --------------------------------------------------------------------------------
OAR/In 7.5% to 10.5% 8.88%
- --------------------------------------------------------------------------------
OAR/Out 7.0% to 11% 9.0%
- --------------------------------------------------------------------------------
(1) Averages
================================================================================
Source: Real Estate Investor Survey, Peter F. Korpacz & Associates
================================================================================
The wide range of investment parameters indicate that property risk and
yield are assessed to a particular investment property based on a variety of
variables. Risk is the primary determinant, and the risk variables include:
whether the property is purchased for cash or will be leveraged; whether current
contract rents are significantly above or below current market rents; the amount
and timing of tenant roll-overs; the risk to lease-up the property and the
strength of the market during the lease-up period; the durability of the cash
flow, and its ability to increase with inflation along with the creditworthiness
of the existing tenancy; investor demand for the property type; the
diversification of the metropolitan area; the property's location within the
local market and the supply and demand for the property type within the market;
and the effective age of the property.
================================================================================
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CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
Income Capitaization Approach
================================================================================
Our selection of the investment parameters utilized to estimate the market
value of the subject property, was based on the preceding data, including
Cushman & Wakefield's National Investor Survey, and the national investor
surveys provided by CB Korpacz. In our selection of the investment parameters
utilized to estimate the market value of the subject property, we have also
consulted members of Cushman & Wakefield's Financial Services Group and rates
derived from actual sales, as indicated in our Sales Comparison Approach, which
reflects the recent downward trend in going-in cap rates, particularly for well
located properties with upside potential. In our judgment, the investor survey
conclusions should be adjusted downward 50 to 100 basis points to allow for the
recent improvement in the marketplace.
Based upon the above, it is our opinion that an investor would require a
discount rate in the range of 11.0 to 11.5 percent with a terminal
capitalization rate ranging from 8.5 to 9.5 percent. Accordingly, we have
discounted the projected future pre-tax cash flows to be received by an equity
investor in the subject property to a present value from 11.0 to 11.5 percent at
25 basis point intervals. Discounting these cash flows over the range of yields
and terminal rates now being required by participants in the market for this
type of real estate places additional perspective upon our analysis. A valuation
matrix for the subject property is presented on the following page.
================================================================================
Valuation Matrix
605 Third Avenue - Market Value "As Is"
($000)
================================================================================
Terminal Capitalization Rates
----------------------------------------------------------
IRR 8.5% 9.0% 9.5%
- --------------------------------------------------------------------------------
11.00% $192,271 $187,153 $182,574
11.25% $189,094 $185,102 $179,635
11.50% $185,992 $181,121 $176,763
================================================================================
The value of the subject property varies with the discount rates and range
of terminal capitalization rates from approximately $176,763 to $192,271, as
rounded. Given consideration to all of the characteristics of the subject
property previously discussed, we feel that a prudent investor would require a
yield which falls near the middle aspect of the market range outlined above for
this property.
In view of the analysis presented, it is our opinion that the discounted
cash flow analysis indicates a market value of $180,000,000, as rounded, for the
subject property. The indices of investment generated through this indication of
value are presented as follows.
================================================================================
605 Third Avenue - Market Value "As Is"
New York, New York
================================================================================
Going-in Capitalization Rate 12.81
- --------------------------------------------------------------------------------
Terminal Capitalization Rate 9.5%
- --------------------------------------------------------------------------------
Equity Yield 11.22%
- --------------------------------------------------------------------------------
Price/SF of NRA $182.84
================================================================================
In the final analysis, it is our opinion that the value of the leased fee
estate in the land and improvements by the Income Approach is $180,000,000.
================================================================================
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CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
RECONCILIATION AND FINAL VALUE ESTIMATE
================================================================================
We have considered all of the traditional approaches to estimating market
value of commercial real estate in our analysis. Two of the three traditional
approaches were utilized, indicating the following values for the subject
property.
Sales Comparison Approach $180,000,000
Income Approach
Discounted Cash Flow Analysis $180,000,000
The Cost Approach has not been utilized in this report. The Cost Approach
requires an estimation of the cost to reproduce or replace the existing
improvements of the property. From this cost new of improvements accrued
depreciation from physical, functional and economic sources is deducted to
arrive at a cost less depreciation. The estimated land value is then added to
arrive at total value. The subjectivity of estimating accrued depreciation of
aged existing improvements limits the reliability of this approach. It is
questionable whether the subject property would be replaced today given the
condition of the Manhattan office leasing market. In addition, we know of few
investors who utilize replacement cost as the basis for their investment
decisions.
The Sales Comparison Approach consists of the collection and analysis of
data relevant to actual sales of properties deemed comparable to the subject
property. Properties which have been sold are compared to the property under
appraisal and adjustments to the sale prices are made based on differences
between the subject property and the comparable sales. Adjustments are typically
made for location, date of sale, building size, quality of construction and
other relevant characteristics.
The Income Approach converts anticipated future cash flows into a present
value estimate. This method is based on the premise that the motivation for a
property purchase is a function of the anticipation of future benefits to be
gained from the investment. The potential purchaser, in essence, will trade the
purchase price of the property for a projected income stream to be received in
the future. Conversion of the anticipated cash flow into a value indication
commonly occurs in the form of discounted cash flow analysis or application of a
single capitalization rate to a stabilized income estimate.
These three traditional methods of estimating the market value of
commercial real estate are not mutually exclusive approaches to deriving an
estimate of most probable selling price, but are inter-dependent methodologies,
each relying on components from at least one of the other approaches. Hence, the
Cost Approach requires extensive market data to derive estimates of depreciation
and to determine the value of land as if vacant. This approach may also require
income data in order to make adjustments for functional and economic
obsolescence. The Sales Comparison Approach requires application of methods from
the Income Approach in order to make adjustments for differences in income that
have influenced the sale price. Consideration of market data is also required
for the Income Approach in the selection and application of equity,
capitalization and discount rates, and estimation of income and expenses.
Consequently, it is our opinion that the purchasers and sellers, at least
intuitively, consider components of all three approaches in the process of
negotiating an acceptable price for a particular property.
================================================================================
-85-
CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
---------------------------
<PAGE>
Reconciliation and Final Value Estimate
================================================================================
It is the Income Approach, however, that is logically considered the most
appropriate technique for estimating the value of income-producing property. Not
only does this approach represent the most direct and accurate simulation of
market behavior, it is the method explicitly employed by buyers and sellers in
acquisition and disposition decisions. Therefore, following the implied dictum
of the market, we have used an approach based primarily on projected income as
the foundation for our valuation of the subject property.
There are several additional reasons why the Sales Comparison Approach
does not form the primary basis of our value estimate for the subject property.
The quantity and quality of market information inhibits the use of the Sales
Comparison Approach. Inadequacy of information regarding gross and net income,
lease details and expenses of comparable sales often deters accurate and
relevant adjustments of unit price indicators. Comparison at one dollar per
square foot level precludes the analysis of those key factors which form the
basis for projections on which the purchase decision was made.
As a result of our analysis, it is our opinion that the market value of
the leased fee estate in the subject property, subject to the assumptions,
limiting conditions, certifications, and definitions, as of July 30, 1997, is:
ONE HUNDRED EIGHTY MILLION DOLLARS
$180,000,000.
Marketing Time
Marketing time is an estimate of the time that might be required to sell a
real property interest at the appraised value. Marketing time is presumed to
start on the effective date of the appraisal. Marketing time occurs subsequent
to the effective date of the appraisal and exposure time is presumed to precede
the effective date of the appraisal. The estimate of marketing time uses some of
the same data analyzed in the process of estimating reasonable exposure time and
it is not intended to be a prediction of a date of sale.
We believe, based on the assumptions employed in our analysis, as well as
our selection of investment parameters for the subject, our value conclusions
represent a price achievable within one year's marketing time on the open
market.
================================================================================
-86-
CUSHMAN &
WAKEFIELD(R)
---------------------------
VALUATION ADVISORY SERVICES
---------------------------
<PAGE>
ASSUMPTIONS AND LIMITING CONDITIONS
================================================================================
"Appraisal" means the appraisal report and opinion of value stated therein; or
the letter opinion of value, to which these Assumptions and Limiting Conditions
are annexed.
"Property" means the subject of the Appraisal.
"C&W" means Cushman & Wakefield, Inc. or its subsidiary which issued the
Appraisal.
"Appraiser(s)" means the employee(s) of C&W who prepared and signed the
Appraisal.
This appraisal is made subject to the following assumptions and limiting
conditions:
1. No opinion is intended to be expressed and no responsibility is assumed
for the legal description or for any matters which are legal in nature or
require legal expertise or specialized knowledge beyond that of a real
estate appraiser. Title to the Property is assumed to be good and
marketable and the Property is assumed to be free and clear of all liens
unless otherwise stated. No survey of the Property was undertaken.
2. The information contained in the Appraisal or upon which the Appraisal is
based has been gathered from sources the Appraiser assumes to be reliable
and accurate. Some of such information may have been provided by the owner
of the Property. Neither the Appraiser nor C&W shall be responsible for
the accuracy or completeness of such information, including the
correctness of estimates, opinions, dimensions, sketches, exhibits and
factual matters.
3. The opinion of value is only as of the date stated in the Appraisal.
Changes since that date in external and market factors or in the Property
itself can significantly affect property value.
4. The Appraisal is to be used in whole and not in part. No part of the
Appraisal shall be used in conjunction with any other appraisal.
Publication of the Appraisal or any portion thereof without the prior
written consent of C&W is prohibited. Except as may be otherwise stated in
the letter of engagement, the Appraisal may not be used by any person
other than the party to whom it is addressed or for purposes other than
that for which it was prepared. No part of the Appraisal shall be conveyed
to the public through advertising, or used in any sales or promotional
material without C&W's prior written consent. Reference to the Appraisal
Institute or to the MAI designation is prohibited.
5. Except as may be otherwise stated in the letter of engagement, the
Appraiser shall not be required to give testimony in any court or
administrative proceeding relating to the Property or the Appraisal.
================================================================================
-87-
CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
Assumptions and Limiting Conditions
================================================================================
6. The Appraisal assumes (a) responsible ownership and competent management
of the Property; (b) there are no hidden or unapparent conditions of the
Property, subsoil or structures that render the Property more or less
valuable (no responsibility is assumed for such conditions or for
arranging for engineering studies that may be required to discover them);
(c) full compliance with all applicable federal, state and local zoning
and environmental regulations and laws, unless noncompliance is stated,
defined and considered in the Appraisal; and (d) all required licenses,
certificates of occupancy and other governmental consents have been or can
be obtained and renewed for any use on which the value estimate contained
in the Appraisal is based.
7. The physical condition of the improvements considered by the Appraisal is
based on visual inspection by the Appraiser or other person identified in
the Appraisal. C&W assumes no responsibility for the soundness of
structural members nor for the condition of mechanical equipment, plumbing
or electrical components.
8. The forecasted potential gross income referred to in the Appraisal may be
based on lease summaries provided by the owner or third parties. The
Appraiser has not reviewed lease documents and assumes no responsibility
for the authenticity or completeness of lease information provided by
others. C&W recommends that legal advice be obtained regarding the
interpretation of lease provisions and the contractual rights of parties.
9. The forecasts of income and expenses are not predictions of the future.
Rather, they are the Appraiser's best estimates of current market thinking
on future income and expenses. The Appraiser and C&W make no warranty or
representation that these forecasts will materialize. The real estate
market is constantly fluctuating and changing. It is not the Appraiser's
task to predict or in any way warrant the conditions of a future real
estate market; the Appraiser can only reflect what the investment
community, as of the date of the Appraisal, envisages for the future in
terms of rental rates, expenses, supply and demand.
10. Unless otherwise stated in the Appraisal, the existence of potentially
hazardous or toxic materials which may have been used in the construction
or maintenance of the improvements or may be located at or about the
Property was not considered in arriving at the opinion of value. These
materials (such as formaldehyde foam insulation, asbestos insulation and
other potentially hazardous materials) may adversely affect the value of
the Property. The Appraisers are not qualified to detect such substances.
C&W recommends that an environmental expert be employed to determine the
impact of these matters on the opinion of value.
11. Unless otherwise stated in the Appraisal, compliance with the requirements
of the Americans With Disabilities Act of 1990 (ADA) has not been
considered in arriving at the opinion of value. Failure to comply with the
requirements of the ADA may adversely affect the value of the property.
C&W recommends that an expert in this field be employed.
================================================================================
-88-
CUSHMAN &
WAKEFIELD(R)
---------------------------
VALUATION ADVISORY SERVICES
---------------------------
<PAGE>
CERTIFICATION OF APPRAISAL
================================================================================
I certify that, to the best of my knowledge and belief:
1. Travis W. Walsh, MAI, CRE inspected the property,.
2. The statements of fact contained in this report are true and correct.
3. The reported analyses, opinions, and conclusions are limited only by the
reported assumptions and limiting conditions, and are my personal,
unbiased professional analyses, opinions, and conclusions.
4. I have no present or prospective interest in the property that is the
subject of this report, and I have no personal interest or bias with
respect to the parties involved.
5. My compensation is not contingent upon the reporting of a predetermined
value or direction in value that favors the cause of the client, the
amount of the value estimate, the attainment of a stipulated result, or
the occurrence of a subsequent event. The appraisal assignment was not
based on a requested minimum valuation, a specific valuation or the
approval of a loan.
6. No one provided significant professional assistance to the person signing
this report.
7. My analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation and the Code of
Professional Ethics and the Standards of Professional Appraisal Practice
of the Appraisal Institute.
8. The use of this report is subject to the requirements of the Appraisal
Institute relating to review by its duly authorized representatives.
9. As of the date of this report, Travis W. Walsh, MAI, CRE completed the
requirements of the continuing education program of the Appraisal
Institute.
/s/Travis W. Walsh
Travis W. Walsh, MAI, CRE
Director
Valuation Advisory Services
State Certified Appraiser No. 46000005074
================================================================================
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CUSHMAN &
WAKEFIELD(R)
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VALUATION ADVISORY SERVICES
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<PAGE>
ADDENDA
================================================================================
IMPROVED PROPERTY SALES
PRIME TENANT RENT ROLL
APPRAISERS' QUALIFICATIONS
================================================================================
-90-
<PAGE>
OFFICE BUILDING SALE 1
================================================================================
Location Data
Property Name: American Home Products Building
Location: 685 Third Avenue Btwn. East 43rd and
44th Streets
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 1317, LOT 1
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 31,127 Sqft Zoning: C5-3; Restricted
Cent'l Com'l
Gross Building Area: 595,632 SF
Net Rentable Area: 584,336 SF
Usable Building Area: 584,336 SF
Year Built: 1961
# of Stories: 31
Parking: None
Condition: Good
Exterior Walls: Brick Veneer
Amenities: All Available
Class: A
Sale Data
Transaction Type: Contract
Date of Transaction: 06/97
Marketing Time: N/A
Grantor: Professional Data Mgmt. Inc.
c/o Leucadia Nat'l
Grantee: Amroc/Black Acre Grp./Jeff Citron
Document No.: UNDER CONTRACT.
Sale Price: $100,000,000
Financing: Not Available
Cash Equivalent Price: $100,000,000
Required Capital Cost: $0
Adjusted Sale Price: $100,000,000
Verification: C&W VAS NY 6/97
Financial Data
Assumptions & Forecast: N/A
Occupancy at Sale: 34%
Existing or Pro Forma Income: N/A
TOTAL P.S.F.
----- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: N/A N/A
THIRD AVE 685(97)
<PAGE>
OFFICE BUILDING SALE 1
================================================================================
Analysis
Value Indicators: Price Per S.F.
Overall Capitalization
Rate (OAR): N/A%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $171.13
Comments
685 Third Avenue comprises two interconnected buildings; the 240,000+/-
SF. Southern tower built in 1961 and the 355,000+/- SF. Northern tower
built in 1976. The building was purchased by the grantor, Leucadia
National Corp. in 1994, with the intention of renovating the property for
their own use. The property is reportedly 34 percent leased and still
requires substantial refurbishment. The building is reportedly under
contract to the grantees, a consortium including the Black Acre Group,
Amroc and Jeff Citron, for $100 million.
THIRD AVE 685(97)
<PAGE>
OFFICE BUILDING SALE 2
================================================================================
Location Data
Property Name: 31 West 52nd Street
Location: 31 West 52nd Street Btwn. Fifth and
Sixth Avenues
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 1268, LOT 1002
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 45,868 Sqft Zoning: C5-2.51
Restricted Cent'l Com'l
Gross Building Area: 711,791 SF
Net Rentable Area: 659,724 SF
Usable Building Area: 659,724 SF
Year Built: 1986
# of Stories: 30
Parking: 120 space parking garage
Condition: Good
Exterior Walls: Stone
Amenities: All Available
Class: A
Sale Data
Transaction Type: Contract
Date of Transaction: 04/97
Marketing Time: N/A
Grantor: 40 West 53 Partnership c/o
G. Hines/Kuwaiti Invest
Grantee: Deutsche Bank, AG
Document No.: UNDER CONTRACT
Sale Price: $278,000,000
Financing: Not Available
Cash Equivalent Price: $278,000,000
Required Capital Cost: $0
Adjusted Sale Price: $278,000,000
Verification: C&W-VAS, NY 7/97
Financial Data
Assumptions & Forecast: N/A
Occupancy at Sale: N/A
Existing or Pro Forma Income: N/A
TOTAL P.S.F.
----- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: N/A N/A
W 52 ST 31
<PAGE>
OFFICE BUILDING SALE 2
================================================================================
Analysis
Value Indicators:
Overall Capitalization
Rate (OAR): N/A%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $421.39
Comments
This property was reportedly under contract to Deutsche Bank, AG, the
building's largest tenant.
W 52 ST 31
<PAGE>
OFFICE BUILDING SALE 3
================================================================================
Location Data
Property Name: 90 Park Avenue - Mortgage
Location: 90 Park Avenue Btwn. East 39th &
East 40th Streets
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 869 LOT 34
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 38,032 Sqft Zoning: C5-3/C5-2.5
Rest Cent Com'l
Gross Building Area: 877,869 SF
Net Rentable Area: 877,869 SF
Usable Building Area: 877,869 SF
Year Built: 1964
# of Stories: 41
Parking: 156 space below grade parking
Condition: Good
Exterior Walls: Steel & Glass
Amenities: N/A
Class: A
Sale Data
Transaction Type: Sale
Date of Transaction: 04/97
Marketing Time: N/A
Grantor: Sumitomo c/o Brad Giliman
Grantee: Vornado Realty c/o Steven Roth
Document No.: SEE COMMENTS
Sale Price: $185,000,000
Financing: See Comments
Cash Equivalent Price: $185,000,000
Required Capital Cost: $0
Adjusted Sale Price: $185,000,000
Verification: C&W VAS NY 7/97
Financial Data
Assumptions & Forecast: Advisor
Occupancy at Sale: 82.7%
Existing or Pro Forma
Income: Pro Forma
TOTAL P.S.F.
----- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: $19,607,142 $22.33
PARK AVE 90
<PAGE>
OFFICE BUILDING SALE 3
================================================================================
Analysis
Value Indicators: Price Per S.F.
Overall Capitalization
Rate (OAR): 10.60%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $210.74
Comments
The buyers, Vornado Realty, purchased mortgages on this property following
the threat of foreclosure by Sumitomo There was no controlling interest
included in the transaction.
PARK AVE 90
<PAGE>
OFFICE BUILDING SALE 4
================================================================================
Location Data
Property Name: 1370 Avenue Of The Americas - Mortgage
Location: 1370 Avenue Of The Americas A/K/A 71
West 55th St & 64-68 West 56th St
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 1271 LOT 71
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 15,276 Sqft Zoning: C6-6,
Midtown Gen'l Com'l
Gross Building Area: 387,298 SF
Net Rentable Area: 381,345 SF
Usable Building Area: 381,345 SF
Year Built: 1971
# of Stories: 35
Parking: Attached garage
Condition: Good
Exterior Walls: Glass Panels
Amenities: All Available
Class: A
Sale Data
Transaction Type: Contract
Date of Transaction: 03/97
Marketing Time: N/A
Grantor: St. Andrews Associates c/o Peter Sharp
Grantee: S.L. Green Real Estate c/o Steve Green
Document No.: N/A
Sale Price: $55,000,000
Financing: See Comments
Cash Equivalent Price: $55,000,000
Required Capital Cost: $0
Adjusted Sale Price: $55,000,000
Verification: C&W-VAS, NY 5/97
Financial Data
Assumptions & Forecast: Advisor
Occupancy at Sale: N/A
Existing or Pro Forma Income: N/A
TOTAL P.S.F.
----- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: N/A N/A
SIXTH AVE 1370
<PAGE>
OFFICE BUILDING SALE 4
================================================================================
Analysis
Value Indicators: Price Per S.F.
Overall Capitalization
Rate (OAR): N/A%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $144.23
Comments
This sale involved the purchase of the mortgage on the property by the
grantees, S.L. Green Real Estate. The buyer's reported intent is to add
the mixed-use office building to a proposed REIT.
SIXTH AVE 1370
<PAGE>
OFFICE BUILDING SALE 5
================================================================================
Location Data
Property Name: 527 Madison Avenue
Location: 527 Madison Avenue S/E/C East 54th
Street
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 1289, LOT 52
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 12,675 Sqft Zoning: C5-3;
Restricted Gen'l
Com'l
Gross Building Area: 248,321 SF
Net Rentable Area: 201,148 SF
Usable Building Area: 215,686 SF
Year Built: 1986
# of Stories: 26
Parking: 40-45 space parking garage
Condition: Excellent
Exterior Walls: Stone
Amenities: Quality retail, small floor plates
Class: A
Sale Data
Transaction Type: Sale
Date of Transaction: 02/97
Marketing Time: 12 months
Grantor: 527 Madison Holding c/o Louis Dreyfus
Property Grp
Grantee: Cornerstone Properties Inc.
c/o Scott Darymple
Document No.: LIBER 2439 PAGE 604 Rec. Date: 03/28/97
Sale Price: $67,000,000
Financing: Cash to Seller
Cash Equivalent Price: $67,000,000
Required Capital Cost: $0
Adjusted Sale Price: $67,000,000
Verification: C&W - VAS 3/97
Financial Data
Assumptions & Forecast: Appraiser
Occupancy at Sale: 88%
Existing or Pro Forma Income: Existing
TOTAL P.S.F.
----- ------
Potential Gross Income: $12,104,748 $60.18
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: $12,104,748 $60.18
Expenses: $4,773,960 $23.73
Net Operating Income: $7,330,788 $36.44
MADISON AVE 527
<PAGE>
OFFICE BUILDING SALE 5
================================================================================
Analysis
Value Indicators: Direct Cap, DCF and P.S.F.
Overall Capitalization
Rate (OAR): 10.94%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): 5.54
Operating Expense Ratio (OER): 39.44%
Price Per Square Foot: $333.09
Comments
The property also contains a 9,271+/- square foot garage area and 5,267+/-
square feet of storage area which is included in the usable size. The
building was anchored by a foreign Japanese bank at the time of sale with
approximately 36% of the rental office space. The anchor tenant lease was
to expire in 2001. Approximately 20-25% of the office space was due for
renewal in 1997. The financial data was based on 1996 stabilized income
and expenses prior to the sale. According to a banker financing the sale,
the buyer's purchase price and pro-forma implied an overall rate of 10.8%.
The building contains small floorplates and caters to smaller-boutique
type office tenants. Asking rents for the vacant space at sale ranged from
$50 to $54 per square foot.
MADISON AVE 527
<PAGE>
OFFICE BUILDING SALE 6
================================================================================
Location Data
Property Name: The Continental Can Building
Location: 125 Park Avenue A/K/a 100 East 42nd
Street N/E/C East 41st Street
City: New York
County: New York
State/Zip: New York
Assessor's Parcel No(s): BLOCK 1296 LOT 1
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 24,785 Sqft Zoning: C5-3,
Restricted Cent'l
Com'l
Gross Building Area: 548,582 SF
Net Rentable Area: 445,437 SF
Usable Building Area: 445,437 SF
Year Built: 1922
# of Stories: 26
Parking: None
Condition: Good
Exterior Walls: Stone
Amenities: All Available
Class: A
Sale Data
Transaction Type: Sale
Date of Transaction: 01/97
Marketing Time: N/A
Grantor: Sutom N.V. c/o Pyne Co. Ltd.
Grantee: General Electric Capital Corp.
Document No.: LIBER 2413 PAGE 578 Rec. Date: 01/27/97
Sale Price: $92,652,000
Financing: Cash to Seller
Cash Equivalent Price: $92,652,000
Required Capital Cost: $0
Adjusted Sale Price: $92,652,000
Verification: C& W VAS NY 1/97
Financial Data
Assumptions & Forecast: N/A
Occupancy at Sale: 77%
Existing or Pro Forma Income: N/A
TOTAL P.S.F.
----- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: N/A N/A
PARK AVE 125
<PAGE>
OFFICE BUILDING SALE 6
================================================================================
Analysis
Value Indicators: Price Per S.F.
Overall Capitalization
Rate (OAR): N/A%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $208.00
Comments
The building was sold following a foreclosure. The purchaser was one of
the Property's major tenants.
PARK AVE 125
<PAGE>
OFFICE BUILDING SALE 7
================================================================================
Location Data
Property Name: 30 Rockefeller Plaza - NBC Condo Space
Location: 1250 Avenue Of The Americas Between West
50th and 51st Streets New York
City: New York
County: New York
State/Zip: New York 10019
Assessor's Parcel No(s): BLOCK 1265, LOT 1001
Atlas Reference: N/A
Physical Data
Type: CBD
Land Area: 106,199 Sqft Zoning: C5-2.5;
Restricted Cent'l
Com'l
Gross Building Area: 2,700,000 SF
Net Rentable Area: 1,561,277 SF
Usable Building Area: 1,561,277 SF
Year Built: 1932
# of Stories: 70
Parking: None
Condition: Good
Exterior Walls: Masonry
Amenities: Rockefeller Center Retail Concourse
Class: A
Sale Data
Transaction Type: Sale
Date of Transaction: 07/96
Marketing Time: N/A
Grantor: RCP Assoc. c/o Tishman Speyer
Properties, L.P.
Grantee: NBC Trust 1996A c/o National
Broadcasting Corp.
Document No.: LIBER 2347, PAGE 678 Rec. Date: 07/22/96
Sale Price: $440,000,000
Financing: Cash to Seller
Cash Equivalent Price: $440,000,000
Required Capital Cost: $0
Adjusted Sale Price: $440,000,000
Verification: C&W - VAS - 11/96
Financial Data
Assumptions & Forecast: Appraiser
Occupancy at Sale: 100%
Existing or Pro Forma Income: Existing
TOTAL P.S.F.
-------- ------
Potential Gross Income: N/A N/A
Vacancy and Credit Loss: N/A N/A
Effective Gross Income: N/A N/A
Expenses: N/A N/A
Net Operating Income: N/A N/A
ROCKEFELLER PLZ 30
<PAGE>
OFFICE BUILDING SALE 7
================================================================================
Analysis
Value Indicators: DCF
Overall Capitalization
Rate (OAR): N/A%
Projected IRR: N/A%
Effective Gross Multiplier
(EGIM): N/A
Operating Expense Ratio (OER): N/A%
Price Per Square Foot: $281.82
Comments
The television network purchased a condominium interest within their
headquarters building. The condominium was created in December 1988 and
the tenant had an option to buy the units devoted to studio and technical
use.
NBC acquired most of the office and studio space it occupied representing
approximately 20 percent of the complex' total footage. This includes
NBC's 28-floor headquarters facility at 30 Rockefeller Plaza and all of
the adjacent Studio and GE-West buildings. One-third of the space consists
of broadcasting facilities for such programs as, "The NBC Nightly News
with Tom Brokaw", "Dateline NBC", "Saturday Night Live", "Late Night with
Conan O'Brien" and local WNBC news.
The transaction did not include the "Today Show" studio at 10 Rockefeller
Plaza. However, the purchase agreement reportedly gives NBC extension
options for the space. The network's current lease extended for another 20
years from the date of sale and included substantial above-market
increases to take effect in late 1997. NBC has been located at the complex
since it opened in 1933.
The purchase was subject to a number of conditions, including confirmation
by the U.S. Bankruptcy Court and approval by New York City.
ROCKEFELLER PLZ 30
<PAGE>
605 THIRD AVENUE
[ILLEGIBLE]: 6596
REVISION: 8/12/98 @ 14:00
RENT ROLL AS OF 8/1997
CALENDAR YEAR BASIS)
8/15/97 @ 9:16
<TABLE>
<CAPTION>
TENANT/
LEASE TYPE AND DATES/ BASE RENT/ OVERAGE/ SALES (000)/ RECOVERIES/ REVENUE/
SQUARE FEET PER SF PER SF PER SF PER SF PER SF
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
#1 - SUITE 1,2,3
UNISYS
BASE LEASE 5/89-4/99 3,353,671 0 0 746,909 4,100,580
77,144 SF 43.47 0.00 0.00 9.68 53.15
#2 - SUITE 1
[ILLEGIBLE]
BASE LEASE 5/65-4/06 460,205 0 0 68,078 528,283
10,800 SF 42.61 0.00 0.00 6.30 48.92
#4 - SUITE 4,5-7,9,
JOHN WILEY
BASE LEASE 5/88-4/03 8,603,634 0 0 2,029,881 10,633,515
212,267 SF 40.53 0.00 0.00 9.56 50.09
#5 - SUITE 9/PART
JOHN WILEY
BASE LEASE 5/88-4/03 671,212 0 0 163,474 834,686
16,560 SF 40.53 0.00 0.00 9.87 50.40
#10 - SUITE 19-22
ROLLINS BURDICK
BASE LEASE 5/88-4/00 2,967,590 0 0 780,891 3,748,481
71,080 SF 41.75 0.00 0.00 10.99 52.74
#12 - SUITE 25
SNOW BECKER
OPTION 1 9/95- 8/05 564,198 0 0 20,585 584,783
17,770 SF 31.75 0.00 0.00 1.16 32.91
#13 - SUITE 26
NY JOB DEVELOPMENT
BASE LEASE 5/85-4/00 741,898 0 0 340,366 1,082,264
17,770 SF 41.75 0.00 0.00 19.15 60.90
#14 - SUITE 30,31
GRANT THORTON
OPTION 1 9/94-8/99 1,250,651 0 0 287,624 1,538,275
35,792 SF 34.94 0.00 0.00 8.04 42.98
#15 - SUITE BSMT
GRANT THORTON
BASE LEASE 9/79-8/99 20,713 0 0 14,277 34,990
2,000 SF 10.36 0.00 0.00 7.14 17.50
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
TENANT/
LEASE TYPE AND DATES/ BASE RENT/ OVERAGE/ SALES (000)/ RECOVERIES/ REVENUE/
SQUARE FEET PER SF PER SF PER SF PER SF PER SF
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
#16 - SUITE PT 8
ESPN
BASE LEASE 5/89-10/04 1,048,381 0 0 224,218 1,272,599
27,055 SF 38.75 0.00 0.00 8.29 47.04
#17 - SUITE 12
UNIVISION
OPTION 1 1/96-6/10 946,259 0 0 36,219 982,478
26,982 SF 35.07 0.00 0.00 1.34 36.41
#18 - SUITE 44
STINNES CORP
BASE LEASE 10/90-2/05 513,968 0 0 81,042 595,010
12,930 SF 39.75 0.00 0.00 6.27 46.02
#19 - SUITE 43
STINNES
BASE LEASE 3/90-2/05 418,170 0 0 66,184 484,354
10,520 SF 39.75 0.00 0.00 6.29 46.04
#20 - SUITE 32
GRANT THORTON
BASE LEASE 7/89-8/99 621,886 0 0 143,812 765,698
17,896 SF 34.75 0.00 0.00 8.04 42.79
#21 - SUITE 29
SHEARS ON
BASE LEASE 5/89-4/99 630,622 0 0 160,871 791,493
17,890 SF 35.25 0.00 0.00 8.99 44.24
#22 - SUITE PT 8
ESPN
BASE LEASE 7/89-10/04 278,651 0 0 59,593 338,244
7,191 SF 38.75 0.00 0.00 8.29 47.04
#23 - SUITE 27
HUBER LAWRENCE
BASE LEASE 9/90-3/06 783,564 0 0 116,320 899,884
18,768 SF 41.75 0.00 0.00 6.20 47.95
#24 - SUITE 34
DAVIDOFF & MALITO
BASE LEASE 6/91-8/04 592,251 0 0 83,642 675,893
17,947 SF 33.00 0.00 0.00 4.66 37.66
#25 - SUITE 36-42
NEUBERGER & BERMAN
BASE LEASE 6/91-2/07 4,514,169 0 0 844,263 5,358,432
136,793 SF 33.00 0.00 0.00 6.17 39.17
</TABLE>
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
TENANT/
LEASE TYPE AND DATES/ BASE RENT/ OVERAGE/ SALES (000)/ RECOVERIES/ REVENUE/
SQUARE FEET PER SF PER SF PER SF PER SF PER SF
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
#6 - SUITE 35
NIMS HOWE
BASE LEASE 8/91-7/07 696,880 0 0 57,925 754,805
17,984 SF 38.75 0.00 0.00 3.22 41.97
#27 - SUITE 2
NEUBERGER & BERMAN
BASE LEASE 6/91-2/07 119,352 0 0 0 119,352
29,838 SF 4.00 0.00 0.00 0.00 4.00
#30 - SUITE 18
PODELL
BASE LEASE 4/93-3/09 529,550 0 0 49,910 579,460
17,800 SF 29.75 0.00 0.00 2.80 32.55
#31 - SUITE BSMT
JOHN WILEY
BASE LEASE 3/92-4/03 23,785 0 0 0 23,785
1,420 SF 16.75 0.00 0.00 0.00 16.75
#32 - SUITE BSMT
NEUBERGER
BASE LEASE 6/92-2/07 50,250 0 0 0 50,250
3,000 SF 16.75 0.00 0.00 0.00 16.75
#33 - SUITE BSMT
PODELL
BASE LEASE 4/94-3/09 5,000 0 0 0 5,000
500 SF 10.00 0.00 0.00 0.00 10.00
#34 - SUITE 11
ESPN
BASE LEASE 11/93-10/04 375,832 0 0 35,022 410,854
12,633 SF 29.75 0.00 0.00 2.77 32.52
#37 - SUITE 16
ESANU KATSKY
BASE LEASE 7/96-6/08 569,107 0 0 33,608 602,715
19,867 SF 28.65 0.00 0.00 1.69 30.34
#38 - SUITE 33
STEINHARDT
BASE LEASE 10/94-9/97 372,461 0 0 21,852 394,313
17,896 SF 20.81 0.00 0.00 1.22 22.03
#39 - SUITE PT 43
STINNES
BASE LEASE 5/96-2/05 83,873 0 0 13,450 97,323
2,110 SF 39.75 0.00 0.00 6.37 46.12
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
TENANT/
LEASE TYPE AND DATES/ BASE RENT/ OVERAGE/ SALES (000)/ RECOVERIES/ REVENUE/
SQUARE FEET PER SF PER SF PER SF PER SF PER SF
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
#41 - SUITE 23
CHARTWELL LEISURE
BASE LEASE 7/96-3/07 419.469 0 0 12,928 432,397
18,695 SF 22.44 0.00 0.00 0.69 23.13
#42 - SUITE 24
AIM RESOURCES
BASE LEASE 8/95-10/05 41,400 0 0 5,059 46,459
1,656 SF 25.00 0.00 0.00 3.05 28.05
#43 - SUITE PT 24
AIM RESOURCES
BASE LEASE 5/95-10/05 151,674 0 0 5,756 157,430
5,919 SF 25.62 0.00 0.00 0.97 26.60
#44 - SUITE PT 24
RAND ROSENZWEIG
BASE LEASE 5/95-10/05 294,163 0 0 11,193 305,356
8,847 SF 33.25 0.00 0.00 1.27 34.52
#45 - SUITE PT 15
SYLVOR
BASE LEASE 5/95-6/00 190,125 0 0 6,835 196,960
6,084 SF 31.25 0.00 0.00 1.12 32.37
#46 - SUITE PART 15
MA & SHANG
BASE LEASE 7/95-6/08 64,800 0 0 0 64,800
3,100 SF 20.90 0 00 0.00 0.00 20.90
#47 - SUITE PART 28
TRAVELERS
BASE LEASE 7/95-6/04 22,800 0 0 0 22,800
700 SF 32.57 0.00 0.00 0.00 32.57
#48 - SUITE PART 28
PSS
BASE LEASE 3/95-4/00 10,768 0 0 0 10,768
455 SF 23.67 0.00 0.00 0.00 23.67
#49 - SUITE PART 28
TCI ASSOCIATES
BASE LEASE 3/95-4/00 10,768 0 0 0 10,768
455 SF 23.67 0.00 0.00 0.00 23.67
#51 - SUITE GARAGE
HERTZ
BASE LEASE 1/95-12/04 598,217 0 0 171,193 769,410
1 SF 598,217.00 0.00 0.00 171,193.00 769,410.00
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
TENANT/
LEASE TYPE AND DATES/ BASE RENT/ OVERAGE/ SALES (000)/ RECOVERIES/ REVENUE/
SQUARE FEET PER SF PER SF PER SF PER SF PER SF
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
#52 - SUITE KIOSK
PASQUA
BASE LEASE 1/94-1/04 19,080 0 0 534 19,614
500 SF 38.16 0.00 0.00 1.07 39.23
#53 - SUITE GROUND
METRO SOUTH
BASE LEASE 2/94-1/04 10,750 0 0 214 10,964
200 SF 53.75 0.00 0.00 1.07 54.82
#54 - SUITE PART 24
BAND ROSENZWEIG
BASE LEASE 8/95-10/05 55,400 0 0 2,949 58,349
2,216 SF 25.00 0.00 0.00 1.33 26.33
#55 - SUITE PART 14
UNIVISION
BASE LEASE 7/96-6/10 309,738 0 0 6,155 315,893
8,832 SF 35.07 0.00 0.00 0.70 35.77
#56 - SUITE PART 28
SNOW BECKER
BASE LEASE 1/96-8/05 223,125 0 0 7,761 230,886
7,500 SF 29.75 0.00 0.00 1.03 30.78
#57 - SUITE PART 11
ESPN
BASE LEASE 7/96-10/04 110,418 0 0 2,835 113,253
6,795 SF 16.25 0.00 0.00 0.42 16.67
#58 - SUITE PART 14
ARMY CORP ENGINEER
BASE LEASE 10/96-9/01 238,125 0 0 8,011 246,136
7,500 SF 31.75 0.00 0.00 1.07 32.82
----------------------------------------------------------------------
TOTALS 34,578,596 0 0 6,721,439 41,300,044
957,658 SF 36.11 0.00 0.00 7.02 43.13
======================================================================
</TABLE>
<PAGE>
QUALIFICATIONS OF TRAVIS W. WALSH
================================================================================
Professional Affiliations
Appraisal Institute (MAI Certificate No. 6260)
New York Metropolitan Chapter
American Society of Real Estate Counselors (CRE Certificate No. 1391) New York
Chapter
New York State Certified as a Real Estate General Appraiser (Certificate No.
46000005074)
New York State Licensed Real Estate Broker
The Real Estate Board of New York, Inc.
Real Estate Appraisal Experience
Actively involved in the and appraisal of real estate since 1972. Entered the
real estate business in 1972 with The Equitable Life Assurance Society of the
United States. Subsequently held positions with Security Mortgage Investors and
with the Franklin Savings Bank of New York as a Staff Appraiser. In 1977 joined
the Appraisal Division of Cushman & Wakefield, Inc. as a Staff Appraiser.
Commenced employment as an Appraiser and Consultant with Henry Boeckmann, Jr.
and Associates, Inc. in 1979; subsequently became Vice President and was
appointed Manager of the Stamford, Connecticut office. Joined Cushman &
Wakefield, Inc., New York Appraisal Services 1983. Named Assistant Vice
President in 1988 and named Director in 1990.
Assignments have involved a wide variety of existing and proposed real
properties including: office complexes, shopping centers, industrial properties,
hotels and multifamily housing. Assignments have been completed for mortgage
purposes, estates, certiorari proceedings and arbitration hearings, to aid in
the decision making process in the acquisition, disposition and marketing of
real estate and to determine a property's most profitable use.
Education
Past Lecturer - New York University - Real Estate Institute
Appraisal Institute Courses:
Investment Analysis (Course VI)
Urban Properties (Course II)
Capitalization Theory & Techniques (Course lB)
Basic Appraisal Principles, Methods & Techniques (Course lA)
Manhattan College, Bronx, New York, Bachelor of Science, (Business
Administration), 1972
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study
THREE FOUNTAINS PLAZA
Southeast Corner of Platt Springs Road
and Emanuel Church Road
West Columbia, Lexington County,
South Carolina
Prepared by
O. Marshall Dodds, MAI
Date of Market Study - April 21, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
April 21, 1997
Mr. Steven R. Maeglin
Morgan Stanley & Co., Inc.
1585 Broadway
New York, New York 10036
Re: Market Study
Three Fountains Plaza
SEC Platt Springs Road
and Emanuel Church Road
West Columbia, Lexington County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that forms the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 21, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 41,440 square
feet of leaseable area. The center was constructed in 1986 and the Food Lion
store expanded during 1996. The anchor tenants are Food Lion and Revco and the
subject property is currently 95.17% occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Columbia is the state capital with the State House being located in downtown
Columbia. Also, the University of South Carolina Campus is located in the
downtown area. Fort Jackson, which is a large U.S. Army Training Facility is
located in the eastern section of the Metropolitan area. The city has numerous
specialized office activities such as: insurance, consulting services,
advertising, marketing, printing and financial services. Government,
distribution, finance and transportation are all important to Columbia, although
none are preeminent. Geography also gives Columbia a strategic location in the
industrial and commercial spheres.
The unemployment rate for Lexington County as of March, 1997 was 2.9 percent
while the statewide rate was 5.3 percent.
Neighborhood and Site
The neighborhood is located around the intersection of Platt Springs Road and
Emanuel Church Road. Several single family residential subdivisions are located
around this intersection and throughout the neighborhood. Most of the houses
throughout the neighborhood would be in the medium priced range ($75,000 to
$150,000). Commercial properties are located around the intersection of Platt
Springs Road and Emanuel Church Road including Subject, Caroline Square, fast
food restaurants, branch banks, convenience markets/self service gasoline
facilities and retail/service facilities.
Physical features are as follows:
1. Size 4.215 acres or 183,605 SF
2. Identity NEC Platt Springs Road & Emanuel Church Road
TMS# 6796-02-08
3. Shape Irregular
4. Topography Level on street grade
5. Accessability Good
6. Utilities Municipal
Physical Description
Building features are as follows:
1. Size (net) 41,450 SF
2. Layout & Design 1 story - food store, drug store, two shops
3. Parking Spaces 217
5.24 per 1,000 SF of net area
4. Construction Brick and Glass front with concrete block on side
and rear and metal seam roof.
1
<PAGE>
Market Position and Marketability Conclusions
The shopping center market within the area of subject is healthy at this time.
Subject is part of the Cayce-West Columbia area. In the overall survey there are
approximately 25 shopping centers with approximately 1,500,000 square feet. The
available square feet consists of approximately 140,000 square feet with the
availability rate being 9.33%. There are not any shopping centers under
construction at this time and one small center containing 25,000 square feet and
a neighborhood center (Piggly Wiggly, Shops, 44,318 square feet) are planned for
the overall market area. There is one vacant shop in subject property and the
Caroline Square Shopping Center located across the street has a vacant Rite-Aid
Drug Store. The operating history of these two centers have been good.
The subject property is in the middle of the neighborhood being at the
intersection of Platt Springs Road and Emanuel Church Road. The location of
subject is convenient to the single family dwellings that are located throughout
the neighborhood. A portion of the neighborhood is developed with the Columbia
Metropolitan Airport, but this has not hindered the overall development of the
neighborhood with the single family dwellings and the commercial development.
The Caroline Square Shopping Center is located across the street from subject
property and this center is very similar to subject. The rental range for the
shops is from $7.50 to $9.00 per square foot on a triple net basis. The Mills
Corner Shopping Center is a new center that was completed in 1995. This center
has rental rates ranging from $10.00 to $12.00 per square foot. The location of
Mills Corner is at the edge of subject neighborhood. The Woodberry Plaza is an
older center that has been expanded and renovated. Winn-Dixie and Revco are the
major tenants. The rental range for the shops is from $6.50 to $9.25 per square
foot. The average rental rate is $7.75. Red Bank Crossing is located at the edge
of the neighborhood. The major tenants are Winn-Dixie and Revco. The rents range
from $7.00 to $11.00 per square foot with the average being $9.88 per square
foot.
The subject property has two shops with one of the shops being leased at $7.50
per square foot and the other shop being vacant and on the market at $7.25 per
square foot. It is thought that these are reasonable rental rates for the
neighborhood.
The rental rate for the Food Lion store is $7.88 per square foot while the
rental rate for the Revco store is at $6.50 per square foot, but overage rents
are being paid on the Revco store.
The subject property has operated at a high occupancy rate and Food Lion has
recently expanded their store. The location of subject is strategic within the
neighborhood and convenient to shoppers throughout the neighborhood.
Trends:
The subject property is located in the southwest section of the metropolitan
area of Columbia. The development began approximately 25 years ago with single
family residential properties. Commercial developments have occurred around the
intersection of Platt Springs Road and Emanuel Church Road including subject
property and Caroline Square Shopping Center. The Columbia metropolitan Airport
is located in the neighborhood.
The demand and desirability for the neighborhood has been good. All trends are
favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Three Fountains Caroline Square Mills Corner
---------------------- ----------------------- -----------------------
b. Street 3979 Platt Springs NWC Platt Springs & NEC Augusta Road and
Road Emanuel Church Road Oak Drive
---------------------- ----------------------- -----------------------
c. City West Columbia, SC West Columbia, SC West Columbia, SC
---------------------- ----------------------- -----------------------
d. Distance from subject N/A Across street 2.5-3.0 mile
---------------------- ----------------------- -----------------------
e. Contact Edens Avant, Inc. Bobbie Culbertson Rex Pollard
---------------------- ----------------------- -----------------------
f. Phone 803-779-4420 803-750-1010 803-779-7777
---------------------- ----------------------- -----------------------
2. Attributes
a. Year built 1986 1984 1995
---------------------- ----------------------- -----------------------
b. Net sq. Ft. 41,450 40,155 50,000
---------------------- ----------------------- -----------------------
c. # building 1 1 1
---------------------- ----------------------- -----------------------
d. # stories 1 1 1
---------------------- ----------------------- -----------------------
e. Avg. Floor plate size (SF),
if office N/A N/A N/A
---------------------- ----------------------- -----------------------
f. # elevators N/A N/A N/A
---------------------- ----------------------- -----------------------
g. Parking Adequate Adequate Adequate
---------------------- ----------------------- -----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
---------------------- ----------------------- -----------------------
I. Vacancy % 4.83% 0% 0%
---------------------- ----------------------- -----------------------
j. Anchors, if Retail Food Lion, Revco Piggly Wiggly Piggly Wiggly
---------------------- ----------------------- -----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Woodberry Plaza Red Bank Crossing
----------------------- -----------------------
b. Street 3234 Augusta Road NWC South Lake Dr. &
Two Notch Rd.
----------------------- -----------------------
c. City West Columbia, SC Lexington, SC
----------------------- -----------------------
d. Distance from subject 2.5 miles 4 miles
----------------------- -----------------------
e. Contact Edens Avant, Inc. The Ogburn Co.
----------------------- -----------------------
f. Phone 803-779-4422 803-779-7777
----------------------- -----------------------
2. Attributes
a. Year built 1976 - Renov. 1994 1990
----------------------- -----------------------
b. Net sq. Ft. 82,920 53,500
----------------------- -----------------------
c. # building 1 1
----------------------- -----------------------
d. # stories 1 1
----------------------- -----------------------
e. Avg. Floor plate size (SF),
if office N/A N/A
----------------------- -----------------------
f. # elevators N/A N/A
----------------------- -----------------------
g. Parking Adequate Adequate
----------------------- -----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
----------------------- -----------------------
I. Vacancy % 0% 0%
----------------------- -----------------------
j. Anchors, if Retail Winn-Dixie, Revco, Winn-Dixie, Revco
Big Lots
----------------------- -----------------------
</TABLE>
Comments:
Comparable No. 1 is located across the street and has experienced a very high
occupancy rate. The lease with Rite-Aid expires and Dollar General will move
within a couple of months. Comparable No. 3 was renovated in 1994 and a new
Winn-Dixie Store was constructed. The former Winn-Dixie Store is now occupied by
Big Lots. Shops are occupied. Comparable No. 4 was built in 1990. The Winn-Dixie
store has been expanded. The operating history has been good.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A N/A
----------------------- ----------------------- ----------------------
b. Shop Space $7.50 $7.50 - $9.00 $10.00 - $12.00
----------------------- ----------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
----------------------- ----------------------- ----------------------
3. Rent Concessions None None None
----------------------- ----------------------- ----------------------
4. Effective Rent $7.50 $7.50 - $9.00 $10.00 - $12.00
----------------------- ----------------------- ----------------------
5. TI Allowance None None None
----------------------- ----------------------- ----------------------
6. Expense Stop None None None
----------------------- ----------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop) 3 -5 years (shop)
----------------------- ----------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% to 7.00%
----------------------- ----------------------- ----------------------
9. Percentage Rent
(per lease terms) Food Lion, Revco Piggly Wiggly Piggly Wiggly
----------------------- ----------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
----------------------- ----------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A N/A
----------------------- ----------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) N/A similar superior
----------------------- ----------------------- ----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A N/A
---------------------- ----------------------
b. Shop Space $6.50 - $8.00 $10.00 - $11.00
---------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
---------------------- ----------------------
3. Rent Concessions None None
---------------------- ----------------------
4. Effective Rent $6.50 - $8.00 $7.00 - $11.00
---------------------- ----------------------
5. TI Allowance None None
---------------------- ----------------------
6. Expense Stop None None
---------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3-5 years (shop)
---------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% - 7.00%
---------------------- ----------------------
9. Percentage Rent
(per lease terms) Winn-Dixie, Revco Winn-Dixie
---------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
---------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
---------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) similar similar
---------------------- ----------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS:
Subject property is more similar to Comparable No. 1 and 3 because of age and
tenant structure. The reason for ranking Comparable No. 2 superior to subject is
because this center is new, being built in 1995 and the rental rates are higher
than the rental rates at subject property. Comparable No. 4 is similar.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Caroline Square Shopping Center
Location: NEC Platt Springs Road and Emanuel Church Road
West Columbia, South Carolina
Year Built: 1985
Total Size: 40,155 SF
Vacant Space: 0 SF
Vacancy Rate: 0%
Rental Range: $7.50 to $9.00
Tenant Expenses: Pass throughs for real estate taxes, hazard insurance and
CAM for some tenants, reimbursement of increases in expenses
over base year for others.
Remarks:
Piggly Wiggly is the anchor tenant. The lease with Rite-Aid expired and Dollar
General moved in within a couple of months. Other tenants include Trio's Salon,
Starlite Video, Golden Wok, Subsand Pizza, Coin Laundry, Alternate Tanning, and
Becknell Dry Cleaners.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Mills Corner Shopping Center
Location: NEC Augusta Road and Oak Drive
West Columbia, South Carolina
Year Built: 1995
Total Size: 42,845 SF
Vacant Space: 1,200 SF
Vacancy Rate: 2.8%
Rental Range: $10.00 to $12.00
Average Rent: $10.35
Tenant Expenses: Pass throughs for real estate taxes, hazard insurance and
CAM.
Remarks:
This is a strip center that was completed in 1995. McDonalds and Moovies occupy
outlots. One small space is vacant, and this center is still in lease-up. A
NationsBank kiosk is located on site. Anchor tenant is Piggly Wiggly, and locals
include Subway, Cost Cutters, Burnette's Cleaners, and ABC store, The Grove
Bistro, and Imperial China Restaurant.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Woodberry Plaza
Location: NEC Augusta Road and Woodberry Drive
West Columbia, South Carolina
Year Built: 1974
Total Size: 85,145 SF
Vacant Space: 0 SF
Vacancy Rate: 0%
Rental Range: $6.50 to $9.25
Average Rent: $7.75
Tenant Expenses: Pass throughs for real estate taxes, hazard insurance and
CAM.
Remarks:
This is a strip center with Winn Dixie and Revco as anchor tenants. A new Winn
Dixie was recently completed, and the old Winn Dixie space is currently leased
to Big Lots.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Red Bank Crossing Shopping Center
Location: NWC South Lake Drive and Two Notch Road
Lexington, SC
Year Built: 1990
Total Size: 65,936 SF
Vacant Space: 1,200 SF
Vacancy Rate: 1.82%
Local Rent Range: $7.00 - $11.00 SF
Average Rent: $9.88/SF
Tenant Expenses: CAM, taxes & insurance.
Remarks:
Center is anchored by Winn-Dixie (46,358SF) and Revco (8,450SF). Other tenants
include Subway, All Star Rental, Dry Cleaners, ABC Store, Chinese Restaurant,
and Hair Salon.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Three Fountains St. Andrews Crossing Eastgate Shop. Center
----------------------- ----------------------- -----------------------
b. Street Address 3979 Platt Springs Rd. 817 St. Andrews Road NWC Whiskey Rd. &
Eastgate Dr.
----------------------- ----------------------- -----------------------
c. City West Columbia, SC Columbia, SC Aiken, SC
----------------------- ----------------------- -----------------------
d. Distance from Subject N/A 8 miles 56 miles
----------------------- ----------------------- -----------------------
2. Attributes
a. Year Built 1986 1994 1995
----------------------- ----------------------- -----------------------
b. Net sq. feet 41,450 66,910 SF 75,716 SF
----------------------- ----------------------- -----------------------
c. # Buildings 1 1 1
----------------------- ----------------------- -----------------------
d. # of Stories 1 1 1
----------------------- ----------------------- -----------------------
e. Vacancy % 4.83% 0% 5.00%
----------------------- ----------------------- -----------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000
----------------------- ----------------------- -----------------------
b. Sales Price PSF N/A $97.89 $88.16
----------------------- ----------------------- -----------------------
c. Cap. Rate N/A 9.69% 9.86%
----------------------- ----------------------- -----------------------
d. Date N/A 05-25-94 09-28-95
----------------------- ----------------------- -----------------------
e. NOI at time of Sale N/A $634,797 $657,896
----------------------- ----------------------- -----------------------
4. Rank Relative to Subject
(inferior, similar, superior) N/A superior similar
----------------------- ----------------------- -----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name One Norman Center Paw Creek Commons
-------------------- ------------------------
b. Street Address 19706 One Norman E/S Little Rock Rd. at
Blvd. Freedom Dr.
-------------------- ------------------------
c. City Cornelius, NC Charlotte, NC
-------------------- ------------------------
d. Distance from Subject 100 miles 92 miles
-------------------- ------------------------
2. Attributes
a. Year Built 1993 1996
-------------------- ------------------------
b. Net sq. feet 54,185 SF 66,050
-------------------- ------------------------
c. # Buildings 1 1
-------------------- ------------------------
d. # of Stories 1 1
-------------------- ------------------------
e. Vacancy % 0% 2.73%
-------------------- ------------------------
3. Sales Information
a. Sales Price $4,650,000 $5,384,000
-------------------- ------------------------
b. Sales Price PSF $85.82 $77.52
-------------------- ------------------------
c. Cap. Rate 9.68% 9.61%
-------------------- ------------------------
d. Date 10-12-95 03-25-97
-------------------- ------------------------
e. NOI at time of Sale $450,188 $517,412
-------------------- ------------------------
4. Rank Relative to Subject
(inferior, similar, superior) similar superior
-------------------- ------------------------
</TABLE>
Explain Ranking/Comments:
Comparables 1 and 3 are ranked superior to subject. The reason for this is
because of the location of these comparables being superior to subject.
Comparable No. 3 is located in a commercial area that is larger than subject,
but it is similar.
9
<PAGE>
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS: 6012-1-1
Name: St. Andrews Crossing
Location: 817 St. Andrews Road, Columbia, SC
Grantor: Hayley-Redd, L.P.
Grantee: F.A.C. Properties
Deed Reference: Book 1199, Page 331
Date: May 25, 1994
Sales Price: $6,550,000
Adjusted Sales Price: $6,550,000
Size building 66,910
Sales Price per S.F.: $97.89
Size Land (Acres): 8.08
Size Land (S.F.): 351,965
Year Built: 1994
Land/Building Ratio: 5.26 to 1
Utilities: All Available
Zoning: Commercial
Financing: At Market
Effective Gross Income: $686,905
EGIM: 9.54
Net Operating Income: $634,797
Overall Rate: 9.69%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is an arms length sale of a neighborhood shopping center anchored by Kroger
in a good commercial area with good accessibility and fair exposure.
Construction is brick veneer/concrete block.
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
TMS:
Name: Eastgate Shopping Center
Location: Northwest Corner of Whiskey Road & Eastgate Drive
Aiken, SC
Grantor: Southwest U.S. Retail, LP
Grantee: PDG Aiken Partners, LP
Deed Reference: N/A
Date: September 28, 1995
Sales Price: $6,675,000
Adjusted Sales Price: $6,675,000
Size building: 75,716
Sales Price per S.F.: $88.16
Size Land (Acres): 8.79
Size Land (S.F.): 382,892
Year Built: 1995
Land/Building Ratio: 5.06 to 1
Utilities: All Available
Zoning: Commercial
Financing: Cash to Seller
Gross Potential Income: $782,704
Effective Gross Income: $782,704
EGIM: 8.53
Net Operating Income: $657,896
Overall Rate: 9.86%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
Part of a portfolio of Publix anchored shopping centers being purchased in the
Southeast. This center is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7 percent). Most of the local
tenants are on 5 year leases, with rental rates generally ranging from $8.00 to
$13.00 per square foot. This is a neighborhood shopping center with stucco and
brick exterior that was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95 percent.
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
Name: One Norman Center
Location: 19706 One Norman Boulevard
Cornelius, Mecklenburg County, NC
Grantor: One Norman Center, LP
Grantee: Lucky Realty
Deed Reference: Book 8325, Page 721
Date: October 12, 1995
Sales Price: $4,650,000
Adjusted Sales Price: $4,650,000
Size building: 54,185
Sales Price per S.F.: $85.82
Size Land (Acres): 5.69
Size Land (S.F.): 247,856
Year Built: 1993
Land/Building Ratio: 4.57 to 1
Utilities: All Public
Zoning: CUB-2
Financing: Cash to Seller
Gross Potential Income: $474,591 - $8.76/SF
Effective Gross Income: $474,591 - $8.76/SF
Gross Income Multiple: 9.80
EGIM: 9.80
Net Operating Income: $450,188 - $8.31/SF
Overall Rate: 9.68%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a neighborhood center with Bi-Lo as the major tenant (42,680 SF). Locals
include Blockbuster Video, El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot; local shops range from
$10.50 to $13.00 per square foot on a triple net basis.
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS: 59-231-22,23 pt.
Name: Paw Creek Commons
Location: East side of Little Rock Road at Freedom Drive
Grantor: Paw Creek, LLC
Grantee: Paw Creek Crossing Limited Partnership
Deed Reference: Book 8988, Page 519
Date: March 25, 1997
Sales Price: $5,120,000
Adjusted Sales Price: $5,384,000
Size building: 66,050
Sales Price per S.F.: $77.52
Size Land (Acres): 9.82
Size Land (S.F.): 427,759
Year Built: 1996
Land/Building Ratio: 6.48 to 1
Utilities: Municipal
Zoning: CC, Commercial Center
Financing: Cash to Seller
Gross Potential Income: $568,840
Effective Gross Income: $552,054
Gross Income Multiple: 9.00
EGIM: 9.27
Net Operating Income: $517,412
Overall Rate: 9.61%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
The contract for subject was pre-construction. The sales price has been adjusted
to reflect this by using 50 basis points in the capitalization rate (.1011 minus
.0050 equals .0961). The major tenants are Winn-Dixie and Revco. Blockbuster
occupies a store containing 5,500 square feet at $11.20 per square foot. Rents
on shops range from $13.00 to $14.00 per square foot. The income from anchor
tenants is 79.41 percent of gross income.
13
<PAGE>
ADDENDA
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
Comparable Rentals
------------------
[GRAPHIC OMITTED]
<PAGE>
Improved Sales Map
------------------
[GRAPHIC OMITTED]
<PAGE>
Site Plan
---------
[GRAPHIC OMITTED]
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 56
Property: THREE FOUNTAINS PLAZA
3979 PLATT SPRINGS ROAD
WEST COLUMBIA, SC 29169
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #343
FOOD LION #343 625-30 29,900 12/08/85 10/02/16 0.00 0.00
4.66 01/01/86 135,000.00
5.70 02/10/96 165,368.04
0.00 0.00
0.00 0.00
7.88 11/01/96 228,533.04
- ------------------------------------------------------------------------------------------------------------------------
REVCO #4338
REVCO DISCOUNT DRUG CENTERS, I 625-40 8,450 02/01/86 01/31/01 0.00 0.00
6.50 02/01/86 54,925.08
0.00 0.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
Available
625-50 2,000 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
DOMINO'S/HO PIZZA
EDWARD SADIK HATIPOGLU 625-60 2,000 11/29/95 11/30/00 0.00 0.00
0.00 0.00
0.00 0.00
7.00 11/01/95 14,000.04
- ------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 39,450 Current Annual Base Rent 297,458.16
Available. 2,000
Total..... 41,450
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION #343
FOOD LION #343 PRS 1986 PRS 1995 Fixed 0 10/03/16 10/02/21 0.00 1.00 0 Y
10/03/21 10/02/26 0.00 0.01 228,533 Y
10/03/26 10/02/31 0.00 0.01 1653680400 Y
10/03/31 10/02/36 0.00 0.01 0 Y
0.00 0.01 0 Y
0.00 0.01 2285330400 Y
- ------------------------------------------------------------------------------------------------------------------------------------
REVCO #4338
REVCO DISCOUNT DRUG CENTERS, I
PRS 1987 PRS 1986 Fixed 0 02/01/01 01/31/06 0.00 2.00 0 Y
02/01/06 01/31/11 0.00 2.00 2,746,300 Y
02/01/11 01/31/16 0.00 2.00 0 Y
02/01/16 01/31/21 0.00 2.00 0 Y
02/01/21 01/31/26 0.00 2.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
DOMINO'S/HO PIZZA
EDWARD SADIK HATIPOGLU Full 0 Full 0 Full 0 12/01/00 11/30/05 7.00 0.00 0
12/01/05 11/30/10 7.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Platt Springs Road - Looking North
[GRAPHIC OMITTED]
Platt Springs Road - Looking South
<PAGE>
[GRAPHIC OMITTED]
Emanuel Church Road - Looking East
[GRAPHIC OMITTED]
Emanuel Church Road - Looking West
<PAGE>
[GRAPHIC OMITTED]
Subject - Front View
[GRAPHIC OMITTED]
Subject - Front View
<PAGE>
[GRAPHIC OMITTED]
Subject - Rear View
[GRAPHIC OMITTED]
Subject - Front View
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study
BARNWELL PLAZA
1019 Dunbarton Boulevard
Barnwell, Barnwell County, South Carolina
Prepared by
O. Marshall Dodds, MAI
Date of Market Study - April 24, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
April 24, 1997
Mr. Steven R. Maeglin
Morgan Stanley & Co., Inc.
1585 Broadway
New York, New York 10036
Re: Market Study
Barnwell Plaza
1019 Dunbarton Boulevard
Barnwell, Barnwell County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that formed the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April2 4, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
subject property consists of a neighborhood shopping center that contains 70,725
square feet of leasable area. The center was constructed in 1985. The major
tenants are Wal-Mart Stores, Food Lion, and Revco. The subject property is
currently 100.0%. However, there is a new Superstore that is under construction
and nearing completion that will be occupied by Wal-Mart. At that time, Wal-Mart
will vacate the premises. It is thought that the owners of subject property will
be able to secure tenants for the Wal-Mart Store. In any event, Wal-Mart will
continue paying rent until May 10th, 2005.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Barnwell and Barnwell County are located in the southwestern section of the
state of South Carolina. The population in the city of Barnwell in 1990 was
5,108 which decreased by 8.3% from 5,572 in 1980. The county population was
19,868 in 1980 and decreased to 19,743 in 1990. The projected population for the
county in the year 2000 is 24,100. The population within a 15-mile radius of
Barnwell is 31,729 while a population within a 30-mile radius is 116,780.
The major employers in the area are Westinghouse Savannah River Plant, Milliken
and Co., Burlington Industrial Carpet Division, Shuron, Inc., Chem-Nuclear
Systems, Inc. and Carolina Metals, Inc. The predominant development in the
Barnwell county area is the Department of Energy's Savannah River site. However,
this facility has been up and down in the past and while helping with
employment, in bad times the unemployment rates have been somewhat high.
Chem-Nuclear Systems, Inc. is also important with the Nuclear Waste Storage
Facility in Barnwell county.
The unemployment rate for Barnwell County as of March, 1997 was 9 percent while
the statewide rate was 5.3 percent.
Neighborhood and Site
The subject neighborhood is located in the western section of the city of
Barnwell. The downtown area of Barnwell is located approximately 1/2 mile to the
east at the intersection of Dunbarton Boulevard and Main Street. The major
developments in subject neighborhood would be the Barnwell Plaza with tenants
being Wal-Mart, Food Lion, Revco, Cato's and Pic'N Pay. The Tri-County Shopping
Center is located on Dunbarton Boulevard. across from the Barnwell Plaza. The
major tenants are Reid's Red and White Supermarket, Rite-Aid Drug Store, Top
Value Stamp Redemption Store, Dollar Store with outlots being occupied by
McDonald's and Nations Bank. Retail and service type facilities are located
along Dunbarton Boulevard and these would include Advance Auto Parts, Master
Lube, Huddle House, China Express, Video House, Boney Motor Co., Hardee's, KCF,
Goodyear, Exxon, Goodyear, BP Convenient Markets/Self-Service Gasoline Store,
First Citizen's Bank & Trust Co. The Carolina Lodge is located across the street
from Barnwell Plaza. The Adams-Millis Plant, which is a division of Sara Lee
Corporation is located on Dunbarton Boulevard in subject neighborhood. The plant
employs approximately 525 people and is a manufacture of white socks. The
Atlantic Coastline Railroad runs through the southern portion of the
neighborhood in a east-west direction. The Carter Shopping Center is located on
Burr Street on the Town Circle. The major tenant in this center is Heilig-Meyers
Furniture Co. There is a Piggly Wiggly Store and Farmer's Furniture Store
located in the eastern section of Barnwell along Marlboro Avenue.
The new Wal-Mart Superstore with eight shops is nearing completion and is
located on Dunbarton Boulevard just west of subject. The Wal-Mart Store in
subject property will be vacated upon completion of the Wal-Mart Superstore.
Physical features are as follows:
1. Size 11.273 acres or 491,052 SF
2. Identity 1019 Dunbarton Boulevard
TMS# 072-06-04-011, 020
3. Shape Irregular
4. Topography Generally level and on street grade
5. Accessability Good
6. Utilities Municipal
1
<PAGE>
Physical Description
Building features are as follows:
1. Size (net) 70,725 SF
2. Layout & Design One story - discount store - food store - drug
store- two shops
3. Parking Spaces 361
5.11 per 1,000 square feet of net area
4. Construction Brick and glass front with concrete block on side
and rear and metal seam roof.
Market Position and Marketability Conclusions
The shopping district in Barnwell is more or less along Dunbarton Boulevard and
in subject neighborhood. Barnwell Plaza, which is subject property, was the
predominant shopping center in the neighborhood for the past twelve years. The
Wal-Mart SuperStore and shops are nearing completion at this time. This will be
the new prominent shopping facility in the area. A Tri-County Shopping Center is
located across the street from Barnwell Plaza. Carter Shopping Center is located
approximately two blocks east in the downtown area. There is another shopping
center that is located on the eastern side of the city with Piggly Wiggly and
Farmer's Furniture Stores. The occupancy rates are considered to be high at this
time. Subject property has experienced a high occupancy rate over the past few
years. However, when Wal-Mart moves out of the existing store and into the new
SuperStore, a large portion of subject will be vacant. There is a demand for
former Wal-Mart Stores with other tenants and generally it is divided into
smaller spaces. The location of subject property will attract potential users.
Also there is a period of years that Wal-Mart will be paying rent on subject
property. The rental rate for the Wal-Mart store will be somewhat less than the
rental rate for the new SuperStore.
The rental rates for the shops in subject property are at $6.50 - $7.00 per
square foot. Comparable No. 1 has rental rates ranging from $2.50 to $6.00 per
square foot. Comparable No. 2 has rental rates from $3.25 to $5.00 per square
foot. Comparable No. 3 has rental rates ranging from $10.00 to $11.00 per square
foot, but this is the new center with the Wal-Mart SuperStore.
Subject property rental rates are above the rental rates of the existing
shopping centers and are lower than the rental rates at the new Wal-Mart
SuperStore Center. It is thought that these rental rates can be maintained in
the future. If the existing Wal-Mart Store is placed on the market, the rental
rate of at least $3.40 per square foot should be achieved.
Trends:
The subject property is located in the shopping area of Barnwell and Barnwell
County. There are shopping centers and retail stores that are located along
Dunbarton Boulevard. The stability of the neighborhood has been maintained in
years past and it is thought that it will be maintained in years to come. There
will be some growth, but there are no spurts of growth seen in the future. The
unemployment rate has been in the range that it is at this time over years past
and this probably will not change.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1
------- ------------
<S> <C> <C>
1. Identification
a. Name Barnwell Plaza Tri-County Shopping Center
----------------------- ----------------------------
b. Street 1019 Dunbarton Blvd. 1016 Dunbarton Blvd.
----------------------- ----------------------------
c. City Barnwell, SC Barnwell, SC
----------------------- ----------------------------
d. Distance from subject N/A Across street
----------------------- ----------------------------
e. Contact Edens & Avant, Inc. The Williams Co.
----------------------- ----------------------------
f. Phone 803-779-4420 803-873-7610
----------------------- ----------------------------
2. Attributes
a. Year built 1985 1972
----------------------- ----------------------------
b. Net sq. Ft. 70,725 36,800
----------------------- ----------------------------
c. # building 1 1
----------------------- ----------------------------
d. #stories 1 1
----------------------- ----------------------------
e. Avg. Floor plate size (SF),
if office N/A N/A
----------------------- ----------------------------
f. # elevators N/A N/A
----------------------- ----------------------------
g. Parking Adequate Adequate
----------------------- ----------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
----------------------- ----------------------------
I. Vacancy % 0% 6.52%
----------------------- ----------------------------
j. Anchors, if Retail Wal-Mart, Food Lion, Reid's Red & White, Dollar
Revco General, Rite-Aid
----------------------- ----------------------------
<CAPTION>
COMPARABLE 2 COMPARABLE 3
------------ ------------
<S> <C> <C>
1. Identification
a. Name Carter Shopping Center Wal-Mart Superstore
--------------------------- ---------------------------
b. Street Burr Street SWC Dunbarton Blvd.
--------------------------- ---------------------------
c. City Barnwell, SC Barnwell, SC
--------------------------- ---------------------------
d. Distance from subject 2 blocks 2 blocks
--------------------------- ---------------------------
e. Contact Carter Realty Co. Wyatt Development Co.
--------------------------- ---------------------------
f. Phone 803-259-3253 803-649-3975
--------------------------- ---------------------------
2. Attributes
a. Year built 1968 1997
--------------------------- ---------------------------
b. Net sq. Ft. 35,000 127,500
--------------------------- ---------------------------
c. # building 1 1
--------------------------- ---------------------------
d. # stories 1 1
--------------------------- ---------------------------
e. Avg. Floor plate size (SF),
if office N/A N/A
--------------------------- ---------------------------
f. # elevators N/A N/A
--------------------------- ---------------------------
g. Parking Adequate Adequate
--------------------------- ---------------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
--------------------------- ---------------------------
I. Vacancy % 12.4% 4.08%
--------------------------- ---------------------------
j. Anchors, if Retail Heilig-Meyers, Mack's
Variety Wal-Mart, Cato's
--------------------------- ---------------------------
</TABLE>
Comments:
Comparable No. 1 is located across the street from subject property and is an
older center. Comparable No. 2 is located near subject, but is approximately one
block off of the town square. This center was built in 1968 and has
Heilig-Meyers as the major tenant. The Wal-Mart Superstore is nearing completion
and is located appoximately two blocks west of subject. Wal-mart will vacate the
store in subject property. The developer should be able to lease the Wal-Mart
space within a reasonable time. The rental rates for subject are higher than
Comparable No. 1 and 2, but are lower than Comparable No. 3.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1
------- ------------
<S> <C> <C>
1. Asking Rental Rate
a. Anchor Space $3.40 - $7.25 N/A
----------------------- ----------------------
b. Shop Space $6.50 - $7.00 $2.50 - $6.00
----------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
----------------------- ----------------------
3. Rent Concessions None None
----------------------- ----------------------
4. Effective Rent $6.50 - $7.00 $2.50 - $6.00
----------------------- ----------------------
5. TI Allowance None None
----------------------- ----------------------
6. Expense Stop None None
----------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 -5 years (shop)
----------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
----------------------- ----------------------
9. Percentage Rent
(per lease terms)
All Tenants Reid's, Rite-Aid
----------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
----------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
----------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) N/A similar
----------------------- ----------------------
<CAPTION>
COMPARABLE 2 COMPARABLE 3
------------ ------------
<S> <C> <C>
1. Asking Rental Rate
a. Anchor Space N/A $4.81 - $9.00
---------------------- ----------------------
b. Shop Space $3.25 - $5.00 $10.00 - $11.00
---------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
---------------------- ----------------------
3. Rent Concessions None None
---------------------- ----------------------
4. Effective Rent $3.25 - $5.00 $10.00 - $11.00
---------------------- ----------------------
5. TI Allowance None None
---------------------- ----------------------
6. Expense Stop None None
---------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3-5 years (shop)
---------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% - 7.00%
---------------------- ----------------------
9. Percentage Rent
(per lease terms)
None None
---------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
---------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
---------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) similar superior
---------------------- ----------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS:
Comparables No. 1 and 2 have been rated as similar to subject. The reason for
this is because of these properties being in a general range. Subject property
is newer than these two comparables and has high rental rates. The Wal-Mart
Store will be vacating subject premises upon completion of the Wal-Mart
SuperStore. Comparable No. 3 is a Wal-Mart SuperStore and shops and this center
has been rated as superior to subject. While this center is in subject
neighborhood and on Dunbarton Boulevard, it is thought that it should be rated
superior as it is new and the income stream is stronger than that of subject.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Tri-County Shopping Center
Location: 1016 Dunbarton Boulevard
Barnwell, SC
Year Built: 1972
Total Size: 36,800 SF
Vacant Space: 2,400SF
Vacancy Rate: 6.52%
Rental Range: $2.50 - $6.00 per square foot
Tenant Expenses: Triple Net
Remarks:
This is an older center. Major tenants are Reid's Red & White Food Store,
Rite-Aid Pharmacy, Radio Shack, One-Price Clothing, Computer Solutions of
Barnwell.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Carter Shopping Center
Location: Burr Street
Barnwell, SC
Year Built: 1968
Total Size: 35,000 SF
Vacant Space: 4,340 SF
Vacancy Rate: 12.4%
Rental Range: $3.25 - $5.00 per square foot
Tenant Expenses: Triple Net
Remarks:
This is an older center. Major tenants are Heilig-Meyers Furniture Company. It
is located just one block from the Town Square.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Wal-Mart Superstore Center
Location: SWC Dunbarton Boulevard & Litchfield Street
Barnwell, SC
Year Built: 1997
Total Size: 127,500 SF
Vacant Space: 5,200 SF
Vacancy Rate: 4.08%
Rental Range: $10.00 - $11.00 per square foot
Tenant Expenses: Triple Net
Remarks:
This is a new center with a Wal-Mart Superstore. The pre-leasing of shops has
been good. Tenants include Cato's, Dollar Tree, Friedman's Jewelers.
7
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Barnwell Plaza Triangle Village Hampton Plaza
----------------------- ------------------------- -----------------------
b. Street Address 2864 Wilma Rudolph
1019 Dunbarton Blvd. 912-934 N. Lake Dr. Blvd.
----------------------- ------------------------- -----------------------
c. City Barnwell, SC Lexington, SC Clarksville, TN
----------------------- ------------------------- -----------------------
d. Distance from Subject N/A 60 miles 510 miles
----------------------- ------------------------- -----------------------
2. Attributes
a. Year Built 1985 1986 1988
----------------------- ------------------------- -----------------------
b. Net sq. feet 70,725 SF 115,754 SF 189,302 SF
----------------------- ------------------------- -----------------------
c. # Buildings 1 1 1
----------------------- ------------------------- -----------------------
d. # of Stories 1 1 1
----------------------- ------------------------- -----------------------
e. Vacancy % 9.00% 3.24% 0%
----------------------- ------------------------- -----------------------
3. Sales Information
a. Sales Price N/A $4,489,380 $6,150,000
----------------------- ------------------------- -----------------------
b. Sales Price PSF N/A $38.78 $32.49
----------------------- ------------------------- -----------------------
c. Date N/A 01-31-95 12-26-95
----------------------- ------------------------- -----------------------
d. NOI at time of Sale N/A $480,919 $723,627
----------------------- ------------------------- -----------------------
e. Cap. Rate N/A 10.71% 12.25%
----------------------- ------------------------- -----------------------
4. Rank Relative to Subject
(inferior, similar, superior) N/A superior similar
----------------------- ------------------------- -----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Cunningham Plaza Cumberland Plaza
---------------------- ---------------------
b. Street Address 1610 Fort Campbell 209 New Smithville
Blvd. Hwy.
---------------------- ---------------------
c. City Clarksville, TN McMinnville, TN
---------------------- ---------------------
d. Distance from Subject 510 miles 400 miles
---------------------- ---------------------
2. Attributes
a. Year Built 1987 1987
---------------------- ---------------------
b. Net sq. feet 140,744 SF 143,951 SF
---------------------- ---------------------
c. # Buildings 1 1
---------------------- ---------------------
d. # of Stories 1 1
---------------------- ---------------------
e. Vacancy % 11.23% 8.92%
---------------------- ---------------------
3. Sales Information
a. Sales Price $5,025,000 $5,225,050
---------------------- ---------------------
b. Sales Price PSF $35.70 $36.30
---------------------- ---------------------
c. Date 12-26-95 12-26-95
---------------------- ---------------------
d. NOI at time of Sale $667,043 $693,726
---------------------- ---------------------
e. Cap. Rate 13.27% 13.28%
---------------------- ---------------------
4. Rank Relative to Subject
(inferior, similar, superior) similar similar
---------------------- ---------------------
</TABLE>
Explain Ranking/Comments:
These shopping centers are similar to subject. The centers were built about the
same time as subject property, but the size of the centers variesas to the size
of subject. These comparables were anchored with Wal-Mart stores such as subject
and the rental rates for the Wal-Mart stores were about the same as subject. The
location of subject is considered similar to the locations of these comparables.
However, comparable No. 1 is located in a growth area and is thought to be
superior.
8
<PAGE>
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS:
Name: Lexington Triangle Village
Location: U.S. 378 & North Lake Drive (SC#6)
Lexington, SC
Grantor: 1994 N1 SC Associates
Grantee: Tri Centers, LP
Deed Reference: Book 3260, Page 199
Date: January 31, 1995
Sales Price: $4,489,380
Adjusted Sales Price: $4,489,380
Size building 115,754
Sales Price per S.F.: $38.78
Size Land (Acres): 12.51
Size Land (S.F.): 544,936
Year Built: 1985
Land/Building Ratio: 4.71 to 1
Utilities: All Available
Zoning: Commercial
Financing: Cash to Seller
Gross Potential Income: $607,469
Effective Gross Income: $607,469
Gross Income Multiple: 7.39
EGIM: 7.39
Net Operating Income: $480,919
Overall Rate: 10.71%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This center is anchored by Wal-Mart (65,904 SF) and Food Lion (25,000 SF) and
there are 7 local shops totaling 24,850 SF (21.5 percent). At the time of sale,
the center was 98.7 percent occupied with only 2,000 SF vacant. Wal-Mart has a
base rent of $3.55 and the lease expires 11/05. Currently, Wal-Mart is paying
about $0.50 per SF overage rent and Wal-Mart is expected to leave the center in
the near future as no expansion room is available. The estimated cap rate
excludes potential overage rent form Wal-Mart and only excludes income from the
2,000 SF vacant bay. Projected expenses include $0.10 per SF reserves. The
center is masonry with brick front and metal mansard canopy roof and in average
condition. No outparcels were included with this sale.
9
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
TMS:
Name: Hampton Plaza
Location: 2864 Wilma Rudolph Boulevard
Clarksville, TN
Grantor: Aetna Life Insurance Company
Grantee: Hampton II, LP
Deed Reference: Book 580, Page 1793
Date: December 26, 1995
Sales Price: $6,150,000
Adjusted Sales Price: $6,150,000
Size building: 189,302
Sales Price per S.F.: $32.49
Size Land (Acres): 23.24
Size Land (S.F.): 1,012,334
Year Built: 1988
Land/Building Ratio: 5.35 to 1
Utilities: All Available
Zoning: C-3, Shopping Center District
Financing: Cash to Seller
Gross Potential Income: $966,102
Effective Gross Income: $937,119
Gross Income Multiple: 6.37
EGIM: 6.56
Net Operating Income: $753,627
Overall Rate: 12.25%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a community shopping center with Wal-Mart as a major tenant prior to a
new Wal-Mart Superstore being built on the same block. While Wal-Mart remains
liable for the lease, the store is vacant. The remainder of the center is
occupied.
10
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Cunningham Plaza
Location: 1610 Fort Campbell Boulevard
Clarksville, TN
Grantor: Aetna Life Insurance Company
Grantee: Cunningham II, LP
Deed Reference: Book 580, Page 1748
Date: December 26, 1995
Sales Price: $5,025,000
Adjusted Sales Price: $5,025,000
Size building: 140,744
Sales Price per S.F.: $35.70
Size Land (Acres): 23.13
Size Land (S.F.): 1,007,543
Year Built: 1987
Land/Building Ratio: 7.16 to 1
Utilities: All Available
Zoning: C-5, Arterial Commercial District
Financing: Cash to Seller
Gross Potential Income: $841,808
Effective Gross Income: $816,554
Gross Income Multiple: 5.97
EGIM: 6.15
Net Operating Income: $667,043
Overall Rate: 13.27%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a community shopping center. Wal-Mart was the major tenant, but is now
occupying a new superstore in the same block. Wal-Mart Furniture store is
occupying the store. Other shops are occupied.
11
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS:
Name: Cumberland Plaza
Location: 209 New Smithville Highway
McMinnville, TN
Grantor: Aetna Life Insurance
Grantee: Cumberland II, LP
Deed Reference: Book 287, Page 204
Date: December 26, 1995
Sales Price: $5,225,050
Adjusted Sales Price: $5,225,050
Size building: 143,951
Sales Price per S.F.: $36.30
Size Land (Acres): 19.64
Size Land (S.F.): 855,518
Year Built: 1988
Land/Building Ratio: 5.94 to 1
Utilities: All Available
Zoning: C-3, Highway Commercial District
Financing: Cash to Seller
Gross Potential Income: $902,918
Effective Gross Income: $875,830
Gross Income Multiple: 5.79
EGIM: 5.97
Net Operating Income: $693,726
Overall Rate: 13.28%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a community shopping center. Wal-Mart was the major tenant and remains
liable for the lease for the remaining term. A new Wal-Mart Superstore was built
one block west of this property.
12
<PAGE>
ADDENDA
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
13
<PAGE>
COMPARABLE RENTALS MAP
[GRAPHIC OMITTED]
<PAGE>
COMPARABLE SALES MAP
[GRAPHIC OMITTED]
<PAGE>
Building Sketch
---------------
[GRAPHIC OMITTED]
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 158
Property: BARNWELL PLAZA
1019 DUNBARTON BOULEVARD
BARNWELL, SC
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION INC. #293
FOOD LION INC. 694-10 21,000 04/28/85 04/27/05 5.40 05/10/85 113,400.00
0.00 0.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
REVCO #4508
REVCO DISCOUNT DRUG CENTERS O 694-20 8,450 05/01/85 04/30/00 7.25 05/01/85 61,262.52
7.50 05/01/92 63,375.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
CATO CORPORATION #601
THE CATO CORPORATION 694-30 3,600 02/01/85 01/31/00 5.50 02/01/85 19,800.00
6.50 02/01/90 23,400.00
7.00 02/01/95 25,200.00
- ------------------------------------------------------------------------------------------------------------------------
PIC 'N PAY STORES, INC. #144
PIC 'N PAY SHOES 694-40 2,800 08/01/85 07/31/00 6.00 08/01/85 16,800.00
6.25 08/01/90 17,499.96
6.50 08/01/95 18,200.04
6.50 10/01/95 18,199.92
- ------------------------------------------------------------------------------------------------------------------------
WAL-MART #795
WAL-MART STORES INC. 694-50 34,875 05/11/85 05/10/05 3.40 05/11/85 118,575.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOOD LION INC. #293
FOOD LION INC. Full 0 Full 0 Full 0 04/28/05 04/27/10 5.40 1.00 11,340,000 Y
04/28/10 04/27/15 5.40 1.00 0 Y
04/28/15 04/27/20 5.40 1.00 0 Y
04/28/20 04/27/25 5.40 1.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
REVCO #4508
REVCO DISCOUNT DRUG CENTERS O Full 0 Full 0 Full 0 05/01/00 04/30/05 8.00 2.00 3,063,100 Y
05/01/05 04/30/10 8.50 2.00 3,168,800 Y
05/01/10 04/30/15 9.00 2.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
CATO CORPORATION #601
THE CATO CORPORATION Full 0 Full 0 Full 0 02/01/95 01/31/00 7.00 5.00 495,000
0.00 5.00 585,000
0.00 5.00 630,000
- ------------------------------------------------------------------------------------------------------------------------------------
PIC 'N PAY STORES, INC. #144
PIC 'N PAY SHOES Full 0 Full 0 Full 0 08/01/90 07/31/95 6.25 4.00 420,000
08/01/95 07/31/00 6.50 4.00 437,500
0.00 4.00 455,000
0.00 4.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
WAL-MART #795
WAL-MART STORES INC. Full 0 None 0 Full 0 05/11/05 05/10/10 3.40 0.75 8,723,837
05/11/10 05/10/15 3.40 0.75 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97 Page 159
Property: BARNWELL PLAZA
1019 DUNBARTON BOULEVARD
BARNWELL, SC
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant
Renewal Options TYP Column: TBD - To be Determined CPI - Consumer Price
Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
WAL-MART #795
WAL-MART STORES INC. 694-50 34,875 05/11/85 05/10/05 0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 70,725 Current Annual Base Rent 338,749.92
Available. 0
Total..... 70,725
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WAL-MART #795
WAL-MART STORES INC. Full 0 None 0 Full 0 05/11/15 05/10/20 3.40 0.75 0
05/11/20 05/10/25 3.40 0.75 0
05/11/25 05/10/30 3.40 0.75 0
05/11/30 05/10/35 3.40 0.75 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Dunbarton Boulevard Looking East
[GRAPHIC OMITTED]
Dunbarton Boulevard Looking West
<PAGE>
[GRAPHIC OMITTED]
Subject Front View Looking From Dunbarton Boulevard
[GRAPHIC OMITTED]
Subject Front View Looking From Dunbarton Boulevard
<PAGE>
[GRAPHIC OMITTED]
Subject Front View Looking From Dunbarton Boulevard
[GRAPHIC OMITTED]
Subject Front View Looking From Inside Parking Lot
<PAGE>
[GRAPHIC OMITTED]
Subject Front View Looking From Inside Parking Lot
[GRAPHIC OMITTED]
Subject Front View Looking From Inside Parking Lot
<PAGE>
[GRAPHIC OMITTED]
Subject Rear and Side View
[GRAPHIC OMITTED]
Subject Rear View
<PAGE>
[GRAPHIC OMITTED]
Subject Rear View
[GRAPHIC OMITTED]
Subject Rear View
<PAGE>
[GRAPHIC OMITTED]
Subject Rear View
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study
CAPITOL SQUARE
431 Sunset Blvd.
West Columbia, Lexington County, South Carolina
Prepared by
O. Marshall Dodds, MAI
Date of Market Study - April 28, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
April 28, 1997
Mr. Steven R. Maeglin
Vice President
Morgan Stanley & Co., Inc.
1585 Broadway
New York, New York 10036
Re: Market Study
Capitol Square
431 Sunset Blvd.
West Columbia, Lexington County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that forms the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 28, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 79,921 square
feet of leasable area. The center was constructed in 1974 and Bi-Lo Store
expanded during 1993. The anchor tenants Bi-Lo and Revco and the subject
property is currently 74.9% occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Columbia is the state capital with the State House being located in downtown
Columbia. Also, the University of South Carolina Campus is located in the
downtown area. Fort Jackson, which is a large U.S. Army Training Facility is
located in the eastern section of the Metropolitan area. The city has numerous
specialized office activities such as: insurance, consulting services,
advertising, marketing, printing and financial services. Government,
distribution, finance and transportation are all important to Columbia, although
none are preeminent. Geography also gives Columbia a strategic location in the
industrial and commercial spheres.
The unemployment rate for Lexington County as of March, 1997 was 2.9 percent
while the statewide rate was 5.3 percent.
Neighborhood and Site
The neighborhood is located in the downtown area of West Columbia. The city of
Columbia is located across the Congaree River from subject property and West
Columbia. Meeting Street and Sunset Boulevard as well as State Street are major
traffic arteries that run through the neighborhood. Other commercial properties
are generally located along Meeting Street and Sunset boulevard. These
commercial type properties include retail and service facilities with several
fast food restaurants. Columbia Farms has a large poultry processing plant that
is located across the street from subject property . The Bridgepoint Condominium
Project is located on Sunset Boulevard at the intersection with Meeting Street.
Physical features are as follows:
1. Size 8.83 acres or 384,635 square feet
2. Identity 431 Sunset Boulevard
TMS #4659-05-003,012
3. Shape irregular
4. Topography slopes gently upward away from Sunset Boulevard
5. Accessability good
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 79,921 square feet
2. Layout & Design one-story/food store/drug store, 14 shops
3. Parking Spaces 411
5.4 per 1,000 square feet of net area
4. Construction brick and glass front with concrete block on side
and rear and metal seam roof
1
<PAGE>
Market Position and Marketability Conclusions
Cayce-West Columbia is the fourth largest submarket and contains 23 of 158
centers surveyed. The retail space located in this area consists of 1,481,760
square feet or 11.2% of the completed retail space surveyed. A new center
increases this area by 50,000 square feet, a change in size added another 4,538
square feet and one center was deleted for a total 13,500 square feet. The
vacant space reported was 144,317 square feet or 9.7%, the seventh highest of
the ten areas. Twelve months earlier the vacancy rate was 10.1% or .4 points
higher. The average new lease rate for these structures is $7.88 per square
foot. This figure is up by $.01 per square foot over past year and up by $ .23
per square foot from two years ago. There is a planned center on Sunset
Boulevard that will contain approximately 25,000 square feet.
The subject property is located in the downtown area of West Columbia which is
on the edge of the neighborhood. However, the area is built up with single
family residential properties and commercial properties. The downtown area of
Columbia is located across the river from subject property and subject
neighborhood. Westland Square is located to the northwest of this property and
the rental rates in Westland Square range from $7.00 to $9.50 per square foot.
The rental rates in Mills Corner which is located at the other edge of subject
neighborhood range from $10.00 to $12.00 per square foot. The Woodberry Plaza is
an older center that has been expanded and renovated. Winn-Dixie and Revco are
the major tenants and the rental rate for the shops is from $6.50 to $9.25 per
square foot. Sunset Court Shopping Center is located to the northwest on Sunset
Boulevard with Eckerds being the major tenant and the rents ranging from $6.00
to $8.00 per square foot.
The subject property has 14 shops and the rental rates range from $4.50 to $7.67
per square foot for the shops. There are two out lots that are being rented to
Columbia Farms and Savannah's. At this time there are several shops that are
vacant with the total space available containing 20,050 square feet. There is a
store, that contains 11,500 square feet, vacant at this time. Another store has
about 4,000 square feet that is available. The occupancy rate for this center
has operated at a high level in the past.
The rental rate for the Bi Lo Store is at $3.65 per square foot while the rental
rate at the Revco Store is at $4.50 per square foot. However, overages are being
paid at the Revco Store.
Trends:
The subject property is located in the downtown area of West Columbia. This is
an older neighborhood and there has been some growth that has occurred as
several older buildings have been renovated and restaurants have moved into the
neighborhood. The Bridgepoint Condominium Project is a high-rise condominium
building that is located on Sunset Boulevard at Meeting Street. The downtown
area of Columbia is located across the river from Sunset Boulevard.
The neighborhood is considered to be stable and it is thought that this
stability will be maintained in the future.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Capitol Square Sunset Court Mills Corner
----------------------- ----------------------- ----------------------
b. Street NEC Augusta Rd. &
431 Sunset Blvd. 2247 Sunset Blvd. Oak Dr.
----------------------- ----------------------- ----------------------
c. City West Columbia, SC West Columbia, SC West Columbia, SC
----------------------- ----------------------- ----------------------
d. Distance from subject N/A 3 miles 6 miles
----------------------- ----------------------- ----------------------
e. Contact Edens Avant, Inc. Edens Avant, Inc. Rex Pollard
----------------------- ----------------------- ----------------------
f. Phone 803-779-4420 803-779-4420 803-779-7777
----------------------- ----------------------- ----------------------
2. Attributes
a. Year built 1974 (Reh. 1990) 1977 1995
----------------------- ----------------------- ----------------------
b. Net sq. Ft. 79,921 54,704 50,000
----------------------- ----------------------- ----------------------
c. # building 1 1 1
----------------------- ----------------------- ----------------------
d. # stories 1 1 1
----------------------- ----------------------- ----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A
----------------------- ----------------------- ----------------------
f. # elevators N/A N/A N/A
----------------------- ----------------------- ----------------------
g. Parking Adequate Adequate Adequate
----------------------- ----------------------- ----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
----------------------- ----------------------- ----------------------
I. Vacancy % 25.09% 13.09% 0%
----------------------- ----------------------- ----------------------
j. Anchors, if Retail
Bi-Lo, Revco Eckerds Piggly Wiggly
----------------------- ----------------------- ----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name Woodberry Plaza Westland Square
---------------------- ----------------------
b. Street
3234 August Road 2250 Sunset Blvd.
---------------------- ----------------------
c. City West Columbia, SC West Columbia, SC
---------------------- ----------------------
d. Distance from subject 4 miles 3 miles
---------------------- ----------------------
e. Contact Edens Avant, Inc. Edens Avant, Inc.
---------------------- ----------------------
f. Phone 803-779-4422 803-779-4420
---------------------- ----------------------
2. Attributes
a. Year built 1976 - Renov. 1994 1987
---------------------- ----------------------
b. Net sq. Ft. 82,920 62,735
---------------------- ----------------------
c. # building 1 1
---------------------- ----------------------
d. # stories 1 1
---------------------- ----------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A
---------------------- ----------------------
f. # elevators N/A N/A
---------------------- ----------------------
g. Parking Adequate Adequate
---------------------- ----------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block
---------------------- ----------------------
I. Vacancy % 0% 96.46%
---------------------- ----------------------
j. Anchors, if Retail Winn-Dixie, Revco,
Big Lots Food Lion/Revco
---------------------- ----------------------
</TABLE>
Comments: Comparables No. 1 and 4 are located on Sunset Boulevard, but are about
3 miles northwest of subject property. Comparable No. 1 does not have a food
store, but the food store is now occupied by Flowers and Things. Comparables No.
2 and 3 are located on Augusta Road and are at the other end of the
neighborhood.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
1. Asking Rental Rate
<S> <C> <C> <C>
a. Anchor Space $3.65 - $4.50 N/A $8.25
----------------------- ----------------------- ----------------------
b. Shop Space $3.50 - $7.50 $6.00 - $8.00 $10.00 - $12.00
----------------------- ----------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net
----------------------- ----------------------- ----------------------
3. Rent Concessions None None None
----------------------- ----------------------- ----------------------
4. Effective Rent $3.50 - $7.50 $6.00 - $8.00 $10.00 - $12.00
----------------------- ----------------------- ----------------------
5. TI Allowance None None None
----------------------- ----------------------- ----------------------
6. Expense Stop None None None
----------------------- ----------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
----------------------- ----------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% - 7.00%
----------------------- ----------------------- ----------------------
9. Percentage Rent Bi-Lo, Revco, Family
(per lease terms) Dollar Store Eckerds Piggly Wiggly
----------------------- ----------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A
----------------------- ----------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A N/A
----------------------- ----------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) N/A inferior superior
----------------------- ----------------------- ----------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
1. Asking Rental Rate
a. Anchor Space $5.81 - $6.50 $6.60 - $6.75
---------------------- ----------------------
b. Shop Space $6.50 - $8.00 $7.00 - $9.50
---------------------- ----------------------
2. Lease Type (Gross/Net) Triple Net Triple Net
---------------------- ----------------------
3. Rent Concessions None None
---------------------- ----------------------
4. Effective Rent $6.50 - $9.25 $7.00 - $9.50
---------------------- ----------------------
5. TI Allowance None None
---------------------- ----------------------
6. Expense Stop None None
---------------------- ----------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop)
---------------------- ----------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00%
---------------------- ----------------------
9. Percentage Rent
(per lease terms) Winn-Dixie, Revco Food Lion, Revco
---------------------- ----------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A
---------------------- ----------------------
11. Annual Operating Expense
psf (Including taxes) N/A N/A
---------------------- ----------------------
C. RANK RELATIVE TO
SUBJECT
(inferior, similar, superior) similar similar
---------------------- ----------------------
</TABLE>
D. EXPLAIN RANKING/COMMENTS:
Comparable No. 1 is considered to be inferior to subject as the Winn-Dixie Store
has moved out of the center and this center does not have a food store.
Comparable No. 2 is considered to be superior as this is a new center and the
rental rates for the shops are higher than subject. Comparables No. 3 and 4 are
considered to be similar to subject.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
================================================================================
[GRAPHIC OMITTED]
Name: Sunset Court
Location: 2247 Sunset Boulevard
West Columbia, SC
Year Built: 1977
Total Size: 54,704 SF
Vacant Space: 7,163 SF
Vacancy Rate: 13.09%
Rental Range $6.00 to $8.00
Tenant Expenses: Triple Net
Remarks:
Eckerds is the anchor tenant. Winn-Dixie moved out approximately 5 years ago.
Other tenants are; Pizza Hut Carry Out, Sunset Video, Yan Ping Restaurant,
Flexpy's Lounge and Uniforms.
5
<PAGE>
Comparable Rental No. 2
================================================================================
[GRAPHIC OMITTED]
Name: Mills Corner Shopping Center
Location: NEC Augusta Road and Oak Drive
West Columbia, South Carolina
Year Built: 1995
Total Size: 42,845 SF
Vacant Space: 1,200 SF
Vacancy Rate: 2.8%
Rental Range: $10.00 to $12.00
Average Rent: $10.35
Tenant Expenses: Pass throughs for real estate taxes, hazard insurance and
CAM
Remarks:
This is a strip center that was completed in 1995. McDonalds and Moovies occupy
outlots. One small space is vacant. A NationsBank kiosk is located on site.
Anchor tenant is Piggly Wiggly, and locals include Subway, Cost Cutters,
Burnette's Cleaners, and ABC store, The Grove Bistro, and Imperial China
Restaurant.
6
<PAGE>
Comparable Rental No. 3
================================================================================
[GRAPHIC OMITTED]
Name: Woodberry Plaza
Location: NEC Augusta Road and Woodberry Drive
West Columbia, South Carolina
Year Built: 1974
Total Size: 85,145 SF
Vacant Space: 0 SF
Vacancy Rate: 0%
Rental Range: $6.50 to 9.25
Average Rent: $7.75
Tenant Expenses: Pass throughs for real estate taxes, hazard insurance and
CAM
Remarks:
This is a strip center with Winn-Dixie and Revco as anchor tenants. A new
Winn-Dixie was recently completed, and the old Winn-Dixie space is currently
leased to Big Lots.
7
<PAGE>
Comparable Rental No. 4
================================================================================
[GRAPHIC OMITTED]
Name: Westland Square
Location: 2250 Sunset Boulevard
West Columbia, South Carolina
Year Built: 1987
Total Size: 62,735 SF
Vacant Space: 2,250 SF
Vacancy Rate: 3.59%
Local Rent Range: $7.00 - $9.50
Tenant Expenses: Triple Net
Remarks:
This center is anchored by Food Lion and Revco. The Food Lion store was expanded
in 1996.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2
------- ------------ ------------
<S> <C> <C> <C>
1. Identification
a. Name Eastage Shopping
Capitol Square St. Andrews Crossing Ctr.
---------------------- ----------------------- ---------------------
b. Street Address NWC Whiskey Rd. &
431 Sunset Blvd. 817 St. Andrews Road Eastgate Dr.
---------------------- ----------------------- ---------------------
c. City West Columbia, SC Columbia, SC Aiken, SC
---------------------- ----------------------- ---------------------
d. Distance from Subject N/A 8 miles 56 miles
---------------------- ----------------------- ---------------------
2. Attributes
a. Year Built 1974 (Reh. 1990) 1994 1995
---------------------- ----------------------- ---------------------
b. Net sq. feet 79,921 66,910 SF 75,716 SF
---------------------- ----------------------- ---------------------
c. # Buildings 1 1 1
---------------------- ----------------------- ---------------------
d. # of Stories 1 1 1
---------------------- ----------------------- ---------------------
e. Vacancy % 25.09% 0% 5.00%
---------------------- ----------------------- ---------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000
---------------------- ----------------------- ---------------------
b. Sales Price PSF N/A $97.89 $88.16
---------------------- ----------------------- ---------------------
c. Cap. Rate N/A 9.69% 9.86%
---------------------- ----------------------- ---------------------
d. Date N/A 05-24-94 09-28-95
---------------------- ----------------------- ---------------------
e. NOI at time of Sale N/A $634,797 $657,896
---------------------- ----------------------- ---------------------
4. Rank Relative to Subject
(inferior, similar, superior) N/A superior similar
---------------------- ----------------------- ---------------------
<CAPTION>
COMPARABLE 3 COMPARABLE 4
------------ ------------
<S> <C> <C>
1. Identification
a. Name One Norman Center Paw Creek Commons
---------------------- ----------------------
b. Street Address 19706 One Norman E/S Little Rock Road
Blvd. at Freedom Drive
---------------------- ----------------------
c. City Cornelius, NC Charlotte, NC
---------------------- ----------------------
d. Distance from Subject 100 miles 92 miles
---------------------- ----------------------
2. Attributes
a. Year Built 1993 1996
---------------------- ----------------------
b. Net sq. feet 54,185 SF 66,050 SF
---------------------- ----------------------
c. # Buildings 1 1
---------------------- ----------------------
d. # of Stories 1 1
---------------------- ----------------------
e. Vacancy % 0% 2.73%
---------------------- ----------------------
3. Sales Information
a. Sales Price $4,650,000 $5,384,000
---------------------- ----------------------
b. Sales Price PSF $85.82 $77.52
---------------------- ----------------------
c. Cap. Rate 9.68% 9.61%
---------------------- ----------------------
d. Date 10-12-95 03-25-97
---------------------- ----------------------
e. NOI at time of Sale $450,188 $517,412
---------------------- ----------------------
4. Rank Relative to Subject
(inferior, similar, superior) similar superior
---------------------- ----------------------
</TABLE>
Explain Ranking/Comments:
Comparables No. 1 and 4 are ranked superior to subject. The reason for this is
because of the location of these comparables being superior to subject.
Comparable No. 3 is located in a commercial area that is larger than subject,
but it is similar. Comparable No. 2 is similar to subject.
9
<PAGE>
Comparable Sale No. 1
================================================================================
[GRAPHIC OMITTED]
TMS: 6012 -1 -1
Name: St. Andrews Crossing
Location: 817 St. Andrews Road, Columbia, SC
Grantor: Hayley-Redd, L.P.
Grantee: F.A.C. Properties
Deed Reference: Book 1199, Page 331
Date: May 25, 1994
Sales Price: $6,550,000
Adjusted Sales Price: $6,550,000
Size building 66,910
Sales Price per S.F.: $97.89
Size Land (Acres): 8.08
Size Land (S.F.): 351,965
Year Built: 1994
Land/Building Ratio: 5.26 to 1
Utilities: All Available
Zoning: Commercial
Financing: At Market
Effective Gross Income: $686,905
EGIM: 9.54
Net Operating Income: $634,797
Overall Rate: 9.69%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is an arms length sale of a neighborhood shopping center anchored by Kroger
in a good commercial area with good accessibility and fair exposure.
Construction is brick veneer/concrete block.
10
<PAGE>
Comparable Sale No. 2
================================================================================
[GRAPHIC OMITTED]
TMS:
Name: Eastgate Shopping Center
Location: Northwest Corner of Whiskey Road & Eastgate Drive
Aiken, SC
Grantor: Southwest U.S. Retail, LP
Grantee: PDG Aiken Partners, LP
Deed Reference: N/A
Date: September 28, 1995
Sales Price: $6,675,000
Adjusted Sales Price: $6,675,000
Size building: 75,716
Sales Price per S.F.: $88.16
Size Land (Acres): 8.79
Size Land (S.F.): 382,892
Year Built: 1995
Land/Building Ratio: 5.06 to 1
Utilities: All Available
Zoning: Commercial
Financing: Cash to Seller
Gross Potential Income: $782,704
Effective Gross Income: $782,704
EGIM: 8.53
Net Operating Income: $657,896
Overall Rate: 9.86%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
Part of a portfolio of Publix anchored shopping centers being purchased in the
Southeast. This center is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7 percent). Most of the local
tenants are on 5 year leases, with rental rates generally ranging from $8.00 to
$13.00 per square foot. This is a neighborhood shopping center with stucco and
brick exterior that was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95 percent.
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
Name: One Norman Center
Location: 19706 One Norman Boulevard
Cornelius, Mecklenburg County, NC
Grantor: One Norman Center, LP
Grantee: Lucky Realty
Deed Reference: Book 8325, Page 721
Date: October 12, 1995
Sales Price: $4,650,000
Adjusted Sales Price: $4,650,000
Size building: 54,185
Sales Price per S.F.: $85.82
Size Land (Acres): 5.69
Size Land (S.F.): 247,856
Year Built: 1993
Land/Building Ratio: 4.57 to 1
Utilities: All Public
Zoning: CUB-2
Financing: Cash to Seller
Gross Potential Income: $474,591 - $8.76/SF
Effective Gross Income: $474,591 - $8.76/SF
Gross Income Multiple: 9.80
EGIM: 9.80
Net Operating Income: $450,188 - $8.31/SF
Overall Rate: 9.68%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a neighborhood center with Bi-Lo as the major tenant (42,680 SF). Locals
include Blockbuster Video, El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot; local shops range from
$10.50 to $13.00 per square foot on a triple net basis.
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS: 59-231-22,23 pt.
Name: Paw Creek Commons
Location: East side of Little Rock Road at Freedom Drive
Grantor: Paw Creek, LLC
Grantee: Paw Creek Crossing Limited Partnership
Deed Reference: Book 8988, Page 519
Date: March 25, 1997
Sales Price: $5,120,000
Adjusted Sales Price: $5,384,000
Size building: 66,050
Sales Price per S.F.: $77.52
Size Land (Acres): 9.82
Size Land (S.F.): 427,759
Year Built: 1996
Land/Building Ratio: 6.48 to 1
Utilities: Municipal
Zoning: CC, Commercial Center
Financing: Cash to Seller
Gross Potential Income: $568,840
Effective Gross Income: $552,054
Gross Income Multiple: 9.00
EGIM: 9.27
Net Operating Income: $517,412
Overall Rate: 9.61%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
The contract for subject was pre-construction. The sales price has been adjusted
to reflect this by using 50 basis points in the capitalization rate (.1011 minus
.0050 equals .0961). The major tenants are Winn-Dixie and Revco. Blockbuster
occupies a store containing 5,500 square feet at $11.20 per square foot. Rents
on shops range from $13.00 to $14.00 per square foot. The income from anchor
tenants is 79.41 percent gross income.
13
<PAGE>
ADDENDA
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
14
<PAGE>
Comparable Rentals
------------------
[GRAPHIC OMITTED]
<PAGE>
Improved Sales Map
------------------
[GRAPHIC OMITTED]
<PAGE>
Site Plan
---------
[GRAPHIC OMITTED]
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97
Property: CAPITOL SQUARE
431 SUNSET BOULEVARD
WEST COLUMBIA, SC 29169
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLOTH WORLD #1126
FCA OF OHIO, INC. 626-10 12,000 04/01/95 03/31/00 3.50 04/01/92 42,000.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
Available
626-20 2,900 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
CAROLINA DRYCLEANERS
THRESIAMMA J. KAROTTUKUNNEL& 626-30 2,046 02/01/96 01/31/01 7.67 02/01/96 15,692.88
9.00 02/01/99 18,414.00
- ------------------------------------------------------------------------------------------------------------------------
Available
626-40 1,650 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
COLUMBIA METRO TREATMENT
COLUMBIA METRO TREATMENT CENT 626-50 2,800 10/01/92 09/30/02 0.00 0.00
0.00 0.00
5.35 12/01/92 14,979.96
5.55 10/01/97 15,540.00
5.85 10/01/99 16,380.00
6.00 10/01/01 16,800.00
- ------------------------------------------------------------------------------------------------------------------------
COIN LAUNDRY
COIN LAUNDRY 626-60 2,000 03/01/96 02/28/01 0.00 0.00
6.25 03/01/91 12,499.92
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLOTH WORLD #1126
FCA OF OHIO, INC. PRS 1975 PRS 1975 Full 0 04/01/90 03/31/92 3.50 3.00 1,400,000 Y
04/01/92 03/31/95 3.50 3.00 0 Y
04/01/00 03/31/05 4.02 3.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
CAROLINA DRYCLEANERS
THRESIAMMA J. KAROTTUKUNNEL& Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
COLUMBIA METRO TREATMENT
COLUMBIA METRO TREATMENT CENT Full 0 Full 0 Full 0 10/01/97 09/30/02 0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
COIN LAUNDRY
COIN LAUNDRY Full 0 Full 0 Full 0 03/01/01 02/28/06 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97
Property: CAPITOL SQUARE
431 SUNSET BOULEVARD
WEST COLUMBIA, SC 29169
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COIN LAUNDRY
COIN LAUNDRY 626-60 2,000 03/01/96 02/28/01 6.75 03/01/94 13,500.00
7.25 03/01/96 14,499.96
- ------------------------------------------------------------------------------------------------------------------------
J.D.'S FASHIONS #6
WILLIE HARRIS & CHA Y HARRIS 626-80 2,800 01/01/97 12/31/99 0.00 0.00
0.00 0.00
6.00 01/01/94 16,800.00
6.50 01/01/98 18,204.00
7.00 01/01/98 19,596.00
- ------------------------------------------------------------------------------------------------------------------------
Available
626-90 4,000 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
JIN JIN CHINESE RESTAURANT
TONG LIN 626-100 2,000 04/01/95 03/31/98 7.50 04/01/95 15,000.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORE #2735
FAMILY DOLLAR STORES OF W. CO 626-110 6,625 08/04/95 12/31/01 4.35 08/04/95 28,799.40
0.00 0.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. #071
BI-LO, INC. 626-130 22,500 12/20/90 12/31/10 3.65 01/01/91 82,125.00
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COIN LAUNDRY
COIN LAUNDRY Full 0 Full 0 Full 0 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
J.D.'S FASHIONS #6
WILLIE HARRIS & CHA Y HARRIS Full 0 Full 0 Full 0 01/01/97 12/31/99 0.00 6.00 280,000
0.00 0.06 280,000
0.00 0.06 303,400
0.00 0.06 0
0.00 0.06 0
- ------------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
JIN JIN CHINESE RESTAURANT
TONG LIN Full 0 Full 0 Full 0 04/01/98 03/31/01 8.25 0.00 0
04/01/01 03/31/05 9.00 0.00 0
0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
FAMILY DOLLAR STORE #2735
FAMILY DOLLAR STORES OF W. CO PRS 1996 None 0 None 0 01/01/02 12/31/06 5.45 3.00 960,000 Y
01/01/07 12/31/11 5.83 3.00 0 Y
01/01/12 12/31/16 6.21 3.00 0 Y
01/01/17 12/31/21 6.58 3.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. #071
BI-LO, INC. Full 0 Full 0 Full 0 01/01/11 12/31/15 3.90 1.00 8,212,500 Y
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97
Property: CAPITOL SQUARE
431 SUNSET BOULEVARD
WEST COLUMBIA, SC 29169
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. #071
BI-LO, INC. 626-130 22,500 12/20/90 12/31/10 0.00 0.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
REVCO #0573
REVCO DISCOUNT DRUG CENTERS, 626-140 7,100 02/01/91 01/31/01 4.50 02/01/91 31,950.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
Available
626-150 11,500 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
COLUMBIA FARMS
COLUMBIA FARMS 626-160 0 P 11/01/87 10/31/98 0.00 0.00
0.00 11/01/92 20,160.00
0.00 0.00
0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
SAVANNAH'S
DIANE F. SMITH 626-170 0 P 05/01/94 04/30/97 0.00 11/01/92 22,800.00
0.00 0.00
0.00 05/01/94 25,080.00
- ------------------------------------------------------------------------------------------------------------------------
Square Feet: Occupied.. 59,871 Current Annual Base Rent 307,087.20
Available. 20,050
Total..... 79,921
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION REIMBURSEMENTS RENEWAL OPTIONS PERCENT RENT
Tax Base Ins Base CAM Base per Pcnt of Amount Nat
Tenant Name Recov Year Recov Year Recov Year Begin End SF/YR Typ Over Brk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
BI-LO, INC. #071
BI-LO, INC. Full 0 Full 0 Full 0 01/01/16 12/31/20 4.15 1.00 0 Y
01/01/21 12/31/25 4.40 1.00 0 Y
01/01/26 12/31/30 4.65 1.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
REVCO #0573
REVCO DISCOUNT DRUG CENTERS, PRS 1974 PRS 1979 Full 0 02/01/01 01/31/06 5.00 2.00 1,597,500 Y
02/01/06 01/31/11 5.50 2.00 0 Y
- ------------------------------------------------------------------------------------------------------------------------------------
Available
0 0 0 0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
COLUMBIA FARMS
COLUMBIA FARMS Full 0 Full 0 Full 0 11/01/92 10/31/95 12.12 0.00 0
11/01/95 10/31/98 12.12 0.00 0
11/01/98 10/31/01 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
SAVANNAH'S
DIANE F. SMITH Full 0 None 0 None 0 05/01/97 04/30/00 0.00 0.00 0
05/01/00 04/30/03 0.00 0.00 0
0.00 0.00 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PHOTOGRAPHS OF SUBJECT PROPERTY
[GRAPHIC OMITTED]
Sunset Boulevard - Looking East
[GRAPHIC OMITTED]
Sunset Boulevard - Looking West
<PAGE>
[GRAPHIC OMITTED]
Meeting Street - Looking South
[GRAPHIC OMITTED]
Meeting Street - Looking North
<PAGE>
[GRAPHIC OMITTED]
Subject - Front View
[GRAPHIC OMITTED]
Subject - Front View
<PAGE>
[GRAPHIC OMITTED]
Subject - Front View
[GRAPHIC OMITTED]
Subject - Front View
<PAGE>
[GRAPHIC OMITTED]
Subject - Rear View - Leaphart Street
[GRAPHIC OMITTED]
Subject - Savannahs's
<PAGE>
This CD ROM contains an electronic version of appraisals for the Mortgaged
Properties in PDF format. The appraisals for the Mortgaged Properties were
prepared prior to the date of this Prospectus Supplement. Accordingly, the
information included in such appraisals may not reflect the current economic,
competitive, market and other conditions with respect to the Mortgaged
Properties. The information contained in this CD ROM does not appear elsewhere
in paper form in this Prospectus Supplement and must be considered together
with the information contained elsewhere in this Prospectus Supplement and the
Prospectus. The information contained in this CD ROM has been filed by the
Seller with the Securities and Exchange Commission as part of a Current Report
on Form 8-K, which is incorporated by reference in this Prospectus Supplement,
and is also available through the public reference branch of the Securities and
Exchange Commission. Defined terms used in this CD ROM but not otherwise
defined therein shall have the respective meanings assigned to them in the
paper portion of the Prospectus Supplement and the Prospectus. All of the
information contained in this CD ROM is subject to the same limitations and
qualifications contained in this Prospectus Supplement and the Prospectus.
Prospective investors are strongly urged to read the paper portion of this
Prospectus Supplement and the Prospectus in its entirety prior to accessing
this CD ROM. If this CD ROM was not received in a sealed package, there can be
no assurances that it remains in its original format and should not be relied
upon for any purpose. Prospective investors may contact Cecilia Tarrant of
Morgan Stanley & Co. Incorporated at (212) 761-6028 to receive an original copy
of the CD ROM.
<PAGE>
[LOGO]
Market Study
CLUSTERS OF WHITEHALL
300 St. Andrews Road
Columbia, Lexington County, South Carolina
Prepared by
O. Marshall Dodds, MAI
Date of Market Study - April 29, 1997
<PAGE>
[Letterhead of O. Marshall Dodds Co., Inc.]
April 29, 1997
Mr. Steven R. Maeglin
Vice President
Morgan & Stanley Co., Inc.
1585 Broadway
New York, New York 10036
Re: Market Study
Clusters of Whitehall
300 St. Andrews Road
Columbia, Lexington County, South Carolina
Dear Mr. Maeglin:
At your request, we have completed a market study of the above referenced
property. This analysis that forms the basis of the study was conducted by O.
Marshall Dodds, MAI. The subject property and all comparable data was inspected
by O. Marshall Dodds, MAI on April 29, 1997.
The study states our opinion of the subject property's market positioning
relative to current, as well as anticipated competition, rent and occupancy
levels, as well as supporting demographic information relating to age and
housing characteristics. This market analysis provides a basis for our opinions
which are subject to the various assumptions and limiting conditions set forth
in the report.
The market study is intended to be a general analysis of the retail market and
is not intended to state opinions on the value of the subject property. The
property consists of a neighborhood shopping center that contains 68,029 square
feet of leasable area. The center was constructed in 1973 originally and the
major tenants were Winn-Dixie, Revco, and Dodd `s Variety Stores. In 1988, the
center was renovated after Winn-Dixie and Dodd's Variety Store vacated the
premises. The center was renovated with the major tenants being Fresh Market and
Revco, which had expanded into the larger variety store. Since then, Fresh
Market has vacated the premises and Revco is the anchor tenant. The shopping
center is currently 90.26% occupied as Fresh Market is continuing to pay the
rental on the store. The size of the Fresh Market Store was 18,000 square feet.
If this space is included with the other vacant space, the center is 63.80%
occupied.
For our market study, we relied on sources specified in the study, as well as
site information and tenant rent rolls submitted by the subject owner. We have
retained back-up information for review, if necessary. This study can be
supplemented by a complete self-contained appraisal report.
Respectfully submitted,
O. MARSHALL DODDS COMPANY, INC.
/s/ O. Marshall Dodds
-------------------------------------
O. Marshall Dodds, MAI
State Certified General
Real Estate Appraiser (CG-356)
<PAGE>
EXECUTIVE SUMMARY
================================================================================
Regional Perspective
Columbia is the state capital with the State House being located in downtown
Columbia. Also, the University of South Carolina Campus is located in the
downtown area. Fort Jackson, which is a large U.S. Army Training Facility is
located in the eastern section of the Metropolitan area. The city has numerous
specialized office activities such as: insurance, consulting services,
advertising, marketing, printing and financial services. Government,
distribution, finance and transportation are all important to Columbia, although
none are preeminent. Geography also gives Columbia a strategic location in the
industrial and commercial spheres.
The subject property is located in Lexington County and the unemployment rate
was 2.9% in February, 1997.
Neighborhood and Site
The subject neighborhood is located in the Whitehall section of the St. Andrews
area. Development of the Whitehall section began in approximately in 1965 and
has been a desirable area for single family dwellings. There are several
multi-family properties that are located throughout the neighborhood such as the
Clusters, which is a condominium project and the Polo Run Apartments. The price
range of the houses in Whitehall section generally range from $85,000 to
$200,000. The Allied Chemical Plant is located on St. Andrews Road in the
neighborhood.
Physical features are as follows:
1. Size 6.56 acres or 285,754 square feet
2. Identity 300 St. Andrews Road
(between Bush River Road and St. Andrews
Road)
TMS #3636-01-001
3. Shape irregular
4. Topography generally level, but slopes downward
from St. Andrews Road toward Bush River
Road
5. Accessability good
6. Utilities municipal
Physical Description
Building features are as follows:
1. Size (net) 68,029 square feet
2. Layout & Design 1 story-food store, drug store, 21 shops
3. Parking Spaces 311
3.57 spaces per 1,000 square feet of net
area
4. Construction brick and glass front with concrete
block on side and rear and metal seamed
roof
1
<PAGE>
Market Position and Marketability Conclusions
The St. Andrews area is the second largest retail submarket in the Columbia MSA
with 25 of the 158 completed retail structures surveyed. Dutch Square Mall, one
of the regional malls in the MSA, measures 620,000 square feet and is located in
this submarket. This area contains 17.3% or 2,282,887 square feet of the retail
space surveyed, an increase of 1.8% in gross leasable space since the 1995
survey. Broad River Center added 48,650 square feet to this submarket. Four
centers had a change in size and subtracted 1,823 square feet from this area and
one center, 5,500 square feet, was deleted. The average rental rate on a new
lease for the St. Andrews area is $8.50 per square foot. No new properties are
under construction or planned for this submarket.
The subject property is located in the middle section of the neighborhood being
around the intersection of St. Andrews Road and Bush River Road. The location of
subject is convenient to the single family dwellings that are located throughout
the neighborhood and several of the multi-family projects.
The St. Andrews Crossing is located at St. Andrews Road and I-26 with Kroger
Store being the major tenant as rental rates for the shops ranging from $10.00
to $12.00 per square foot. The St. Andrews Square located at St. Andrews Road
and Jamil Road has Piggly Wiggly and Eckerds as the major tenant. The shops have
rental rates that range from $9.00 to $12.00 per square foot. Richardson Plaza
which is located on St. Andrews Road between Ashland Road and Cindy Road has
Food Lion and Rite-Aid as major tenants, but Rite-Aid has vacated the premises
even though they are continuing to pay rent. The rental rates for the shops
range from $8.00 to $12.00 per square foot. Comparable No. 4 is the Widewater
Square and is located around the intersection of St. Andrews Road and Broad
River Road. The major tenants are Bi-Lo and Revco with the rental rates ranging
from $5.00 to $11.00 per square foot.
The subject property has 21 shops. The rental rates from $6.50 to $10.00 per
square foot. These rates are reasonable rental rates for the neighborhood.
The rental rate for the Revco Store is at $6.50 per square foot and this tenant
is paying overage rentals. The rental rate for the Fresh Market Store is at
$6.50 per square foot.
The subject property has operated at a high occupancy rate excluding the vacant
Fresh Market Store. The location of subject is strategic within the neighborhood
and convenient to shoppers throughout the neighborhood.
Trends:
The subject property is located in the St. Andrews section of the metropolitan
area of Columbia. The development of the Whitehall area began approximately 30
years ago and the neighborhood has had high demand and desirability. There are
commercial developments that are located throughout the neighborhood on the
major traffic arteries. Allied Chemical has a large plant located on St. Andrews
Road.
All trends are favorable at this time and expected to continue.
2
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
I. COMPARABLE PROPERTIES
A PROPERTY DESCRIPTION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Clusters of Whitehall St. Andrews Crossing St. Andrews Square Richardson Plaza
---------------------- ---------------------- ----------------------- --------------------
b. Street 252 St. Andrews Rd. 817 St. Andrews Road 1978 St. Andrews Rd. 570 St. Andrews Rd.
---------------------- ---------------------- ----------------------- --------------------
c. City Columbia, SC Columbia, SC Columbia, SC Columbia, SC
---------------------- ---------------------- ----------------------- --------------------
d. Distance from subject N/A 1/2 mile 3/4 mile 1 mile
---------------------- ---------------------- ----------------------- --------------------
e. Contact EastCoast
Edens Avant, Inc. Keenen Co. The Oglum Co. Development
---------------------- ---------------------- ----------------------- --------------------
f. Phone 803-779-4420 803-254-2300 803-779-7777 803-749-0079
---------------------- ---------------------- ----------------------- --------------------
2. Attributes
a. Year built 1973 (Reh. 1988) 1994 1978 1981
---------------------- ---------------------- ----------------------- --------------------
b. Net sq. Ft. 68,029 66,910 60,000 108, 838
---------------------- ---------------------- ----------------------- --------------------
c. # building 2 2 2 1
---------------------- ---------------------- ----------------------- --------------------
d. # stories 1 1 1 1
---------------------- ---------------------- ----------------------- --------------------
e. Avg. Floor plate size
(sq. Ft.), if office N/A N/A N/A N/A
---------------------- ---------------------- ----------------------- --------------------
f. # elevators N/A N/A N/A N/A
---------------------- ---------------------- ----------------------- --------------------
g. Parking Adequate Adequate Adequate Adequate
---------------------- ---------------------- ----------------------- --------------------
h. Construction Type Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block Brick/Concrete Block
---------------------- ---------------------- ----------------------- --------------------
I. Vacancy % 9.74% 6.13% 0% 13.05%
---------------------- ---------------------- ----------------------- --------------------
j. Anchors, if Retail Revco Kroger Piggly Wiggly, Eckerds Food Lion
---------------------- ---------------------- ----------------------- --------------------
---------------------- ---------------------- ----------------------- --------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Widewater Square
---------------------
b. Street 3315 Broad River Rd.
---------------------
c. City Columbia, SC
---------------------
d. Distance from subject 2 miles
---------------------
e. Contact
Edens Avant, Inc.
---------------------
f. Phone 803-779-4420
---------------------
2. Attributes
a. Year built 1976
---------------------
b. Net sq. Ft. 95,700
---------------------
c. # building 3
---------------------
d. # stories 1
---------------------
e. Avg. Floor plate size N/A
(sq. Ft.), if office
---------------------
f. # elevators N/A
---------------------
g. Parking Adequate
---------------------
h. Construction Type Brick/Concrete Block
---------------------
I. Vacancy % 4.70%
---------------------
j. Anchors, if Retail Bi-Lo, Revco
---------------------
---------------------
Comments:
These comparable are located in subject neighborhood and are similar to subject.
However, the Food Store in these comparable centers is considered to be a
national tenant, whereas, the Fresh Market is considered to be a regional or
local tenant. While the Fresh Market has vacated the premises, the rent is
continuing to be paid. The small shops in subject property are similar to the
small shops in each of these shopping centers. The Revco Store in subject is
paying overage rentals at this time.
3
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
B. RENTAL INFORMATION
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Asking Rental Rate
a. Anchor Space $6.50 N/A N/A N/A
--------------------- --------------------- ---------------------- ---------------------
b. Shop Space $4.44 - $9.50 $10.00 - $12.00 $9.00 - $12.00 $8.00 - $12.00
--------------------- --------------------- ---------------------- ---------------------
2. Lease Type (Gross/Net) Triple Net Triple Net Triple Net Triple Net
--------------------- --------------------- ---------------------- ---------------------
3. Rent Concessions None None None None
--------------------- --------------------- ---------------------- ---------------------
4. Effective Rent $4.44 - $9.50 $10.00 - $12.00 $9.00 - $12.00 $8.00 - $12.00
--------------------- --------------------- ---------------------- ---------------------
5. TI Allowance None None None None
--------------------- --------------------- ---------------------- ---------------------
6. Expense Stop None None None None
--------------------- --------------------- ---------------------- ---------------------
7. Length of Lease Term 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop) 3 - 5 years (shop)
--------------------- --------------------- ---------------------- ---------------------
8. Commissions 5.00% to 7.00% 5.00% to 7.00% 5.00% - 7.00% 5.00% to 7.00%
--------------------- --------------------- ---------------------- ---------------------
9. Percentage Rent
(per lease terms) Revco Kroger Piggly Wiggly, Eckerds Food Lion
--------------------- --------------------- ---------------------- ---------------------
10. Historical Annual
Absorption/sq.ft. N/A N/A N/A N/A
--------------------- --------------------- ---------------------- ---------------------
11. Annual Operating
Expense psf (Including
taxes) N/A N/A N/A N/A
--------------------- --------------------- ---------------------- ---------------------
C. RANK RELATIVE TO
SUBJECT
(inferior,
similar, superior) N/A superior similar similar
--------------------- --------------------- ---------------------- ---------------------
</TABLE>
COMPARABLE 4
------------
1. Asking Rental Rate
a. Anchor Space N/A
--------------------
b. Shop Space $5.00 - $11.00
--------------------
2. Lease Type (Gross/Net) Triple Net
--------------------
3. Rent Concessions None
--------------------
4. Effective Rent $5.00 - $11.00
--------------------
5. TI Allowance None
--------------------
6. Expense Stop None
--------------------
7. Length of Lease Term 3 - 5 years (shop)
--------------------
8. Commissions 5.00% to 7.00%
--------------------
9. Percentage Rent
(per lease terms) Bi-Lo, Revco
--------------------
10. Historical Annual
Absorption/sq.ft. N/A
--------------------
11. Annual Operating
Expense psf (Including
taxes) N/A
--------------------
C. RANK RELATIVE TO
SUBJECT
(inferior,
similar, superior) similar
--------------------
D. EXPLAIN RANKING/COMMENTS:
Comparable No. 1 has been ranked as superior to subject. The reason for this is
because this center is a newer center and is located at the intersection of St.
Andrews Road and I-26. The major tenant is Kroger Stores and rental rates being
received from the shops are higher than the rental rates being received from the
shops in subject. The other comparables are ranked as similar and these centers
are similar to subject. The rental rates for the shops in subject are within the
range of rental rates in these centers.
4
<PAGE>
LOCAL RENTAL COMPARABLES
Comparable Rental No. 1
[GRAPHIC OMITTED]
Name: St. Andrews Crossing
Location: 817 St. Andrews Road
Columbia, SC
Year Built: 1994
Total Size: 66,910 SF
Vacant Space: 4,100 SF
Vacancy Rate: 6.13%
Rental Range: $10.00 to $12.00
Tenant Expenses: Triple Net
Remarks:
Kroger is major tenant. Located on St. Andrews Road at I-26. Has operated at a
high occupancy level.
5
<PAGE>
Comparable Rental No. 2
[GRAPHIC OMITTED]
Name: St. Andrews Square
Location: 1978 St. Andrews Road
Columbia, South Carolina
Year Built: 1978
Total Size: 60,000 SF
Vacant Space: 0 SF
Vacancy Rate: 0%
Rental Range: $9.00 to $12.00
Tenant Expenses: Triple Net
Remarks:
Major tenants are Piggly Wiggly and Eckerds. Located on St. Andrews and Jamil
Road. Has operated at a high occupancy level.
6
<PAGE>
Comparable Rental No. 3
[GRAPHIC OMITTED]
Name: Richardson Plaza
Location: 570 St. Andrews Road
Columbia, South Carolina
Year Built: 1981
Total Size: 108,838 SF
Vacant Space: 14,200 SF
Vacancy Rate: 13.05%
Rental Range: $13.05
Tenant Expenses: Triple Net
Remarks:
The Food Lion Store expanded in 1995. Rite-Aid has vacated their store, but pays
rent. Several other tenants have moved out, but were replaced.
7
<PAGE>
Comparable Rental No. 4
[GRAPHIC OMITTED]
Name: Widewater Square
Location: 3315 Broad River Road
Columbia, South Carolina
Year Built: 1976
Total Size: 95,700 SF
Vacant Space: 4,500 SF
Vacancy Rate: 4.70%
Local Rent Range: $5.00 - $11.00
Tenant Expenses: Triple Net
Remarks:
This center has been renovated with new front, parking lot was re-sealed and
stripped. Occupancy rate has been high. Major tenants are Bi-Lo and Revco.
8
<PAGE>
PROPERTY INSPECTION FORM
COMMERCIAL
II. SALES COMPARABLE
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3
------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1. Identification
a. Name Clusters of Whitehall St. Andrews Crossing Eastgate Shopping Center One Norman Center
---------------------- -------------------- ------------------------ ----------------------
b. Street Address NWC Whiskey Rd. & 19706 One Norman Blvd.
252 St. Andrews Road 817 St. Andrews Road Eastgate Dr.
---------------------- -------------------- ------------------------ ----------------------
c. City Columbia, SC Columbia, SC Aiken, SC Cornelius, NC
---------------------- -------------------- ------------------------ ----------------------
d. Distance from Subject N/A 1/2 miles 56 miles 100 miles
---------------------- -------------------- ------------------------ ----------------------
2. Attributes
a. Year Built 1973 (Reh. 1988) 1994 1995 1993
---------------------- -------------------- ------------------------ ----------------------
b. Net sq. feet 68,029 66,910 SF 75,716 SF 54,185 SF
---------------------- -------------------- ------------------------ ----------------------
c. # Buildings 2 1 1 1
---------------------- -------------------- ------------------------ ----------------------
d. # of Stories 1 1 1 1
---------------------- -------------------- ------------------------ ----------------------
e. Vacancy % 9.74% 0% 7.21% 6.98%
---------------------- -------------------- ------------------------ ----------------------
3. Sales Information
a. Sales Price N/A $6,550,000 $6,675,000 $4,650,000
---------------------- -------------------- ------------------------ ----------------------
b. Sales Price PSF N/A $97.89 $88.16 $85.82
---------------------- -------------------- ------------------------ ----------------------
c. Cap. Rate N/A 9.69% 9.86% 9.68%
---------------------- -------------------- ------------------------ ----------------------
d. Date N/A 05-25-94 09-28-95 10-12-95
---------------------- -------------------- ------------------------ ----------------------
e. NOI at time of Sale N/A $634,797 $782,704 $474,591
---------------------- -------------------- ------------------------ ----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) N/A superior similar similar
---------------------- -------------------- ------------------------ ----------------------
</TABLE>
COMPARABLE 4
------------
1. Identification
a. Name Paw Creek Commons
----------------------
b. Street Address E/S Little Rock Road
at Freedom Drive
----------------------
c. City Charlotte, NC
----------------------
d. Distance from Subject 92 miles
----------------------
2. Attributes
a. Year Built 1996
----------------------
b. Net sq. feet 66,050 SF
----------------------
c. # Buildings 1
----------------------
d. # of Stories 1
----------------------
e. Vacancy % 2.73%
----------------------
3. Sales Information
a. Sales Price $5,120,000
----------------------
b. Sales Price PSF $77.52
----------------------
c. Cap. Rate 9.60%
----------------------
d. Date 03-25-97
----------------------
e. NOI at time of Sale
----------------------
4. Rank Relative to Subject
(inferior, similar,
superior) superior
----------------------
Explain Ranking/Comments:
Comparables No. 1 and 4 are ranked superior to subject. The reason for this is
because of the location of these comparables being superior to subject.
Comparable No. 3 is located in a commercial area that is larger than subject,
but it is similar. Comparable No. 2 is similar to subject.
9
<PAGE>
Comparable Sale No. 1
[GRAPHIC OMITTED]
TMS: 6012 -1 -1
Name: St. Andrews Crossing
Location: 817 St. Andrews Road, Columbia, SC
Grantor: Hayley-Redd, L.P.
Grantee: F.A.C. Properties
Deed Reference: Book 1199, Page 331
Date: May 25, 1994
Sales Price: $6,550,000
Adjusted Sales Price: $6,550,000
Size building 66,910
Sales Price per S.F.: $97.89
Size Land (Acres): 8.08
Size Land (S.F.): 351,965
Year Built: 1994
Land/Building Ratio: 5.26 to 1
Utilities: All Available
Zoning: Commercial
Financing: At Market
Effective Gross Income: $686,905
EGIM: 9.54
Net Operating Income: $634,797
Overall Rate: 9.69%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is an arms length sale of a neighborhood shopping center anchored by Kroger
in a good commercial area with good accessibility and fair exposure.
Construction is brick veneer/concrete block.
10
<PAGE>
Comparable Sale No. 2
[GRAPHIC OMITTED]
TMS:
Name: Eastgate Shopping Center
Location: Northwest Corner of Whiskey Road & Eastgate Drive
Aiken, SC
Grantor: Southwest U.S. Retail, LP
Grantee: PDG Aiken Partners, LP
Deed Reference: N/A
Date: September 28, 1995
Sales Price: $6,675,000
Adjusted Sales Price: $6,675,000
Size building: 75,716
Sales Price per S.F.: $88.16
Size Land (Acres): 8.79
Size Land (S.F.): 382,892
Year Built: 1995
Land/Building Ratio: 5.06 to 1
Utilities: All Available
Zoning: Commercial
Financing: Cash to Seller
Gross Potential Income: $782,704
Effective Gross Income: $782,704
EGIM: 8.53
Net Operating Income: $657,896
Overall Rate: 9.86%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
Part of a portfolio of Publix anchored shopping centers being purchased in the
Southeast. This center is located adjacent to the Aiken Mall. Publix is the
major tenant occupying 57,348 square feet (75.7 percent). Most of the local
tenants are on 5 year leases, with rental rates generally ranging from $8.00 to
$13.00 per square foot. This is a neighborhood shopping center with stucco and
brick exterior that was constructed in early 1995. Parking is considered
adequate. The occupancy at the time of sale was 95 percent.
11
<PAGE>
Comparable Sale No. 3
================================================================================
[GRAPHIC OMITTED]
Name: One Norman Center
Location: 19706 One Norman Boulevard
Cornelius, Mecklenburg County, NC
Grantor: One Norman Center, LP
Grantee: Lucky Realty
Deed Reference: Book 8325, Page 721
Date: October 12, 1995
Sales Price: $4,650,000
Adjusted Sales Price: $4,650,000
Size building: 54,185
Sales Price per S.F.: $85.82
Size Land (Acres): 5.69
Size Land (S.F.): 247,856
Year Built: 1993
Land/Building Ratio: 4.57 to 1
Utilities: All Public
Zoning: CUB-2
Financing: Cash to Seller
Gross Potential Income: $474,591 - $8.76/SF
Effective Gross Income: $474,591 - $8.76/SF
Gross Income Multiple: 9.80
EGIM: 9.80
Net Operating Income: $450,188 - $8.31/SF
Overall Rate: 9.68%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
This is a neighborhood center with Bi-Lo as the major tenant (42,680 SF). Locals
include Blockbuster Video, El Cancun Restaurant, Papa John's Pizza, Baskin
Robbins. The rent for Bi-Lo is $8.25 per square foot; local shops range from
$10.50 to $13.00 per square foot on a triple net basis.
12
<PAGE>
Comparable Sale No. 4
================================================================================
[GRAPHIC OMITTED]
TMS: 59-231-22,23 pt.
Name: Paw Creek Commons
Location: East side of Little Rock Road at Freedom Drive
Grantor: Paw Creek, LLC
Grantee: Paw Creek Crossing Limited Partnership
Deed Reference: N/A
Date: March 25, 1997
Sales Price: $5,120,000
Adjusted Sales Price: $5,384,000
Size building: 66,050
Sales Price per S.F.: $77.52
Size Land (Acres): 9.82
Size Land (S.F.): 427,759
Year Built: 1996
Land/Building Ratio: 6.48 to 1
Utilities: Municipal
Zoning: CC, Commercial Center
Financing: Cash to Seller
Gross Potential Income: $568,840
Effective Gross Income: $552,054
Gross Income Multiple: 9.00
EGIM: 9.27
Net Operating Income: $517,412
Overall Rate: 9.61%
Verification: Public Records
Type of Purchaser: Private Investor
Comments:
The contract for subject was pre-construction. The sales price has been adjusted
to reflect this by using 50 basis points in the capitalization rate (.1011 minus
.0050 equals .0961). The major tenants are Winn-Dixie and Revco. Blockbuster
occupies a store containing 5,500 square feet at $11.20 per square foot. Rents
on shops range from $13.00 to $14.00 per square foot. The income from anchor
tenants is 79.41 percent of gross income.
13
<PAGE>
ADDENDA
o Comparables Rental Map
o Comparables Sales Map
o Building Layout
o Rent Roll
o Photographs of Subject
<PAGE>
[GRAPHIC OMITTED]
Comparable Rentals
<PAGE>
[GRAPHIC OMITTED]
Improved Sales Map
<PAGE>
[GRAPHIC OMITTED]
Site Plan
<PAGE>
EDENS & AVANT, INC.
Retail Custom Rent Roll
Date: 04/08/97
Property: CLUSTERS OF WHITEHALL
300 ST. ANDREWS ROAD
COLUMBIA, SC 29210-0000
Column Legends:
Tenant/Property MISC column: K - Kiosk / P - Perimeter Tenant Renewal
Options TYP Column: TBD - To be Determined CPI - Consumer Price Index
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
TENANT AND PROPERTY INFORMATION LEASE TERM RENT INFORMATION
per Annual
Tenant Name Unit # Sq Feet Misc From To MTM SF/YR Begin Base Rent
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> 
